http://democracyrising.us/content/view/180/164/

Antonia Juhasz was the project director of the International Forum on Globalization in San Francisco until leaving just weeks ago to focus full-time on writing a book on the Bush Administration's economic invasion of Iraq and beyond.  She has written, spoken and organized for over ten years on the issues of corporate globalization, militarization and the war in Iraq. She received a 2003/2004 Project Censored Award for her article, "Ambitions of Empire: the Economic Invasion of Iraq," in LeftTurn Magazine.  Her work has been published around the world in outlets such as the New York Times, Washington Post, Cambridge University International Relations Journal and others.  Much of her work can be found at http://www.ifg.org/analysis/globalization/aboutglobal.htm.  She can be reached at antoniajuhasz@gmail.com.  The interview was conducted by Kevin Zeese.

DR:       Have U.S. corporations joined in the invasion of Iraq?  What industries are they taking over?

Juhasz: U.S. corporations have not only joined in the invasion of Iraq, they helped to arm Saddam Hussein and profited from his brutal regime; they lobbied for war against him when they felt that their profits were in danger; and they are now profiting from his ouster. Of the dozen or so U.S. companies that fit all or part of this description, there are four that I feel as the most important: San Francisco-based Bechtel, San Ramon, CA-based ChevronTexaco, Bathesda-based Lockheed Martin and Houston-based Halliburton.

For example, George Shultz, who served as President Reagan's secretary of state and it the former President of the Bechtel Corporation and current member of its Board, was chairman of the advisory board of the Committee for the Liberation of Iraq, a fiercely pro-war group with close ties to the White House. The Committee formed in 2002, and made clear from the start that it sought more than the ouster of Hussein's regime. It was committed, among other things, "to work beyond the liberation of Iraq to the reconstruction of its economy."  Prominent Committee members, including Shultz, influenced public opinion on behalf of war against Iraq through opinion pieces in the nation's leading newspapers, appearances of television talk shows and public speeches.   In addition, Bruce Jackson, a former Vice President of Lockheed Martin (the nation's largest defense contractor) was the founder and Chairman of the Committee for the Liberation of Iraq.

One month before the March 2003 invasion of Iraq, Bechtel was among a handful of corporations who were secretly invited to bid on the rebuilding effort by the Bush Administration.  Bechtel received one of the first post-war reconstruction contracts, ultimately becoming the second largest recipient of reconstruction dollars in Iraq, second only to Vice President Dick Cheney's Halliburton Corporation. 

Lockheed Martin, for its part, has profited mightily from the war. In 2004, the shares of Lockheed Martin have more than tripled since their low in early 2000.  Since the beginning of 2001, Lockheed Martin's sales have risen to $31.8 billion from $24 billion. 

ChevronTexaco has been marketing Iraqi oil for over ten years.  The war has been extremely profitable for them as well. In fact, 2004 was the most profitable year in the companies' 125-year history. 

Bechtel's contracts include the reconstruction of Iraq's over-all infrastructure, including water, electricity, sewage, roads, hospitals and schools.  There two contracts total just under $3 billion. 

Halliburton is providing services to U.S. troops in Iraq; rebuilding Iraqi oil infrastructure and other oil-related services.  Their contracts total between $8 and $11 billion depending upon who you ask.

Lockheed Martin is providing weapons to the military in addition to other technology-based services.

ChevronTexaco is marketing Iraqi oil and is poised to potentially enter the Iraqi oil market as a producer and even owner of Iraqi oil.

In addition to these companies, there are literally hundreds of U.S. corporations with contracts related to the war, occupation and "reconstruction" of Iraq.  They are involved in every imaginable industry: banking, telecom, media, government, agriculture, and other forms of industry.  The most comprehensive list of these companies is provided by the Center for Public Integrity on their web site: http://www.publicintegrity.org/wow/.

DR: What is theU.S.  plan for the Iraqi economy? When was it developed?

