by Naomi Klein
. . . 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. . . .
The fact that the boom never came and Iraq continues to tremble under
explosions of a very different sort should never be blamed on the absence of
a plan. Rather, the blame rests with the plan itself, and the
extraordinarily violent ideology upon which it is based. . . .
The tone of Bremer's tenure was set with his first major act on the job: he
fired 500,000 state workers, most of them soldiers, but also doctors,
nurses, teachers, publishers, and printers. Next, he flung open the
country's borders to absolutely unrestricted imports: no tariffs, no duties,
no inspections, no taxes. Iraq, Bremer declared two weeks after he arrived,
was "open for business."
One month later, Bremer unveiled the centerpiece of his reforms. Before the
invasion, Iraq's non-oil-related economy had been dominated by 200
state-owned companies, which produced everything from cement to paper to
washing machines. In June, Bremer flew to an economic summit in Jordan and
announced that these firms would be privatized immediately. . . .
But Bremer's economic engineering had only just begun. In September, to
entice foreign investors to come to Iraq, he enacted a radical set of laws
unprecedented in their generosity to multinational corporations. There was
Order 37, which lowered Iraq's corporate tax rate from roughly 40 percent to
a flat 15 percent. There was Order 39, which allowed foreign companies to
own 100 percent of Iraqi assets outside of the natural-resource sector. Even
better, investors could take 100 percent of the profits they made in Iraq
out of the country; they would not be required to reinvest and they would
not be taxed. Under Order 39, they could sign leases and contracts that
would last for forty years. Order 40 welcomed foreign banks to Iraq under
the same favorable terms. All that remained of Saddam Hussein's economic
policies was a law restricting trade unions and collective bargaining. . . .
As the British historian Dilip Hiro has shown, in Secrets and Lies:
Operation 'Iraqi Freedom' and After, the Iraqi exiles pushing for the
invasion were divided, broadly, into two camps. On one side were "the
pragmatists," who favored getting rid of Saddam and his immediate entourage,
securing access to oil, and slowly introducing free-market reforms. Many of
these exiles were part of the State Department's Future of Iraq Project,
which generated a thirteen-volume report on how to restore basic services
and transition to democracy after the war. On the other side was the "Year
Zero" camp, those who believed that Iraq was so contaminated that it needed
to be rubbed out and remade from scratch. The prime advocate of the
pragmatic approach was Iyad Allawi, a former high-level Baathist who fell
out with Saddam and started working for the CIA. The prime advocate of the
Year Zero approach was Ahmad Chalabi, whose hatred of the Iraqi state for
expropriating his family's assets during the 1958 revolution ran so deep he
longed to see the entire country burned to the ground-everything, that is,
but the Oil Ministry, which would be the nucleus of the new Iraq, the
cluster of cells from which an entire nation would grow. He called this
A parallel battle between pragmatists and true believers was being waged
within the Bush Administration. The pragmatists were men like Secretary of
State Colin Powell and General Jay Garner, the first U.S. envoy to postwar
Iraq. General Garner's plan was straightforward enough: fix the
infrastructure, hold quick and dirty elections, leave the shock therapy to
the International Monetary Fund, and concentrate on securing U.S. military
bases on the model of the Philippines. . . .
International law prohibits occupiers from selling state assets themselves,
but it doesn't say anything about the puppet governments they appoint.
Originally, Bremer had pledged to hand over power to a directly elected
Iraqi government, but in early November he went to Washington for a private
meeting with President Bush and came back with a Plan B. On June 30 the
occupation would officially end-but not really. It would be replaced by an
appointed government, chosen by Washington. This government would not be
bound by the international laws preventing occupiers from selling off state
assets, but it would be bound by an "interim constitution," a document that
would protect Bremer's investment and privatization laws. . . .
Immediately after the nominal end of the war, Congress appropriated $2.5
billion for the reconstruction of Iraq, followed by an additional $18.4
billion in October. Yet as of July 2004, Iraq's state-owned factories had
been pointedly excluded from the reconstruction contracts. Instead, the
billions have all gone to Western companies, with most of the materials for
the reconstruction imported at great expense from abroad.
With unemployment as high as 67 percent, the imported products and foreign
workers flooding across the borders have become a source of tremendous
resentment in Iraq and yet another open tap fueling the insurgency. And
Iraqis don't have to look far for reminders of this injustice; it's on
display in the most ubiquitous symbol of the occupation: the blast wall. The
ten-foot-high slabs of reinforced concrete are everywhere in Iraq,
separating the protected-the people in upscale hotels, luxury homes,
military bases, and, of course, the Green Zone-from the unprotected and
Iraq was to the neocons what Afghanistan was to the Taliban: the one place
on Earth where they could force everyone to live by the most literal,
unyielding interpretation of their sacred texts. . . .
