The frontier of modern imperialism: primitive accumulation in Iraq, at the taxpayers expense
(Thanks to Richard H. for making me aware of this important article, which every socialist should read; I have excerpted the important bits and slightly edited it - JB) This coming October 23 to 24, the United States will be sitting down with rich creditor countries, the International Monetary Fund (IMF) and the World Bank (WB) during an international donors' conference on Iraq in Madrid. The IMF, the World Bank and the UN have estimated that Iraq will need US$36 billion for reconstruction within the next four years, in addition to $19 billion for other nonmilitary needs calculated by the American occupation regime. [note this is in addition to expenditure of the US armed forces on the war - JB]. With few options left, the US will be passing the hat. This meeting could be a turning point in the occupation because whether the hat goes back to the US full or not will determine whether the US can afford to stay. The decision of donor countries to cough up cash will depend, in turn, on whether this continues to be a unilateral or multilateral economic takeover of an occupied country. (...) A few weeks after President George W Bush announced the end of major hostilities in Iraq, the US managed to pass UN Resolution 1483, which created the so-called UN Development Fund. Under this fund, all of Iraq's past and future oil revenues, as well as all the assets of the former Iraqi government located anywhere in the world, would be placed under the direct control of the US, as overseen by the IMF and the World Bank - two institutions in which the US has considerable voting power. The resolution passed the UN Security Council, because the US assured Russia, France and China that all contracts entered into by their firms under the UN Oil-for-Food program during the sanctions regime would be honored by the occupation authority and any subsequent interim government. The development fund is intended to finance the rehabilitation of all that's been damaged by the war. The choice of corporations to undertake this reconstruction, however, has so far been a question reserved exclusively for the US. And since most contracts are negotiated on a cost-plus basis, the price of the reconstruction is all up to the chosen contractor. In other words, what will be paid to Kellogg, Brown and Root to repair Iraq's oil fields and machinery, for example, will be financed out of Iraqi oil revenues at a price determined by Kellogg, Brown and Root itself. (...) the fund will be used for lending money to US companies wishing to do business in Iraq. Few risk-averse private banks will willingly give money to any investor applying for a loan to open business in war-torn Iraq. But with the development fund, there'd be lots of money for the daring, adventurous, or simply bargain-hunting types. And in Iraq, there'd be lots of bargains around. The US handpicked Iraq Governing Council's (GC) Finance Minister, Kamel al-Kelani, announced on September 21 that all of Iraq's assets and state-owned corporations, except the oil industry, will be sold off. As sweeteners, the buyers will be entitled to 100 percent ownership of their purchase, full repatriation of profits, and minimal taxation. Given Iraq's present condition, the items on the bidding block will come very cheap. But in a few more years, what was bought at dirt-cheap prices - using the Iraqis' oil revenues - could then be sold for a nice profit. (...) . The use of the Iraqis' money to finance the massive privatization scheme of their economy means that the Iraqis themselves will be paying US corporations to buy off their own assets from them. But Iraq's oil, though definitely plentiful, is not enough (...) Worse news is that even the multinational oil giants are keeping their distance. (...) the US is considering converting Iraq's expected future oil revenues into marketable securities that could be sold at discounted rates in the present (...) The Bush administration had just given its richest taxpayers $1.8 trillion in tax cuts, but it cannot afford to spend $20 billion on the people it has just liberated. (...) The trade deficit is now hitting the perilous 5 percent mark and still rising; the budget gap has been a quick turnaround from previous years' promise of uninterrupted surpluses way into the future. At $5 billion a month, the monthly cost of occupying Iraq, excluding reconstruction, is already approaching that of Vietnam. (...) Republicans are convinced that the US has no obligations to Iraqis whatsoever and that any US funds used in reconstructing Iraq should be treated as loans, not grants. Should this be approved, and chances are high that it will, Iraqis will in effect be borrowing money from the US in order for them to pay back the US corporations that will be rebuilding almost everything in their country (...) Using money borrowed from the US, Iraqis will need to pay the very same corporations that would have had no business in Iraq if there were no war. (...) Having
Re: The frontier of modern imperialism: primitive accumulation in Iraq, at the taxpayers expense
Well, that's about as succinct a presentation of the problem as I've seen so far. What have we got? A recipie for war-lord imperalism: 1. Destroy/ravage/immiserate/traumatize a country through bombing, economic sancations, and chemical warfareto soften it up and make it a reconstruction candidate and helpless to resist that reconstruction. 2. Reconstruct and liberate the country and pay for it by appropriating all the wealth and natural resources of the country, which you then sell off to those who are willing to bet that Iraq can be reconstructed into a vast labor camp ...with lots of oil. 3. Lather, rinse and repeat in any country that has desired resources or desperate labor pool. 4. Laugh all the way to the bank. Reasons for optimisim include: 1. That the arrogance of the Bush junta will prevent their reaching an understanding with potential looting associates. 2. That the Iraqi people will resort to a scorched earth policy and guerrilla warfare to prevent this from happening. (See War and Peace.) 3. 1 2. 