Iraqi oil and banks belong to the Iraqis - Through the looking glass

Now that the violence in Iraq has peaked to such politically embarrassing levels, the Bush administration now deciding to accelerate the transfer of power to Iraq's people. L. Paul Bremer III, the top U.S. civil administrator in Iraq, recently returned to Washington to hold policy discussions with Bush and his cabinet about taking immediate steps to create a full-fledged Iraqi government.

The death toll of 150 soldiers and the pressures of an election year rumbling around the corner has now led the U.S. to focus on training the Iraqi security forces so it can bring home "the boys."

The U.S. defends its withdrawal in both cases, by saying Iraqis will get their democracy sooner rather than later, while taking responsibility for their security will educate them in the norms and choices of a democratic people.

Examining U.S. economic policy towards Iraq, however, suggests that this is a pull back, not a power transfer. The U.S. might set up a government based on a system of elections and leave an effective security force, but these policies will hardly transform the Third World country into a Middle Eastern model for a modern, economically vibrant nation.

Even if we give the Iraqis a "democratic" Iraq, will they really own their country?

Bremer's recent Order 39 mandates that 200 Iraqi state companies be privatized, and made available for sale to foreign corporations. Many of these state companies control valuable natural resources, like oil and minerals. Foreign companies will get free license to open businesses in Iraq, or buy up existing businesses, mines and factories. Foreign companies can repatriate profits, meaning they can make the big bucks and not be constrained to invest any of it in Iraq's own economy. Six foreign banks will be given "fast-track" entry into the country, and will be permitted full ownership of the local banks within 5 years.

Yard sale, anyone?

Let's run a list of what Iraqis won't own. Iraqis won't have an iota of executive control over their nation's banks, businesses, factories, mines and natural resources. U.S. policy to turn the market into a free zone of competition will starve local Iraqi businesses, which stand no chance against the multinational juggernauts. The 50 percent unemployment rate will swell as more Iraqis join the reserve labor force desperate for even the low paying service jobs provided by the corporations. The mega-corporations obviously won't want to waste resources in training the "natives" when they can bring in their own specialists.

As national assets get auctioned off into corporation shares, and more Iraqis find themselves jobless or are reduced to cleaning out the sewage from sleek, corporate offices, I doubt that the people will gloat over how free they've become or how grateful they are to the Americans for getting the right to vote.

Neoliberalism?is an economic policy which advocates getting rid of state protectionism and integrating the local market with the world market, ensuring free transfer of goods and services.?The policy involves major restructuring, because competition leads to elimination of inefficient industries and companies.

The problem is, restructuring just doesn't work if there's no structure to start out with. You can't invite multinationals to set up shop in a country and expect healthy competition, when the other side can only offer a decayed infrastructure, a weak business sector and a demoralized population. In Iraq, decades of wars and sanctions have eroded public services, state nationalization has severely retarded development, and most of the intelligentsia have repatriated to foreign countries.

Neoliberal theory says underdeveloped nations can adopt the policy and jump start their economies into the 21st century. The attempt to hyper-develop led to a system crash in South America, where foreign companies have yoked local economies into peonage. With Iraq, the sting of occupation will only stoke the fury when the people watch their nation being carved up into so many marketable pie pieces.

The wisest policy would be for the U.S. to take responsibility for the war no one else seemed to have wanted, and back up political rhetoric with a fair deal for the Iraqi people.

Zainab Cheema is a senior international studies major from Ellicott City, Md.