Juhasz: The U.S plans a radical reconstruction of the Iraq economy. BearingPoint, Inc. of McLean, VA, the recipient of a nearly $250 million contract to "facilitate" the complete economic reconstruction of Iraq said one month before the invasion of Iraq:
"It should be clearly understood that the efforts undertaken will be designed to establish the basic legal framework for a functioning market economy; taking appropriate advantage of the unique opportunity for rapid progress in this area presented by the current configuration of political circumstances... Reforms are envisioned in the areas of fiscal reform, financial sector reform, trade, legal and regulatory, and privatization." - Moving the Iraqi Economy from Recovery to Sustainable Growth, Statement of Work, BearingPoint, Inc. February 21, 2003.
These plans were ready at least one month prior to the invasion, while the contract was awarded on July 18, 2003. The analysis below is based on the draft Statement of Work made available to me in November and confirmed by a BearingPoint spokesperson to be "what we are working from now. Our current plan is unchanged." The full contract has since been made available on the Center for Public Integrity's website www.publicintegrity.org
If you want to know what the Bush Administration's ultimate plans are for Iraq (and potentially the entire region), you need look no further than BearingPoint's Plan. It lays out the full transition of Iraq from a state- to a market-controlled economy in just 18 months with privatization and international trade at its core. It includes every sector from public services, media, banking, investment, taxes, agriculture and, yes (to a limited degree), the oil sector - implementing "private-sector involvement in strategic sectors, including privatization, asset sales, concessions, leases and management contracts, especially those in the oil and supporting industries."
The Plan reads like a chicken-soup of the most extreme corporate globalization policies past and present, from the now roundly-rejected Structural Adjustment Programs of the World Bank/IMF, to the privatization of public services of the General Agreement on Trade in Services (GATS) and the rest of the WTO's trade policies, the investment rules of the IMF and the WTO, the "competitiveness methodology" of the World Economic Forum, to the creation of an Iraqi Business Roundtable. There is a particularly disturbing emphasis on export trade in the agricultural sector (focusing on luxury crops) given the intense opposition to these same policies at the most recent WTO and FTAA ministerials by those who have suffered under them for decades, including the protest-suicide of South Korean farmer Lee Kyung Hae.
What's the upshot of the BearingPoint Plan? Iraq's economy and all of its resources are ripped open to foreign control. The U.S. corporations whose executives participated in the drive for war and that have already reaped billions of dollars in post war profits and reconstruction contracts, could own every business, do all of the work and send all of their money home. Nothing need be reinvested in the Iraqi economy, no Iraqi need be hired, no public services need be guaranteed nor the rights of workers protected, and no resources need stay in the country.

Thomas Foley, director of Private Sector Development for the CPA, announced a list of the first state enterprises to be sold off (most likely derived by BearingPoint) which included cement and fertilizer plants, phosphate and sulfur mines, pharmaceutical factories, and the country's airline. Privatization was met with stiff resistance and threats of increased unrest at a time when the Bush Administration saw the election cycle getting into high gear. In response, Bremer was forced to put the privatization plans on the backburner for the time being. The long-term plans, however, are clear. BearingPoint, USAID and others both in or contracted by the U.S. government will implement the majority of the economic policies with the new Iraqi government.

Juhasz: One of the most disastrous mistakes committed by President Bush in the occupation of Iraq was rejecting proposals put forward from within his own Administration to implement a public works rebuilding effort.  Instead, U.S. companies were brought in to do the rebuilding and rather than hire Iraqis (who apparently they did not trust) they brought workers from other nations whom they had previously worked with and Americans.  In addition, the head of the U.S.-occupation government in Iraq, Paul Bremer, fired half a million Iraqis from the Iraqi military and 30,000 members of the Ba'ath party from the Iraqi government immediately upon arriving in Iraq.  The combined impact was an unemployment rate that some put as high as 70% and which currently hovers around 50% by some estimates. 

Today's news (March 15, 2005) included reports of raw sewage literally flowing through the streets of Baghdad because of recent rain storms.  According to the U.S. Agency for International Development (USAID) - the U.S. agency which oversees Bechtel's rebuilding contract, "water meant for consumption is pumped through the system largely untreated while raw waste flows untreated directly into city streets, rivers or marshlands. Many rural communities are not connected to main water or sewer lines, have no access to potable water and suffer from health problems related to poor sewage disposal." Furthermore, "Baghdad's three sewage treatment plants, which together comprise three-quarters of the nation's sewage treatment capacity, are inoperable, allowing the waste from 3.8 million people to flow untreated directly into the Tigris River... Water that is pumped through the system is largely untreated, especially in South."

The situation is equally poor in terms of electricity - with service still not even up to pre-war levels. 

Oil, gasoline, kerosene and the like are still in horribly low levels and impossibly expensive.  Halliburton, which received a no-bid contract for the rebuilding of the oil infrastructure, has been charged with over-billing by $100 million for its services - the U.S. Justice Department has an open civil-fraud inquiry into whether Halliburton overcharged for shipments of fuel from Kuwait into Iraq. 

