Baghdad Year Zero: Pillaging Iraq in pursuit of a neocon utopia

[Jcrowley]

Baghdad Year Zero
Pillaging Iraq in pursuit of a neocon utopia
Posted on Friday, September 24, 2004. Originally from Harper's Magazine, September 2004. By Naomi Klein.
Sources

It was only after I had been in Baghdad for a month that I found what I was looking for. I had traveled to Iraq a year after the war began, at the height of what should have been a construction boom, but after weeks of searching I had not seen a single piece of heavy machinery apart from tanks and humvees. Then I saw it: a construction crane. It was big and yellow and impressive, and when I caught a glimpse of it around a corner in a busy shopping district I thought that I was finally about to witness some of the reconstruction I had heard so much about. But as I got closer I noticed that the crane was not actually rebuilding anything—not one of the bombed-out government buildings that still lay in rubble all over the city, nor one of the many power lines that remained in twisted heaps even as the heat of summer was starting to bear down. No, the crane was hoisting a giant billboard to the top of a three-story building. SUNBULAH: HONEY 100% NATURAL, made in Saudi Arabia.

Seeing the sign, I couldn't help but think about something Senator John McCain had said back in October. Iraq, he said, is “a huge pot of honey that's attracting a lot of flies.” The flies McCain was referring to were the Halliburtons and Bechtels, as well as the venture capitalists who flocked to Iraq in the path cleared by Bradley Fighting Vehicles and laser-guided bombs. The honey that drew them was not just no-bid contracts and Iraq's famed oil wealth but the myriad investment opportunities offered by a country that had just been cracked wide open after decades of being sealed off, first by the nationalist economic policies of Saddam Hussein, then by asphyxiating United Nations sanctions.

Looking at the honey billboard, I was also reminded of the most common explanation for what has gone wrong in Iraq, a complaint echoed by everyone from John Kerry to Pat Buchanan: Iraq is mired in blood and deprivation because George W. Bush didn't have “a postwar plan.” The only problem with this theory is that it isn't true. The Bush Administration did have a plan for what it would do after the war; put simply, it was to lay out as much honey as possible, then sit back and wait for the flies.

* * *

The honey theory of Iraqi reconstruction stems from the most cherished belief of the war's ideological architects: that greed is good. Not good just for them and their friends but good for humanity, and certainly good for Iraqis. Greed creates profit, which creates growth, which creates jobs and products and services and everything else anyone could possibly need or want. The role of good government, then, is to create the optimal conditions for corporations to pursue their bottomless greed, so that they in turn can meet the needs of the society. The problem is that governments, even neoconservative governments, rarely get the chance to prove their sacred theory right: despite their enormous ideological advances, even George Bush's Republicans are, in their own minds, perennially sabotaged by meddling Democrats, intractable unions, and alarmist environmentalists.

Iraq was going to change all that. In one place on Earth, the theory would finally be put into practice in its most perfect and uncompromised form. A country of 25 million would not be rebuilt as it was before the war; it would be erased, disappeared. In its place would spring forth a gleaming showroom for laissez-faire economics, a utopia such as the world had never seen. Every policy that liberates multinational corporations to pursue their quest for profit would be put into place: a shrunken state, a flexible workforce, open borders, minimal taxes, no tariffs, no ownership restrictions. The people of Iraq would, of course, have to endure some short-term pain: assets, previously owned by the state, would have to be given up to create new opportunities for growth and investment. Jobs would have to be lost and, as foreign products flooded across the border, local businesses and family farms would, unfortunately, be unable to compete. But to the authors of this plan, these would be small prices to pay for the economic boom that would surely explode once the proper conditions were in place, a boom so powerful the country would practically rebuild itself.

http://www.harpers.org/BaghdadYearZero.html

[Jcrowley]

1. Oil for Sale: Iraq Study Group Recommends Privatization

Oil for Sale: Iraq Study Group Recommends Privatization

By Antonia Juhasz, AlterNet. Posted December 7, 2006.

In its heavily anticipated report released on Wednesday, the Iraq Study Group made at least four truly radical proposals.

The report calls for the United States to assist in privatizing Iraq's national oil industry, opening Iraq to private foreign oil and energy companies, providing direct technical assistance for the "drafting" of a new national oil law for Iraq, and assuring that all of Iraq's oil revenues accrue to the central government.