MUST READ FULL TEXT
Naomi Klein, "What is Being Planned in
Iraq is Not Reconstruction but Robbery," Guardian, April 14, 2003
Enver Masud, "AN OPEN LETTER TO THE
PEOPLE OF IRAQ," The Wisdom Fund, April 23, 2003
David Teather, "American to Oversee Iraqi
Oil Industry," Guardian, April 26, 2003
Enver Masud, "New Iraq
Constitution a Pretext for Exploitation," The Wisdom Fund, September
Enver Masud, "Iraq: $64 Lunch, $125,000 Truck
Driver," The Wisdom Fund , January 29, 2004
Evelyn Leopold, "UN Council Unanimously Adopts
Iraq Resolution," Reuters, June 8, 2004
[The main proposal would transfer ownership of $57bn in unpaid Iraqi debts.
The debts would be assigned to a foundation created and controlled by a
consortium in which the key players are the Carlyle Group, the Albright
Group (headed by another former secretary of state, Madeleine Albright) and
several other well-connected firms.
Under the deal, Kuwait would also give the consortium $2bn to invest in a
private equity fund devised by the consortium, with half of that going to
The consortium would then use its personal connections to persuade world
leaders that Iraq must "maximize" its reparation payments to Kuwait. The
more the consortium gets Iraq to pay over a period, the more Kuwait
collects, with the consortium taking a 5% commission or more.
The goal of maximizing Iraq's debt payments directly contradicts the stated
US foreign policy aim of drastically reducing Iraq's debt burden.--Naomi
special envoy embroiled in controversy over Iraq debt: Consortium plans to
cash in as Baker asks countries to end £200bn burden," October 13, 2004]
[The Economy Plan goes boldly where no invasion plan has gone before: the
complete rewrite, it says, of a conquered state's "policies, laws and
regulations." Here's what you'll find in the Plan: A highly detailed
program, begun years before the tanks rolled, for imposing a new regime of
low taxes on big business, and quick sales of Iraq's banks and bridges - in
fact, "ALL state enterprises" - to foreign operators. There's more in the
Plan, part of which became public when the State Department hired consulting
firm to track the progress of the Iraq makeover. Example: This is likely
history's first military assault plan appended to a program for toughening
the target nation's copyright laws.
And when it comes to oil, the Plan leaves nothing to chance - or to the
Iraqis. Beginning on page 73, the secret drafters emphasized that Iraq
would have to "privatize" (i.e., sell off) its "oil and supporting
industries." The Plan makes it clear that - even if we didn't go in for the
oil - we certainly won't leave without it. . . .
The oil section of the Plan, obtained after a year of wrestling with the
administration over the Freedom of Information Act, calls for Iraqis to sell
off to "IOCs" (international oil companies) the nation's "downstream"
assets - that is, the refineries, pipelines and ports that, unless under armed
occupation, a Mideast nation would be loathe to give up. . . .
Garner's 90-days-to-democracy pledge ran into a hard object: The Economy
Plan's 'Annex D.' Disposing of a nation's oil industry - let alone redrafting
trade and tax laws - can't be done in a weekend, nor in 90 days. Annex D
lays out a strict 360-day schedule for the free-market makeover of Iraq.
And there's the rub: It was simply inconceivable that any popularly elected
government would let America write its laws and auction off the nation's
crown jewel, its petroleum industry.
Elections would have to wait. As lobbyist Norquist explained when I asked
him about the Annex D timetable, "The right to trade, property rights, these
things are not to be determined by some democratic election." Our troops
would simply have to stay in Mesopotamia a bit longer.
New World Orders 12, 37, 81 and 83
Gen. Garner resisted - which was one of the reasons for his swift sacking by
Secretary of State Donald Rumsfeld on the very night he arrived in Baghdad
last April. Rummy had a perfect replacement ready to wing it in Iraq to
replace the recalcitrant general. Paul Bremer may not have had Garner's
experience on the ground in Iraq, but no one would question the
qualifications of a man who served as managing director of Kissinger
Associates.--Greg Palast, "Adventure
Capitalism," TomPaine.com, October 26, 2004]
[The New York Times has not printed a word about Baker's conflict, despite
the fact that when Baker was first appointed envoy, it published an
editorial calling on him to resign from Carlyle in order to "perform
honorably in his new public job." The Kerry campaign has been equally
silent, apparently for fear that any criticism would boomerang onto the
Democrats because of Albright. . . .
Iraq is being plunged deeper into debt, with $836 million in new loans and
grants now flowing from the IMF and the World Bank.--Naomi Klein, "Carlyle Covers
Up," The Nation, October 29, 2004]
Craig S. Smith, "Major Creditors in Accord to Waive 80% of Iraq Debt," New York Times,
November 22, 2004
Rajiv Chandrasekaran, "Ties to GOP Trumped Know-How Among Staff Sent to
Rebuild Iraq," Washington Post, September 17, 2006
MOVIE: Robert Greenwald, "Iraq for
Sale," iraqforsale.org, September 26, 2006
[An unpublished 513-page federal history of the American-led reconstruction
of Iraq depicts an effort crippled before the invasion by Pentagon planners
who were hostile to the idea of rebuilding a foreign country, and then
molded into a $100 billion failure by bureaucratic turf wars, spiraling
violence and ignorance of the basic elements of Iraqi society and
infrastructure.--James Glanz and T. Christian Miller, "Official History
Spotlights Iraq Rebuilding Blunders," New York Times, December 14, 2008]
Iraq Investment and Reconstruction