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The endless looting of Iraq

Ghali Hassan, Online Journal Contributing Writer

December 14, 2005

"We reaffirm our commitment to protect Iraq's natural resources, as the patrimony of the people of Iraq, which should be used only for their benefit." --Joint statement by George Bush and Tony Blair, 08 April 2003.

Since the invasion and occupation of Iraq, Western corporate media have deceptively reported and portrayed the Occupation as a necessary vehicle to "spread democracy" and "fight terrorism"; however the carving up of Iraq's wealth and oil assets is deliberately avoided. The media hype over "reconstruction effort" and illegitimate elections is a cover up for the colonisation of Iraq and Iraq's economy. An "agreement" between British and U.S. oil corporations will see Iraq's oil revenues end up in the pockets of the invaders at the expense of the people of Iraq.

Executives from ExxonMobil, BP, Shell and Halliburton and Iraqi expatriate conmen, described in the West as Iraqi "technocrats," have reached a deal to carve-up Iraqi oil, despite opposition from Iraqi oil workers and union leaders. It is described as the "second phase of the war," in which the invaders will divide the cake between themselves as reward for their crimes of aggression. "The decisions on how to carve up Iraq are being made behind close doors in Washington and London and Baghdad," said Greg Muttitt, a scholar with PLATFORM, an independent environmental group. The deal made easy by the deliberate ongoing cycle of violence in Iraq and the media complicity in manipulating and diverting the public from important and morally significant issues, such as the criminal nature of the Occupation and its effects on the daily living conditions of Iraqis.

Following the U.S. invasion of Iraq, the Bush administration moved step by step for the final assault to colonise Iraq's economy. First, on 20 March 2003, George Bush issued his Executive Order 13290 to confiscate "certain property of the Government of Iraq and it agencies, instrumentalities, or controlled entities and that all right, title, and interest in any property so confiscated should vest in the [U.S.] Department of the Treasury." This allowed the Bush administration to immediately seize $1.7 billion in Iraqi funds. Second, in May 2003, Bush Executive Order 13303 indemnifies not only the corporate looters such as ExxonMobil and Halliburton from prosecution, but also provides protection to soldiers and private security guards committing crimes against Iraqis

Then, the Coalition Provisional Authority (CPA) headed by U.S. proconsul L. Paul Bremer, issued a series of edicts and created commissions in order to 'tighten the grip on Iraq's Future,' post 30 June 2004. The devious design of the U.S. was exposed in an article in the Wall Street Journal on 13 May 2004. Reporters Yochi Dreazen and Christopher Cooper wrote; "As Washington prepares to hand over power, U.S. administrator L. Paul Bremer and other officials are quietly building institutions that will give the U.S. powerful levers for influencing nearly every important decision the interim government will make. In a series of edicts issued earlier this spring, Mr. Bremer's Coalition Provisional Authority created new commissions that effectively take away virtually all of the powers once held by several ministries. . . . and put in place a pair of watchdog institutions that will serve as checks on individual ministries and allow for continued U.S. oversight." It was just a fake sovereignty designed for public consumption. It is the U.S. Embassy which took sovereignty, not the expatriate stooges.

As Bremer prepared for his unannounced hasty departure from Iraq in June 2004, the imperial proconsul imposed his '100 Orders' that were designed to transfer the Iraqi economy form a centrally planned economy to free market economy by U.S. fiat. The so-called Bremer's reform is similar to that imposed on nations strangled by the International Monetary Fund. In short, the Orders, though enacted illegally, have detrimental effects on the Iraqi economy. For example, Order 39 allows for the following: (1) privatization of Iraq's non-oil-related economy which dominated by 200 state-owned enterprises; (2) 100 percent foreign ownership of Iraqi businesses; (3) 'national treatment' of foreign firms; (4) unrestricted, tax-free remittance of all profits and other funds; and (5) 40-year ownership licenses. Thus, it allows the U.S. corporations operating in Iraq to own every business, do all of the work, and send all their money home. Nothing needs to be reinvested locally to service the Iraqi economy, no Iraqi need be hired, no public services need be guaranteed, and workers' rights can easily be ignored. Foreign corporations can withdraw their investments at any time. Order 81 is designed to reengineer Iraq's traditional agriculture system into a U.S.-style corporate agribusiness, and in the process enslave Iraqi farmers and undermine Iraq's food security. All these imposed by military means -- in contravention of the WTO regulations and international law -- and disguised as U.S. "reconstruction efforts" to rebuild Iraq.