President Bush hired an employee from the U.S. consultancy firm Bearing Point Inc. over a year ago to advise the Iraq Oil Ministry on the drafting and passage of a new national oil law. As previously drafted, the law opens Iraq's nationalized oil sector to private foreign corporate investment, but stops short of full privatization. The ISG report, however, goes further, stating that "the United States should assist Iraqi leaders to reorganize the national oil industry as a commercial enterprise." In addition, the current Constitution of Iraq is ambiguous as to whether control over Iraq's oil should be shared among its regional provinces or held under the central government. The report specifically recommends the latter: "Oil revenues should accrue to the central government and be shared on the basis of population." If these proposals are followed, Iraq's national oil industry will be privatized and opened to foreign firms, and in control of all of Iraq's oil wealth.

The proposals should come as little surprise given that two authors of the report, James A. Baker III and Lawrence Eagleburger, have each spent much of their political and corporate careers in pursuit of greater access to Iraq's oil and wealth.

"Pragmatist" is the word most often used to describe Iraq Study Group co-chair James A. Baker III. It is equally appropriate for Lawrence Eagleburger. The term applies particularly well to each man's efforts to expand U.S. economic engagement with Saddam Hussein throughout the 1980s and early 1990s. Not only did their efforts enrich Hussein and U.S. corporations, particularly oil companies, it also served the interests of their own private firms.

http://www.alternet.org/story/45190

[Jcrowley]

2. Corporate Slush Funds for Baghdad

Corporate Slush Funds for Baghdad
Plugging Iraq into Globalization
By STEVE KRETZMANN and JIM VALLETTE

In early April, during the initial assault on Baghdad, soldiers set up forward bases named Camp Shell and Camp Exxon until Pentagon PR realized that didn't look very good and ordered them renamed. Those soldiers knew the score. Several months and dozens of lives later, Bechtel, Halliburton, and a host of oil companies are ensuring that the fledgling "free market" in Iraq will be particularly free for US corporations.

The ultimate prize in Iraq, of course, is oil, and the Bush/Cheney gang has uncoiled a vastly underreported legal and financial cord that plugs U.S corporate control into these resources at least through the year 2007. The basic wiring has two prongs and is already complete. The first part, created by the UN under US pressure is the Development Fund for Iraq­ which is to be controlled by the US and advised by the World Bank and the International Monetary Fund (IMF). Unsurprisingly, this is looking more and more like a slush fund for corporate welfare. The second is a recent Bush executive order that provides absolute legal protection for U.S. interests in Iraqi oil. And a third and final prong is being crafted to ground the whole system and get as much profit as possible out of it.


The Corporate Slush Fund for Iraq

By promising the United Nations a threadbare role in the reconstruction of Iraq, and giving the World Bank and International Monetary Fund accounting oversight, the U.S. managed to buy the world's largest multilateral institutions into an incredible deal for private U.S. interests.

On May 22, the UN Security Council unanimously adopted Resolution 1483, which ended sanctions and endorsed the creation of Development Fund for Iraq, to be overseen by a board of accountants, including UN, World Bank, and IMF representatives. It endorsed the transfer of over $1 billion (of Iraqi oil money) from the Oil-for-Food program into the Development Fund. All proceeds from the sale of Iraqi oil and natural gas are also to be placed into the fund.

The fund, controlled by U.S. viceroy Paul Bremer, has swelled to $7 billion, thanks to a $3.1 billion contribution from the U.S. Congress, and billions of dollars more in seized assets of the Iraqi government.

And to who have the occupying powers pledged these riches? The UN resolution states that the fund "shall be used in a transparent manner to meet the humanitarian needs of the Iraqi people." John Negroponte, the U.S. representative at the United Nations, told reporters after the vote, "the intent is to use Iraq's resources and to dispose and dispense Iraq's resources to the benefit of the people of Iraq." That paternalism towards Iraq's people is mighty white of Ambassador Negroponte.

http://www.counterpunch.org/kretzmann07222003.html

[Jcrowley]

3. Crude Designs: The Ultimate Prize: Anglo-American interests in Gulf oil

1. The Ultimate Prize: Anglo-American interests in Gulf oil

Back to top
The UK and US have long had their eyes on the massive energy resources of Iraq and the Gulf. In 1918 Sir Maurice Hankey, Britain’s First Secretary of the War Cabinet wrote:

“Oil in the next war will occupy the place of coal in the present war, or at least a parallel place to coal. The only big potential supply that we can get under British control is the Persian and Mesopotamian supply… Control over these oil supplies becomes a first class British war aim.”(1)

After World War II both the US and UK identified the importance of Middle Eastern oil. British officials believed that the area was “a vital prize for any power interested in world influence or domination”(2), while their US counterparts saw the oil resources of Saudi Arabia as a “stupendous source of strategic power and one of the greatest material prizes in world history”(3).

