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15/6/05 A Rape in the Making By Stephen Gowans

June 15, 2005

gowans.blogspot.com/

Under pressure from Washington, the Paris Club, a group of major capital exporting nations, agreed late last year to forgive 80 percent of Iraq’s debt, in return for Iraq yoking itself to the IMF. This was the largest debt write off by the Paris Club since it forgave two-thirds of Yugoslavia’s debt after the ouster of Slobodan Milosevic in 2000. [1]

US investment in Iraq had been prohibited by Washington’s anti-Iraq sanctions regime, so relieving Iraq of its debt obligations meant little in the way of stranded investment for the US. For France, Germany and Russia, however, which had investments in the country under Iraq’s previous government, the debt reduction pledge, had less appeal. All three countries resisted Washington’s plans, arguing correctly, though with the basest of motives, that the plan is unfair to other countries saddled with even larger debts that, unlike Iraq, aren’t blessed with an abundant supply of natural wealth out of which to pay down their mortgaged futures. [2]

Iraq’s undeniable attraction as a source of immense oil wealth lies at the heart of Washington’s debt relief plan, and equally undeniably is a large part of the reason Iraq was chosen as a target of US aggression. Asked why Iraq, which had no weapons of mass destruction, was invaded, while North Korea, which does (or claims to), escaped Iraq’s fate, Paul Wolfowitz, then US Secretary of Defense, pointed to Iraq’s oil wealth. “Let’s look at this simply. The most important difference between North Korea and Iraq is that economically we had no choice in Iraq. The country swims in a sea of oil.” [3, 4]  

Indeed it does. But without debt relief, the attractions of buying up Iraq’s oil wealth would be diminished, since a large part of the country’s oil revenue would be channeled into debt repayment, to parties outside the US, and not into dividends and interest on future US and British investment in Iraqi oil.

The same calculus has had a hand in defining the charges the US-sponsored war crimes tribunal will likely prefer against Saddam Hussein. “American officials have cautioned that widening the charges against Mr. Hussein to include the Iran-Iraq war would expose Iraq∑to demands for heavy war reparations from Iran.” [5] Heavy war reparations would burden Iraq’s oil revenues, in the same way unrelieved debt obligations to France, Germany and Russia would have funneled money to European concerns, reducing the attractiveness of Iraq’s prized oil wealth to American and British financiers and oil company shareholders.

Worst, Iraq’s oil wealth would be used to strengthen Iran, which jealously guards its independence from US domination and control. Were it to be richly supplied with capital from Iraq in the form of war reparation payments, it would be in a stronger position to resist US designs on its independence.

Accordingly, American officials, the true powers behind the tribunal [6], caution against widening the charges against the ousted president. Even the appearance of doing justice is to be circumscribed by the economic and financial interests of the conquering powers.

The Paris Club’s debt reduction deal obligates the new government in Baghdad to dismantle the largely publicly owned economy established under the previous government, and to junk the large scale system of social supports the former Ba’athist government put in place to furnish Iraqis with jobs and food subsidies out of revenue earned from oil sales. [7] Much as Saddam Hussein was reviled in the West, including by those who lay claim to anti-imperialist credentials, his government did pursue a course of independent development, that put some measure of emphasis on the domestic population.

The country, complains the Los Angeles Times and the present collaborationist government, was “a huge welfare state,” [8] that maintained a nationalized oil industry, built up a largely state-owned economy, and directed oil revenue to internal development, rather than wholly to Western financiers and oil companies.

But unless the insurgents drive the Americans out, and overthrow the Quislings in power, that will soon change. The country’s petroleum reserves are to be pressed into service to fatten the interest payments and dividends of absentee Anglo-American investors, not to provide Iraqis with a source of income, low cost gasoline and food staples at affordable prices.

Laith Kubba, a spokesman for Iraq’s Prime Minister, Ibrahim Jafari, says that Baghdad is preparing to honor the IMF’s demands to gut public spending. Subsidies for electricity and oil products will be slashed, [9] and 1.6 million jobs will be chopped from the public payroll, adding to the already Himalayan mountain of unemployed. Now at 30 percent, the jobless rate will be driven up to over one-half of the workforce [10], unless concern that the plan amounts to throwing fuel on the fire of an already raging insurgency forces the government to chart a more cautious course.

On top of 30 percent unemployment, nine million Iraqis, of a total population of 26 million, live below the poverty line [11] and 400,000 children under the age of five suffer from acute malnutrition, double the rate before the arrival of US and British occupation troops two years ago. [12] This is telling evidence, if any is needed, that the ouster of Saddam Hussein, and his replacement by Anglo-American forces and their puppet government of collaborators, hasn’t, as promised, procured a better life for Iraqis.

As to the IMF-directed plan to intensify Iraq’s collective misery, the justification lies in the imperialist orthodoxy that a dependent nation’s wealth must not be used to achieve public policy goals at home, including reducing economic insecurity by creating jobs, but must be shipped out of the country to embellish the bottom lines and balance sheets of the banks and transnational corporations of the conquering powers.

Saddam Hussein’s government affronted this orthodoxy by using oil revenues to increase the public payroll and reduce unemployment, a sin that must be atoned for, according to the priests of the IMF, by tossing the beneficiaries onto the heap of unemployed [13] and laying the groundwork for the future diversion of Iraqi oil revenues to the proper beneficiaries, the rentier class of the US, Britain, and their sub-imperialist satellites.

For those who say Anglo-American forces can’t leave now, for to do so would leave Iraq in a worst mess than before, the error of their thinking should be clear: The longer the occupation continues, the more miserable and more thoroughly exploited become the lives of Iraqis, and the more the occupation advances toward the achievement of its final goals.

1. New York Times, November, 2004.

2. Ibid.

3. The Guardian, June 4, 2003.

4. Of greater significance is the fact that Pyongyang, seeing that the previous Iraqi government’s compliance with the imperialist nations’ demands to disarm simply facilitated the invasion, has taken steps to build a nuclear deterrent. Indeed, the question, “Why did you invade Iraq, which had no weapons of mass destruction, and not North Korea, which did?” answers itself.

5. New York Times, June 6, 2005.

6. The tribunal was established by fiat of the US occupation government under L. Paul Bremer and has been guided by US lawyers since its inception. The US has provided more than $75M in funding. New York Times, June 6, 2005.

7. Los Angeles Times, June 6, 2005.

8. Ibid.

9. Ibid.

10. According to the Los Angeles Times, (June 6, 2005), the Iraqi labor force comprises 6,500,000 adults, of whom one-half, or 3,250,000, are employed by the state. The current rate of unemployment is 30 percent. By inference, the work force comprises: employed, 4,550,000 (70 percent); unemployed, 1,950,000 (30 percent); total, 6,500,000 (100 percent). Laith Kubba, the government’s spokesman, says that Iraqi ministries “can carry out their duties with only about 40 to 60 percent of [their] employees.” If we take the mid-point, 50 percent, then one-half of the 3,250,000 Iraqis employed by the state, or 1,625,000, will be laid off. In total 1,625,000 newly unemployed + 1,950,000 currently unemployed or 3,575,000 jobless, out of a total work force of 6,500,000, equals an unemployment rate of 55 percent.

11. Los Angeles Times, June 6, 2005.

12. Washington Post, November 21, 2004.

13. Los Angeles Times, June 6, 2005.

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