The media nonetheless continue to propagate that the "reconstruction effort" of Iraq is the largest U.S.-led occupation program since the reconstruction of Europe after World War II, deliberately avoiding the fact that if the "reconstruction" of Iraq ever takes place it will be paid by the Iraqi people. U.S. $32 billion was promised for reconstruction, in loans and grants. Yet reparation payments for the 1991 U.S. war on Iraq continue, including large payments to Kuwait and U.S. corporations. Despite the large amount of money authorised by the U.S. Congress, there is zero reconstruction in Iraq today [1]. The U.S. is destroying Iraq on a daily basis and hampering Iraq's economic recovery for the sole purpose of selling Iraq's public assets and resources on the cheap to U.S. corporations, without consulting the Iraqi people. The billions of dollars in U.S. taxpayers' money is meant to fill the pockets of U.S. private corporations, not for the reconstruction of Iraq.

According to Ed Harriman; "by 28 June last year [2004], when [Paul] Bremer left Baghdad two days early to avoid possible attack on the way to the airport, his CPA had spent up to $20 billion of Iraqi money, compared to $300 million of US funds." The audits report (prepared by Congress, the Pentagon, the General Accountability Office, the International Advisory and Monitoring Board and the Special Inspector General for Iraq Reconstruction) "have also discovered that $8.8 billion that passed through the new Iraqi government ministries in Baghdad while Bremer was in charge is unaccounted for, with little prospect of finding out where it went. A further $3.4 billion earmarked by Congress for Iraqi development has since been siphoned off to finance 'security,'" added Harriman. [2] In its report on 23 October 2003, Christian Aid said: "The billions of dollars of oil money that has already been transferred to the U.S.-controlled [CPA] has effectively disappeared into financial black holes," the pockets of U.S. cronies.

Furthermore, Iraq oil is sold unmetered and more than $4 billion in oil export revenue was sold off illegally to U.S. cronies. "We do not know the exact quantity of oil we are exporting, we do not exactly know the prices we are selling it for, and we do not know where the oil revenue is going to," an Iraqi official in the Iraqi Oil Ministry told ISN Security Watch recently. This deliberately encouraged corruption, designed to undermine Iraq's future and contributes to lost potential oil revenue, is estimated to be $8 billion a year.

To justify the ongoing Occupation and looting of Iraq's wealth, the U.S. and the British government are deliberately orchestrating and increasing the violence against the Iraqi people. Through daily destruction of property and vital infrastructure, Iraq's broad economy has virtually collapsed and many factories and warehouses have been sacked and gutted. The U.S. had fallen short of restoring -- even minimal -- essential services such as electricity, potable water supplies, and sanitation to pre-war level. The health care services and the education system are ruined.

The daily indiscriminate and savage aerial and ground bombardments -- with chemical bombs, fire bombs (fuel-air bombs), napalm and other non-conventional weapons (WMD) -- of population centres have killed hundreds of thousands of innocent Iraqis; a deliberate mass murder. In addition, the U.S. and British governments are secretly sponsoring the killings of prominent Iraqi politicians, intellectuals, academics, religious leaders and trade union leaders, including leaders of the Oil Workers Union using U.S. and British-trained death squads and criminals. The aim is to incite civil strife and destroy the unity of Iraq to serve the U.S.-Zionist imperialist strategy.

As the violence continues unhindered, behind the scenes and without the participation of the Iraqi people, the Bush and Blair governments, and its puppet government are in the process of transferring Iraq's economy into a "free market" economy to serve U.S corporate interests. The long-awaited covert plan to transfer Iraq's oil assets to U.S. and British oil corporations is on the table. The production sharing agreements (PSAs) -- proposed by the U.S. State Department before the 2003 invasion and put aside to be implemented after the December 15 illegitimate elections -- Iraqis are set to lose control of their own economic and political fate.