TURNING BACK TO THE MIDDLE EAST

With over 60% of the world’s oil reserves,(4) their interest in the Gulf region is unsurprising. Iraq alone has the third largest oil reserves on the planet – accounting for 10% of the world total. Iraq is also reckoned to have the world’s largest unexplored potential, primarily in the Western Desert. On top of its 115 billion barrels of proven reserves, Iraq is estimated to have between 100 and 200 billion barrels of further possible (as yet undiscovered) reserves. Furthermore, not only are Iraqi and Gulf reserves huge, they are mostly onshore, in favourable reservoir structures, and extractable at extremely low cost.

Since the nationalisation of the major oil industries of the Middle East in the 1970s, Gulf reserves have been out of the direct control of the West and off the balance sheets of its companies. The oil companies have filled the gap by moving into the North Sea and Alaska in the 1970s and 1980s, and then in the 1990s by opening new ‘frontier’ areas such as the Caspian Sea and offshore West Africa.

http://www.globalpolicy.org/security/oil/2005/crudedesigns.htm

[Jcrowley]

4. Crude Dudes

Nestled into the heart of the area of heaviest oil concentration in the world is Iraq, overflowing with low-hanging fruit. No permafrost, no deep water. Just giant pools of oil, right beneath the warm ground. This is fruit sagging so low, as it were, that it practically touches the ground under the weight of its ripeness.

Not only does Iraq have vast quantities of easily accessible oil, but its oil is almost untouched. "Think of Iraq as virgin territory .... This is bigger than anything Exxon is involved in currently .... It is the superstar of the future," says Gheit, "That's why Iraq becomes the most sought-after real estate on the face of the earth."

Gheit just smiles at the notion that oil wasn't a factor in the U.S. invasion of Iraq. He compares Iraq to Russia, which also has large undeveloped oil reserves. But Russia has nuclear weapons. "We can't just go over and ... occupy (Russian) oil fields," says Gheit. "It's a different ballgame." Iraq, however, was defenceless, utterly lacking, ironically, in weapons of mass destruction. And its location, nestled in between Saudi Arabia and Iran, made it an ideal place for an ongoing military presence, from which the U.S. would be able to control the entire Gulf region. Gheit smiles again: "Think of Iraq as a military base with a very large oil reserve underneath .... You can't ask for better than that."

There's something almost obscene about a map that was studied by senior Bush administration officials and a select group of oil company executives meeting in secret in the spring of 2001. It doesn't show the kind of detail normally shown on maps - cities, towns, regions. Rather its detail is all about Iraq's oil.

http://www.truthout.org/cgi-bin/artman/exec/view.cgi/4/6376

[Jcrowley]

5. New Iraq Oil Law To Open Iraq's Oil Reserves to Western Companies

Tuesday, February 20th, 2007
New Iraq Oil Law To Open Iraq's Oil Reserves to Western Companies

<snip>

AMY GOODMAN: And explain what it says, now that you’ve finished translating it.

RAED JARRAR: It said so many things. I don’t think we can summarize it this short, because it’s a very long document, around thirty pages. But majorly, there are three major points that I think we should talk about. Financially, it legalizes very unfair types of contracts that will put Iraq in very long-term contracts that can go up to thirty-five years and cause the loss of hundreds of billions of dollars from Iraqis for no cause.

And the second point is concerning Iraq's sovereignty. Iraq will not be capable of controlling the levels -- the limits of production, which means that Iraq cannot be a part of OPEC anymore. And Iraq will have this very complicated institution called the Federal Oil and Gas Council, that will have representatives from the foreign oil companies on the board of it, so representatives from, let’s say, ExxonMobil and Shell and British Petroleum will be on the federal board of Iraq approving their own contracts.

And the third point is the point about keeping Iraq’s unity. The law is seen by many Iraqi analysts as a separation for Iraq fund. The law will authorize all of the regional and small provinces’ authorities. It will give them the final say to deal with the oil, instead of giving this final say to central federal government, so it will open the doors for splitting Iraq into three regions or even maybe three states in the very near future.

