Selling Off Iraq

| Thu Sep. 1, 2005 2:26 PM EDT

Herbert Docena has an interesting piece in the Asia Times, looking at how the United States worked behind the scenes to shape Iraq's draft constitution into the neo-liberal document that it is today; one that, in particular, all but requires Iraq to enforce the laws enacted under the CPA that "give foreign investors equal rights with Iraqis in the domestic market; permit the full repatriation of profits; institute the flat tax system; abolish tariffs; enforce a strict intellectual property rights regime; sell off a whole-range of state-owned companies; reduce food and fuel subsidies; and privatize all kinds of social services..." (Indeed, looking at the various drafts side by side, Ambassador Zalmay Khalilzad managed to catch and strip out an article from an early version that read, "Social justice is the basis of building the society..." The Iraqi drafters, however, seem to have defeated Khalilzad's efforts to limit universal health care.)

Now I've been told before that this old Heritage Foundation paper, entitled "The Road to Economic Prosperity in a Post-Saddam Iraq," garnered a lot of attention in Washington back in the day, and looking through it again, it seems to have formed the basis for Khalilzad's attempts to shape the new constitution. Whether Iraq actually becomes a neoliberal state is another matter—certainly there are many religious leaders who condone no such thing. On the merits, it's pretty obvious that the Arab Socialist model has failed throughout the Middle East—in Egypt and Syria for instance—for a variety of reasons related to corruption and inefficiency. Still, it's possible to go too far in the other direction, and judging by its union-busting efforts of late, the new Iraqi government seems inclined to do just that. Dangerously, though, the inequality that comes with any move to open things up and privatize away will probably mean that there will be a lot of economically marginalized Iraqis who have nothing better to do but start shooting and blowing up stuff for many years to come. On the bright side, foreign oil companies are now free to start buying up assets...