Since Iraq has large unexplored oil reserves, of the best quality in the world and the cheapest to extract, the PSA model has no place in Iraq's oil industry. A new and detailed report, entitled 'Crude Designs: The rip-off of Iraq's oil wealth' by the London-based advocacy group PLATFORM, shows that the PSA model "is on course to be adopted in Iraq, soon after the December elections, with no public debate and at enormous potential cost." [3] Very few countries have signed the PSAs, and those who signed are regretting it today. Citing International Energy Agency figures, the report reveals that: "PSAs are only used in respect of about 12 percent of world oil reserves, in countries where oilfields are small (and often offshore), production costs are high, and exploration prospects are uncertain. None of these conditions applies to Iraq." It should be emphasised that the deals have been negotiated with Iraqi conmen and U.S.-British oil corporations, despite strong opposition by the Iraqi people.

The report shows clearly that the PSAs, if adopted, will put the Iraqi people on the road to permanent poverty. According to the report; "under PSAs future Iraqi governments would be prevented from changing tax rates or introducing stricter laws or regulations relating to labour standards, workplace safety, community relations, environment or other issues." At an oil price of $40 per barrel, Iraq stands to lose between $74 billion and $194 billion over the lifetime of the proposed contracts, from only the first 12 oilfields to be developed. These estimates, based on conservative assumptions, represent between two and seven times the current Iraqi government budget." The report added: "Under the likely terms of the contracts, oil company rates of return from investing in Iraq would range from 42 percent to 162 percent, far in excess of usual industry minimum target of around 12 percent return on investment."

According to Greg Muttitt, the lead author of the report, "For all the US administration's talk of creating a democracy in Iraq, in fact, their heavy pushing of PSAs stands to deprive Iraq of democratic control of its most important natural resource. I would even go further: the USA, Britain and the oil companies seem to be taking advantage of the weakness of Iraq's new institutions of government, and of the terrible violence in the country, by pushing Iraq to sign deals in this weak state, whose terms would last for decades. The chances of Iraq getting a good deal for its people in these circumstances are minimal; the prospect of mega-profitable deals for multinational oil companies is fairly assured," by the illegitimate actions of a puppet government subservient to imperialist powers.

It was revealed recently (Washington Post) that the big multinational oil companies have 'participated' in the 2001 energy task force headed by Vice President Cheney to plan for the U.S. invasion of Iraq. In 1999, Cheney as the CEO of Halliburton told a gathering in London: "the Middle East with two-thirds of the world's oil and the lowest cost is still where the prize ultimately lies." Cheney may achieve his ultimate goal with extreme violence against the people of Iraq.

As the Iraqi people are held hostages by U.S. forces -- without the prospect of being freed soon -- and their livelihoods are being destroyed, they have no way of knowing how much of their nation's wealth is being looted to fill the pockets of U.S. and British oil corporations and their cronies. There is an urgent need for meaningful accountability and transparency. The PSAs deal is not in the interests of the Iraqi people. It is reminiscent to the 'concession system' imposed on the Middle East during colonisation. It will devastate Iraq's economy and increase the suffering. Therefore, the U.S.-Britain orchestrated PSAs to carve up Iraq's oil revenues should be resisted and all efforts should be made to end the suffering of the Iraqi people imposed by the Occupation.

Instead of looting Iraq's wealth, the U.S. and British governments should pay reparations to the Iraqi people for waging an unjust war of aggression that has needlessly caused the deaths of hundreds of thousands of innocent Iraqis. The best deal the U.S. should negotiate with the Iraqi people is the full and immediate withdrawal of U.S. forces from Iraq, the decolonisation of Iraq's economy, and the return of Iraqi assets.


[1] Naomi Klein, Baghdad Zero, Harper's Magazine: September, 2004.

[2] Ed Harriman, Where has all the money gone? London Review of Books, Vol. 27(13), July 2005.

[3] Greg Muttitt, Crude Designs: The rip-off of Iraq's oil wealth, PLATFORM, November 2005. It is recommended reading.

Ghali Hassan lives in Perth, Western Australia.

Copyright ę 1998-2005 Online Journal

:: Article nr. 18697 sent on 14-dec-2005 13:11 ECT


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