AMY GOODMAN: Antonia Juhasz, what is the significance of this for Western oil companies?

ANTONIA JUHASZ: Well, in my mind, the law certainly opens the door to US oil companies and the Bush administration winning a very large piece of their objective of going to war in Iraq, at least winning it on paper. The law does almost word for word what was laid out in the Baker-Hamilton recommendation, which I discussed previously on your show, which is, at the very basic level, to turn Iraq's nationalized oil system, the model that 90% of the world’s oil is governed by, take its nationalized oil system and turn it into a commercial system fully open to foreign corporate investment on terms as of yet to be decided. So it leaves vague this very important question of what type of contracts will the Iraqi government use. But what it leaves clear is that basically every level of the oil industry will be open to private foreign companies.

<snip>


http://www.democracynow.org/article.pl?sid=07/02/20/1523250

[malaise]

6. Blair was crowing about this

a while ago. They make me sick.

[Jcrowley]

7. Full text of Iraq's new oil law can be found here

The New Iraqi Oil Law: Leaked

By Raed Jarrar

02/19/07 "ICH" --- - I spent the weekend translating this leaked copy of the Iraqi oil law with Niki (thank you Salam for sending me the link). Translating legal documents can be really hard!

We just finished the translation, and you can download it by clicking here.

Please feel free to widely distribute this document. It's important to start a stronger debate and to try to educate Iraqis and Americans about this catastrophic law that will facilitate the further looting of Iraqi oil, and will achieve nothing other than increasing the levels of violence and anger in Iraq.

This law legalizes PSAs (production sharing agreements) in Iraq. Iraq will be the only country in the middle east with such contracts privatising Iraqi oil and giving foreign companies crazy rates of profit that may reach to more than three fourth of the general revenue. Iraq and Iraqis need every Dinar that comes from oil sales. In addition to the financial aspects of this law, it can be considered the funding tool for splitting Iraq into three states. It undermines the central government and distributes oil revenues directly to the three regions, which sets the foundations for what Iraq's enemies are trying to achieve in terms of establishing three independent states.

Privatizing Iraq's oil and splitting Iraq into three regions are just two negative features of this 29 pages law. I am translating some important analysis written by Iraqis and other Arabs, and am also working with British and U.S. experts to publish more analysis soon.

http://www.informationclearinghouse.info/article17120.htm

[malaise]

8. Thanks n/t

[Karenina]

9. K&R!!!

[Jcrowley]

10. A little background is useful

Oil Companies in Iraq:
A Century of Rivalry and War
By James A. Paul
Global Policy Forum
November 2003



--------------------------------------------------------------------------------

Conference in Berlin on Corporate Accountability – November 25-26, 2003

--------------------------------------------------------------------------------

Iraq: the Struggle for Oil (August 2002)
Oil in Iraq: the Heart of the Crisis (December 2002)
The Iraq Oil Bonanza: Estimating Future Profits (January 28, 2004)

The United States and the United Kingdom did not wage war on Iraq for the officially stated reasons. That much is obvious. The world’s superpower and its key ally were not acting because they feared the Iraqi government’s weapons of mass destruction or its ties with the terrorist group al-Qaeda. Nor were they fighting to bring democracy to the Middle East, a region where the two governments had long supported reactionary monarchs and odious dictators, including Iraqi president Saddam Hussein himself.

It is time, then, to set aside the sterile discussions about “intelligence failures” and to consider a deeper reason for the conflict. This paper will argue that the war was primarily a “war for oil” in which large, multinational oil companies and their host governments acted in secret concert to gain control of Iraq's fabulous oil reserves and to gain leverage over other national oil producers. In arguing for the primacy of oil, we do not imply that other factors were not at play. The imperial dreams of the neo-con advisors in Washington contributed to the final outcome, as did the re-election strategies of the political operatives in the White House. But the Iraq war did not emerge solely from the Bush administration. As we shall see, it involved both London and Washington, through the course of many governments. And it emerged from a decades-long effort by the world's largest companies to appropriate the planet's most lucrative natural resource deposits.

Several elements contribute to make the case for an oil war: the enormous, long-term political influence of the oil companies, the close personal ties between the companies and their host governments, the long history of prior conflicts and wars over Iraqi oil, and the enormous potential profitability of the Iraqi fields. To consider the evidence, and answer the questions of skeptics, we must begin by reviewing the companies’ power and influence over a period of many decades. Later, we will turn to the immediate events leading up to the 2003 war itself.