Many people believe that the window has now closed for U.S. reconstruction efforts in Iraq.  Americans and those they employ are targets of the insurgency, as is the work they perform.  In addition, U.S. corporations are now afraid to operate in public and therefore many reconstruction efforts simply sit idle.  It is clearly time for Iraqis themselves to fully take-over the reconstruction process.


DR:      Did the Provisional Governing Authority issue rules that allow for corporate involvement in Iraq?


Juhasz: The U.S. occupation government of Iraq was named the "Coalition Provisional Authority," or CPA.  It was headed by L. Paul Bremer, III.  From May 16, 2003 to June 28, 2004, the day the CPA was dissolved and Bremer was allowed to hop on a plane back to the U.S. to begin a promotional book tour, he enacted exactly 100 Orders in Iraq. The Orders established new laws with full legal force over all Iraqis.  The Orders covered all aspects of Iraqi life - from the use of car horns to the privatization of state-owned industries.  I go into the Orders in great detail in many of my writings cited above, and they are a central feature to my upcoming book.  The Orders guarantee U.S. corporate access in several ways.  Here is a sample of some of the more destructive Orders:

Order No. 39 allows for: (1) privatization of Iraq's 200 state-owned enterprises; (2) 100% foreign ownership of Iraqi businesses; (3) "national treatment" — which means no preferences for local over foreign businesses; (4) unrestricted, tax-free remittance of all profits and other funds; and (5) 40-year ownership licenses.

Thus, it forbids Iraqis from receiving preference in the reconstruction while allowing foreign corporations — Halliburton and Bechtel, for example — to buy up Iraqi businesses, do all of the work and send all of their money home. They cannot be required to hire Iraqis or to reinvest their money in the Iraqi economy. They can take out their investments at any time and in any amount.

Orders No. 57 and No. 77 ensure the implementation of the orders by placing U.S.-appointed auditors and inspector generals in every government ministry, with five-year terms and with sweeping authority over contracts, programs, employees and regulations.

Order No. 17 grants foreign contractors, including private security firms, full immunity from Iraq's laws. Even if they, say, kill someone or cause an environmental disaster, the injured party cannot turn to the Iraqi legal system. Rather, the charges must be brought to U.S. courts.

Order No. 40 allows foreign banks to purchase up to 50% of Iraqi banks.

Order No. 49 drops the tax rate on corporations from a high of 40% to a flat 15%. The income tax rate is also capped at 15%.

Order No. 12 (renewed on Feb. 24) suspends "all tariffs, customs duties, import taxes, licensing fees and similar surcharges for goods entering or leaving Iraq." This led to an immediate and dramatic inflow of cheap foreign consumer products — devastating local producers and sellers who were thoroughly unprepared to meet the challenge of their mammoth global competitors.

There was one Hussein-era law that the U.S. Administrator decided to keep, that which bars public sector workers and those employed by public enterprises from joining or being represented by unions.

DR:      Are these rules still in force now that "sovereignty" has been handed back to Iraq?

Juhasz: Iraq has currently entered what is technically being referred to as the "transitional period."  The elections which took place on January 30 were for a transitional government which is to hold office only until a new constitution can be approved by the Iraqi people which will in turn initiate elections for a permanent Iraqi government.  According to the Transitional Administrative Law (the interim Iraqi constitution drafted by the U.S. government and the U.S.-appointed Iraqi Governing Council), the Bremer Orders remain in effect during the entire transitional period.  They can be overturned only by a majority vote of the National Assembly.  While technically feasible, such a vote is unlikely.  First, while the Bush Administration is not 100% satisfied with the outcome of the elections in Iraq, they have resulted in putting leaders with whom the Administration is at least experienced with working with and supportive of.  For example, the man most likely to become Prime Minster, Ibrahim al-Jaafari, served as a Deputy President under the Interim Iraqi Government and was a member of the Iraqi Governing Council.  Abdel Mahdi, the current Finance Minister of Iraq and the man who has most aggressively implemented the Bremer Orders since Bremer's departure, is expected to receive a ministerial level post.

It is also unlikely that there will be significant changes in the Bremer Orders because, while sovereignty has technically been transferred, the Bush Administration still occupies Iraq with 150,000 troops, it still maintains the largest pot of money in the country with the $24 billion in U.S. reconstruction funds; it maintains auditors and Inspector Generals in every ministry in Iraq with five-year terms; and there have been absolutely no indications by the elected national assembly that it will seek to end any of these arrangements any time soon.