4. That this development does not indicate a triumphant capitalism, but a capitalism in its death throes. An empire that is morally, socially, and economically bankrupt. Empires do die because something in human nature either revolts or cannot thrive in this kind of environment. We, on the left, are not supposed to use Hitler analogies lightly and I do not think I do so. But in essence, war-lord capitalism reminds me a lot of Hitler's idea of turning Eastern Europe and the Soviet Union into a vast labor camp. Or, if you prefer a more poetic metaphor, the situation with Iraq is like a man raping a woman and then asking her to pay for her rehabilitation so that she can continue to be serially raped. De Sade created similar scenarios in Justine and the 120 Days of Sodom... Joanna Jurriaan Bendien wrote: (Thanks to Richard H. for making me aware of this important article, which every socialist should read; I have excerpted the important bits and slightly edited it - JB) This coming October 23 to 24, the United States will be sitting down with rich creditor countries, the International Monetary Fund (IMF) and the World Bank (WB) during an international donors' conference on Iraq in Madrid. The IMF, the World Bank and the UN have estimated that Iraq will need US$36 billion for reconstruction within the next four years, in addition to $19 billion for other nonmilitary needs calculated by the American occupation regime. [note this is in addition to expenditure of the US armed forces on the war - JB]. With few options left, the US will be passing the hat. This meeting could be a turning point in the occupation because whether the hat goes back to the US full or not will determine whether the US can afford to stay. The decision of donor countries to cough up cash will depend, in turn, on whether this continues to be a unilateral or multilateral economic takeover of an occupied country. (...) A few weeks after President George W Bush announced the end of major hostilities in Iraq, the US managed to pass UN Resolution 1483, which created the so-called UN Development Fund. Under this fund, all of Iraq's past and future oil revenues, as well as all the assets of the former Iraqi government located anywhere in the world, would be placed under the direct control of the US, as overseen by the IMF and the World Bank - two institutions in which the US has considerable voting power. The resolution passed the UN Security Council, because the US assured Russia, France and China that all contracts entered into by their firms under the UN Oil-for-Food program during the sanctions regime would be honored by the occupation authority and any subsequent interim government. The development fund is intended to finance the rehabilitation of all that's been damaged by the war. The choice of corporations to undertake this reconstruction, however, has so far been a question reserved exclusively for the US. And since most contracts are negotiated on a cost-plus basis, the price of the reconstruction is all up to the chosen contractor. In other words, what will be paid to Kellogg, Brown and Root to repair Iraq's oil fields and machinery, for example, will be financed out of Iraqi oil revenues at a price determined by Kellogg, Brown and Root itself. (...) the fund will be used for lending money to US companies wishing to do business in Iraq. Few risk-averse private banks will willingly give money to any investor applying for a loan to open business in war-torn Iraq. But with the development fund, there'd be lots of money for the daring, adventurous, or simply bargain-hunting types. And in Iraq, there'd be lots of bargains around. The US handpicked Iraq Governing Council's (GC) Finance Minister, Kamel al-Kelani, announced on September 21 that all of Iraq's assets and state-owned corporations, except the oil industry, will be sold off. As sweeteners, the buyers will be entitled to 100 percent ownership of their purchase, full
Re: The frontier of modern imperialism: primitive accumulation in Iraq, at the taxpayers expense
joanna bujes wrote: 2. Reconstruct and liberate the country and pay for it by appropriating all the wealth and natural resources of the country, which you then sell off to those who are willing to bet that Iraq can be reconstructed into a vast labor camp ...with lots of oil. I doubt Washington or MNCs are terribly interested in Iraqi labor. Oil, yes. But little nonoil capital goes into the major oil exporting countries. Besides, Iraqis have an attitude problem. They're not docile. With so many other places to invest, why take the risk? Doug
Re: The frontier of modern imperialism: primitive accumulation in Iraq, at the taxpayers expense
Empires do die because something in human nature either revolts or cannot thrive in this kind of environment. I agree totally with your sentiments, but you may not be correct on this point. Suppose that instead of getting people to revolt, you get them to mutate in some way, let's think of a biophysical mutation (or, in religious terms, a rapture) which causes people to see the world in a different way, and so that they see the trading process in a different way, so that terms of exchange can be transformed, so that cultures change, and so that social institutions change, and consequently so that different values are placed on assets and liabilties. Couldn't the empire continue in that case, for example, take the case of New Zealand, if you only BELIEVE ? Jurriaan
Re: The frontier of modern imperialism: primitive accumulation in Iraq, at the taxpayers expense
Yes, the Life is Beautiful argument. (That Italian movie where a clownish man acts out in order to convince his son that a concentration camp is not a concentration camp. I couldn't force myself to see it, but apparently that was the plot)...or perhaps Schindler's List, where the essential argument is you can have benign capitalism (Schindler) or psychotic capitalism...there is no alternative. Still, can this lead to a vital society? History argues otherwise. The message being disseminated in the U.S. is that all the manufacturing jobs can go abroad because then Americans will simply be the managers of world wealth and world labor, what it takes to enforce that is a different story--whether it is through military means or religious brainwashing. I mean it might work, but not for very long. Perhaps, for once, I'm being an optimist. Joanna Jurriaan Bendien wrote: Empires do die because something in human nature either revolts or cannot thrive in this kind of environment. I agree totally with your sentiments, but you may not be correct on this point. Suppose that instead of getting people to revolt, you get them to mutate in some way, let's think of a biophysical mutation (or, in religious terms, a rapture) which causes people to see the world in a different way, and so that they see the trading process in a different way, so that terms of exchange can be transformed, so that cultures change, and so that social institutions change, and consequently so that different values are placed on assets and liabilties. Couldn't the empire continue in that case, for example, take the case of New Zealand, if you only BELIEVE ? Jurriaan
