It's the Oil, Stupid: U.S. policy for Iraq

To Iraq's government:

Politics of Iraq takes place in a framework of a more or less federal parliamentary representative democratic republic, whereby the Prime Minister of Iraq is the head of government, and of a pluriform multi-party system. Executive power is exercised by the government. Legislative power is vested in both the government and the National Assembly of Iraq. Politics of Iraq includes the social relations involving authority or power in Iraq. Before the fall of Saddam Hussein in 2003, the Ba'ath Party officially ruled. The occupation yielded to an interim Iraqi constitution, which was replaced by a permanent constitution following approval in a referendum held on October 15, 2005.

Birth pangs can be painful, and in some cases, deadly.

The economy:

As chief executive of Iraq, Paul Bremer issued a series of orders designed to restructure Iraq's broadly socialist economy in line with neo-liberal thinking. Order 39 laid out the framework for full privatization in Iraq, except for "primary extraction and initial processing" of oil, and permitted 100% foreign ownership of Iraqi assets. Other orders established a flat tax of 15% and permitted foreign corporations to repatriate all profits earned in Iraq. Opposition from senior Iraqi officials, together with the poor security situation, meant that Bremer's privatization plan was not implemented during his tenure, though his orders remain in place. Privatization of the oil industry, in addition to around 200 other state-owned businesses, was scheduled to begin sometime in late 2005, though it is opposed by the Federation of Oil Unions in Iraq.

One of the key economic challenges was Iraq's immense foreign debt, estimated at $125 billion. Although some of this debt was derived from normal export contracts that Iraq had failed to pay for, some was a result of military and financial support during Iraq's war with Iran. The Jubilee Iraq campaign argued that much of these debts were odious (illegitimate). However, as the concept of odious debt is not accepted, trying to deal with the debt on those terms would have embroiled Iraq in legal disputes for years. Iraq decided to deal with its debt more pragmatically and approached the Paris Club of official creditors.

I have nothing to add, but imagine what would happen in any other country if an army invaded, installed its own governing authority, privatized (a euphemism for donating it to multinational corporations), and allowed any economic pillager to repatriate every dollar back to their home country leaving no benefit to the locals except for possible slave wages. What would dubya do?

Tags: oil, Middle East, Corporations, U.S. Foreign Policy, Bush Administration, Iraq