DR:  How about the oil industry?  Many have described this as a war for oil.  Does the U.S. have control of the Iraq oil industry as a result of the invasion?

Juhasz: Not yet.  But that may change.  I have written an op ed on this topic for AlterNet which I recommend to your readers: http://alternet.org/waroniraq/21100/

As I mentioned above, Abdel Mahdi is the current Finance Minister of Iraq.  In December of last year he announced that Iraq was considering a new oil law that would open up Iraq's state-run oil industry to private foreign investment.  He specifically said that this would be "very good for U.S. companies."  ChevronTexaco, Exxon Mobil and other oil companies are already heavily involved in the Iraqi oil sector.  They are "training" Iraqi workers, "assisting" in the drafting of commercial laws to assist in the "opening" of the oil sector, and basically making themselves available.  They are also vying for contracts and ready to pounce.  As Chevron CEO Kenneth T. Derr said back in 1988: "Iraq possesses huge reserves of oil and gas — reserves I'd love Chevron to have access to."

DR: Can U.S. civilian contractors be prosecuted in Iraq?

Juhasz: No.  Order #17 cited above (and still in effect) gives all U.S. contractors operating in Iraq full immunity from prosecution. 

Juhasz: The Bush Administration can not be allowed to use an illegal and immoral military invasion to launch a subsequent - and potentially even more damaging - economic invasion.  U.S. corporations should not be making profits from the death of Americans, Iraqis, and people from all around the world dying in Iraq and dying as a direct result of the increased global insecurity and anger created by the Bush invasion.  To address this situation, the U.S. invasion must finally come to an end - both militarily and economically. 

However, this does not mean that we - the U.S. public - should abandon Iraq.  First, I believe that U.S. and coalition forces must be withdrawn from Iraq.  In their place, a United Nations peace-keeping force should be established as quickly as possible.  Secondly, the U.S. reconstruction funds must be increased and turned-over to a United Nations panel directed to spend the money only on reconstruction and only by Iraqis unless non-Iraqi work is required.  In this case, the fund should turn first to non-governmental organizations with a history of working in Iraq and only as a last resort to for-profit companies and then only with fully open and transparent bidding processes.  I do not think that this money should be handed directly to interim government of Iraq because I do not believe that the January 30 elections were legitimate. 

For example, the U.S.-based Carter Center, acknowledged as the world's authoritative agency on election monitoring, stated the day before elections took place that none of its key criteria for determining the legitimacy of elections had been met in Iraq. Those criteria include the ability of voters to vote in a free and secure environment, the ability of candidates to have access to voters for campaigning, a freely chosen and independent election commission, and voters able to vote without fear or intimidation. 

The goal of reconstruction must be the long-term economic strength of Iraq and its people, not the increased strength of the Bush Administration or American corporations.

I have written a list of additional prescriptions in an article for Left Turn magazine http://www.ifg.org/analysis/globalization/ambition.htm. In addition to leaving Iraq and turning over reconstruction to the UN and the Iraqis,  it is important that as belligerent powers who initiated the war, and as occupying powers, the U.S. and the UK are obligated to provide for the humanitarian needs of the Iraqi people and to pay the continuing costs of Iraq's reconstruction, including the bulk of the cost of UN humanitarian and peacekeeping deployments. Washington should reverse the spending priorities and turn over to full UN authority (on behalf of the Iraqi people as a whole) a starting grant of at least $75 billion (the initial amount Washington spent on waging the war) for reconstruction in Iraq.

The funds requested by the Bush administration for Iraqi reconstruction are insufficient to meet Washington's obligations under international law. The additional reconstruction funds should not come from ordinary taxpayers. They should be raised from (a) an excess profits tax on corporations benefiting from the war and post-war privatization in Iraq; and (b) the Pentagon budget lines currently directed at continuing war in Iraq.

Reconstruction of Iraq should be based on rebuilding the economy to maximize fulfilling the needs of the Iraqi people. All contract processes should be completely transparent and accessible to Iraqis. Contracts should privilege local companies, towards the goal of strengthening and diversifying local production. Labor laws should ensure protection for local workers.

Iraq should be allowed to join the worldwide movement for local sustainability by moving away from export oriented economics that make trade and multinational corporations the basis of economic development. Government spending, taxes, subsidies, tariff structures, etc. should be reoriented to support local environmentally sustainable production that meets local needs (these ideas are expanded upon in the IFG publication, Alternatives to Economic Globalization).