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2003-11-10

Iraq is Not America’s to Sell – Author and Journalist Naomi Klein on America’s Corporate Control of Iraq

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"It’s too late to stop the war, but it’s not too late to deny Iraq’s invaders the myriad economic prizes they went to war to collect in the first place"–We speak with renowned author and journalist Naomi Klein. [Includes transcript]

Click here to read to full transcript In her latest article, Naomi Klein writes:

“Bring Halliburton home. Cancel the contracts. Ditch the deals. Rip up the rules. Those are just a few of the suggestions for slogans that could help unify the growing movement against the occupation of Iraq. So far, activist debates have focused on whether the demand should be for a complete withdrawal of troops, or for the United States to cede power to the United Nations.

“But the "troops out" debate overlooks an important fact. If every last soldier pulled out of the Gulf tomorrow and a sovereign government came to power, Iraq would still be occupied: by laws written in the interest of another country; by foreign corporations controlling its essential services; by 70% unemployment sparked by public sector layoffs.

"Any movement serious about Iraqi self-determination must call not only for an end to Iraq’s military occupation, but to its economic colonisation as well."

  • Naomi Klein, award-winning journalist and author of Fences and Windows: Dispatches From the Front Lines of the Globalization Debate and No Logo: Taking Aim at the Brand Bullies.

TRANSCRIPT

AMY GOODMAN: Bring Halliburton home, cancel the contract, ditch the deals, rip up the rules–Just a few of the suggestions for slogans that could help unify the growing movement against the occupation of Iraq. That’s the opening sentence in Naomi Klein’s piece in the Guardian newspaper, the Guardian of London. She and close to 2,000 people were gathered in Madison, Wisconsin this weekend for a media reform conference. In a little while, we’ll go to Al Franken, who was also there, and throughout the week we’ll be playing excerpts of that conference, but right now to Naomi Klein on her piece "Iraq is not America’s to sell."

NAOMI KLEIN: I think the global anti-war movement is in the process of shifting gears into becoming an anti-occupation movement and we saw some large anti-occupation protests on October 25, and much of the debate has focused on whether the call should be to bring the US troops home or to replace–bring all the foreign troops home–or to replace them with international peacekeeping. I think that is an important debate, but I think that it’s missing a really important point, which is so that there is another front, to the attack on Iraq, to this war. And it is a front we’re not hearing about when we keep hearing that it is a mess, it is a disaster, it’s a quagmire, a morass, which is the economic front of the war on terror and the attack on Iraq.

And that side of the war is actually going very, very well. It’s going so well, in fact, that the economists called the new rules in Iraq a capitalist’s dream and described the rules that Paul Bremer, the chief US occupier in Iraq, as a wish list for foreign multinationals. This wish list, which was granted as part of the now infamous Orders 39, which was on September 19, was a transformation of the Iraqi economy, using basically traditional IMF structural adjustment policies, but in one fell swoop. So Orders 39 announced that, contrary to Iraq’s constitution, which places clear restrictions on foreign ownership of the Iraqi economy and deems essential services protected and not able to be privatized, these were just completely overthrown and 200 Iraqi state firms were put up for privatization and foreign firms were allow 100% ownership of those firms. In addition, they were also given, as part of this wish list, the ability to take 100% of their profits out of the country. So, all the rules that, you know, are the battleground of in terms of international trades were granted. In addition to this, a tax cut for the highest income earners was granted from 45%, which is the tax rate for corporations in Canada to 15% flat tax. So it was as wish list, a kind of capitalist dream to attract investment, to create investment opportunities. What has become clear is that these contracts are illegal. Now I think that four–I’ll come back to that.

But for the anti-occupation movement, it is important to understand that even if every troop were to come home tomorrow and a so-called sovereign Iraqi government were to come into power, Iraq would still be privatized. It would be privatized by these laws that were written by another country. It would be privatized by foreign companies that would be controlling their essential services. And it would be colonized by the fact that they have now 70% unemployment because of attacks on the public sector. That is cold logic and we–colonization and we need to have this economic exercise. It’s become very, very clear that we have a very strong weapon in our arsenal in terms of countering this economic occupation of Iraq and that is that this economic–this shock therapy, this structural adjustment of Iraq, that is the other side of the war, which is not a mess, but it is going very, very well–is completely illegal.

This is something that has been reported on in the business press because it is very much of interest to businesses thinking about taking advantage of this wish list. When the Security Council gave their stamp of approval by recognizing the US and Britain as the occupying power in Iraq, they stated very clearly that as occupiers, they needed to abide by the 1907 Hague regulations and the 1949 Geneva conventions, which govern the rules for an occupying force. What these regulations state very, very clearly is that an occupying power can change laws as it relates to security, but the Hague regulations state that unless absolutely prevented–that is a quote–unless "absolutely prevented", the occupying power must respect the laws in the country.

Now the Iraqi constitution explicitly bans this foreign ownership and the privatization of these essential services. So, what happened is that Bremer unilaterally overturned the Iraqi constitution, cannot make an argument he had to do it for security reasons because they’re openly saying that this is part of an economic program, not just for Iraq, but the whole region. This sort of bundling of free people and free markets. What is starting to happen is that international legal experts are coming forward, not from the left, but from international conservative law firms to say these contracts are extremely risky and they won’t be respected,

Particularly there is a woman named Juliette Blanchee, head of energy and international arbitration for the international law firm Norton-Rose, which is based in London, but has 19 offices around the world and employs 2,000 people, has blue chip clients like HSBC and even Texaco at certain points. This is a company that has brokered privatization, so they’re not coming from my political perspective, which is that I’m not ashamed to say that I think that privatizations are a bad idea. They broker privatizations, they represent both government and corporations and Juliette Blanchee has said to me in an interview that these contracts will not stand up in any court because they violate international law.

So what she said was that the only legal way out of this bind is the US has to get a regime in Iraq quickly to ratify the laws. That is the only way they can make them legal. And as further evidence that–that the US is trying to attract companies into a very legal gray area–not even a gray area, but into a really risky situation economically in Iraq, is that none of the big insurance firms, including the one that Paul Bremer used to work for, Marsh & McLennan, are willing to offer insurance to companies that want to go and take advantage of what the Wall Street Journal called the Iraq gold rush.

Because it’s just simply considered too risky not just on security grounds, but on the grounds that if the Iraqi people do get a sovereign government, and they decide that they don’t actually want their country to be a subsidiary of Halliburton or Bechtel, then they have a serious legal argument to make that these laws that were passed by Bremer were illegal to begin with and what they can do is change laws, but more than that, renationalize the assets that were privatized in this period of occupation. So, if you’re Bechtel and managed to secure the water contract or you’re Motorola and managed to secure the phone contract, these contracts can be overturned by a new Iraqi government. And these assets can be renationalized. And the companies that signed the contracts will not be able to sue in any kind of international court because, of course, by international law, the privatizations were illegal to begin with. That’s why their only recourse is to try to get really a puppet regime in power that will ratify. What’s interesting is there is enough resistance to this economic shock therapy, even among the Bremer appointed Iraqi council that it’s becoming increasingly unlikely that they will be able to do this. So what–what’s happening is that somebody needs to ensure these companies to go into a very risky situation so the US import-export bank is being presented–being put forward as the insurer of last resort, which means that the–that they would offer insurance to, say a Bechtel, to come in and privatize the water in Iraq. But then if a new Iraqi government then decides to renationalize that asset, it would be the US taxpayers, not Bechtel, that would be on the hook.

So the U.S. taxpayers not only pay with their $87 billion in terms of bankrolling this reconstruction boondoggle, but they will then have to potentially pay again when it becomes clear that these contracts were illegal to begin with.

AMY GOODMAN: Are there other countries that are going after the US for doing this in?

NAOMI KLEIN: Well, I think that it explains the silence of Germany, Russia, China–there are countries that are–what I think is actually happening, Amy, is that they’re hedging their bets because what they’re waiting to see is if–whether Bremer is going to respect the contracts that Saddam Hussein signed with Russian, Chinese and French companies.

My sense is that if they will respect it, and there have been noises being made that they’re not going to respect contracts signed by Saddam Hussein, and my feeling is that if they do go down that route, then you’ll start hearing a lot of noise from Russia, France, China, Germany, the countries whose companies were in there and had those deals.

Right now, I think what we’re seeing is actually some pretty heavy back room negotiating and I think the deal that’s being made, frankly, is if you respect the contracts that we signed with Saddam Hussein, and–which you could also make an argument were illegal–we will respect the contracts, your equally illegal contracts being signed by the occupational authority. I think the position of a genuine anti-occupation movement should be that neither should be respected, that any new free sovereign Iraqi government should not be saddled either with the debts and contracts of their dictator of their occupier.

AMY GOODMAN: And Bremer’s own insurance company wouldn’t insure?

NAOMI KLEIN: No. Bremer–you know, before Bremer had this gig, right before, he–after September 11, a very entrepreneurial guy–and you’ve done segments on this on Democracy Now!, he started a company selling political risk insurance and terrorism risk insurance. You know, he was saying that you are doing business in a risky country, it’s a risky climate, he’ll buy insurance to protect yourself against political risk and against terrorism. But even his own company will not assure–insure any company going into Iraq, which is why US taxpayers are actually selling them insurance, but they don’t realize it.

AMY GOODMAN: Naomi Klein, award-winning journalist, and her book "No Logo." Her piece appeared in The Guardian of London. "Iraq is not America’s to Sell."

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