Companies’ Great Size & Global Presence

By the early 20th Century, when most business firms were relatively small by modern standards and purely national in scope, Standard Oil and Royal Dutch Shell were already global companies that controlled a worldwide network of production and distribution. By 1911, they held rich production fields in the Dutch East Indies (today’s Indonesia), Romania, Russia, the United States, Venezuela and Mexico, as well as refineries, pipelines, rail cars, tankers, storage depots and other facilities in dozens of countries. Standard Oil alone had a fleet of nearly 100 ships.1

Large as they were a century ago, the oil companies have since grown mightily, due to worldwide collusion in production and pricing and to fierce backing by their host governments. For decades, the so-called “Seven Sisters,” all of them firms based in the US or the UK, dominated the industry and ruled the global oil market through a tightly-knit cartel. Though nationalizations by producer countries in the 1970s dealt a serious blow to these firms, they continued to dominate the oil industry through control over the"downstream" end of the business -- transport, refining, petrochemicals, and marketing -- while building new production facilities in more friendly locations.2

<snip>

http://www.globalpolicy.org/security/oil/2003/2003companiesiniraq.htm

[Karenina]

11. Would that a significant majority

of those exposed to this information were able to process it... It really is everything one needs to know in news, sports and weather. ;-)

[Jcrowley]

12. Iraq 101: Players, Haters - Iraqi Politics at a Glance

Iraq 101: Players, Haters - Iraqi Politics at a Glance



March 01 , 2007



Shiites

Ayatollah Sistani. A crusty old cleric whose delphic pronouncements are received as gospel by his followers, Sistani almost never leaves his house and has spurned U.S. officials’ pleas for a meeting.

His once-supreme influence is declining in favor of the Shiite militias, but he did help put together the United Iraqi Alliance bloc, by far the biggest of the multiparty coalitions that dominate Iraq’s Parliament.

Islamic Dawa. One of the groups in the United Iraqi Alliance, Dawa is the party of current prime minister Nouri al-Maliki. It was founded in 1957 by Shiite ayatollahs as a counterforce to the Communist and Baath parties. Dawa later won support from Iran’s Ayatollah Khomeini, formed a terrorist branch, and in 1983 bombed the U.S. Embassy in Kuwait. Today, it is led by Islamist scholars. Supreme Council for the Islamic Revolution in Iraq. sciri and its armed wing, the Badr Brigade, were founded as a fundamentalist Shiite party in 1982, under the tutelage of Ayatollah Khomeini’s Revolutionary Guard; they have been supported by Iran ever since.

Party leader Abdel Aziz al-Hakim, a cleric and former commander of the Badr Brigade who favors autonomy for the Shiite south, was invited to the White House last year. sciri is blamed for torture and assassinations, and its members have infiltrated the Iraqi army and police.

Mahdi Army. A cluster of militias led by the controversial and charismatic (in a grim-faced sort of way) thirtysomething cleric Muqtada al-Sadr, scion of the Sadr family that helped found Dawa. Its tens of thousands of armed men are only loosely under Sadr’s control. Like sciri, the Mahdi Army has spawned death squads, including a possibly rogue unit in Baghdad led by Abu Deraa, "the Zarqawi of the Shiites." Sadr, who also has ties to Iran, is more of an Iraqi nationalist than other Iran-allied Shiites.


http://www.motherjones.com/cgi-bin/print_article.pl?url=http://www.motherjones.com/news/featurex/2007/03/players_haters_iraqi_politics_at_a_glance.html

[magellan]

13. Neocon utopia or neoliberal?

A bit of both really. The neocons (global domination and subjugation through US military power) and neolibs (global US corporate domination and subjugation through "free trade") are fractious allies in Iraq as elsewhere. The neocons invade and open a country to corporate interests; the neolibs handle the marketing. Both reap the benefits, and both are deadly to true democracy.

This was indeed the plan for Iraq. Foreign corporations were lining up to plant their flags and sell their wares in Baghdad until the neocon occupation plan (I believe lack of a plan was the plan) made that impossible. Only the MIC is profiting so far, with the oil barons not far behind.

And the World Bank is now getting involved, promising loans to get Iraq "reconstruction" going and stimulate the economy, but that's just another death knell for the Iraqi people who will suffer under that enormous debt for decades to come while a few at the top of the Iraqi government and the oil barons profit from the oil sales.

[Karenina]

14. BTTT!

:kick: