The US wants to privatise Iraq's oil

The US wants to privatise Iraq's oil


Jonathan Steele in Damascus
Monday March 31, 2003
The Guardian

In this highly politicised city where anger over the invasion of Iraq alternates with pride in the resistance, there is one sure way to lighten the mood. Suggest that George Bush and Tony Blair launched their war because of Saddam Hussein's suspected weapons of mass destruction. Hoots of derision all round. Whether they are Syrians or members of the huge Iraqi exile community, everyone here believes this is a war for oil. In nearby Jordan and across the Arab world the view is the same.
Some suggest a second motive - Washington's desire to strengthen Israel. Under one theory US hawks want to break Iraq into several statelets and then do the same with Saudi Arabia, to confirm the Zionist state as the region's superpower. Others cite Donald Rumsfeld's recent comments about Iran and Syria as proof that war on Iraq is designed to frighten its neighbours, who happen to be the leading radicals in the anti-Zionist camp.

Oil is the war aim on which all Arabs agree. While the Palestinian intifada is resistance to old-fashioned colonialism with its seizure and settlement of other people's land, they see the Iraqi intifada as popular defence against a more modern phenomenon. Washington does not need to settle Iraqi land, but it does want military bases and control of oil.

Many Arabs already define this neo-colonial war as a historic turning point which might have as profound an effect on the Arab psyche as September 11 did on Americans. Arabs have long been accustomed to seeing Israeli tanks running rampant. Now the puppet-master, arrogant and unashamed, has sent his helicopter gunships and armoured vehicles to Arab soil.

The US has mounted numerous coups in the Middle East to topple regimes in Egypt, Iran and Iraq itself. It has used crises, like the last Gulf war, to gain temporary bases and make them permanent. In Lebanon it once shelled an Arab capital and landed several hundred marines. But never before has it sent a vast army to change an Arab government. Even in Latin America, in two centuries of US hegemony, Washington has never dared to mount a full-scale invasion to overthrow a ruler in a major country. Its interventions in the Caribbean and Central America from 1898 to 1990 were against weak opponents in small states. Three years into the new millennium, the enormity of the shift and the impact of the spectacle on Arab television viewers cannot be over-estimated. Is it an image of the past or future, they ask, a one-off throw-back to Vietnam or a taste of things to come?

Blair sensed Arab suspicions about the fate of Iraq's oil when he persuaded Bush at their Azores summit to produce a "vision for Iraq" which pledged to protect its natural resources (they shrank from using the O word) as a "national asset of and for the Iraqi people". No neo-colonialism here.

Unfortunately, the small print is different, as could be expected from an administration run by oilmen. Leaks from the state department's "future of Iraq" office show Washington plans to privatise the Iraqi economy and particularly the state-owned national oil company. Experts on its energy panel want to start with "downstream" assets like retail petrol stations. This would be a quick way to gouge money from Iraqi consumers. Later they would privatise exploration and development.

Even if majority ownership were restricted to Iraqis, Russia's grim experience of energy privatisation shows how a new class of oil magnates quickly send their profits to offshore banks. If the interests of all Iraqis are to be protected, it would be better to keep state control and modify the UN oil-for-food programme, which has been a relatively efficient and internationally supervised way of channelling revenues to the country's poor.

Drop the controls on Iraq's imports of industrial goods. End the rule that all food under the programme has to be imported, thereby penalis ing Iraqi farmers and benefiting rich exporters in Canada, Australia and the US. But maintain the programme for several years to keep helping the 60% of Iraqis who depend on subsidised food (it will be more after this war) rather than channel revenues to a new Iraqi government or a World Bank-administered trust fund which will be under pressure to pay it to US construction companies to repair the infrastructure which Bush's war machine has destroyed. US and UK taxpayers should finance the peace as they have financed the war. Iraqi oil earnings must stay out of US and British hands.

If Downing Street has a better grasp than Washington of the need not to appear to be occupying Iraq, it was equally misinformed about Iraqis' views of invasion. Both governments confused hatred of Saddam with support for war. War has its own dynamic, trapping millions in the desperate business of daily survival. Naturally they blame US and British troops for the chaos. Yet, even before the first bomb fell, most Iraqis were against "liberation" by force.

People living under Saddam Hussein's rule do not give opinions easily but British and US officials should have done a better job of talking to Iraqis in Jordan and Syria who are in close touch with their families in Iraq.

On the eve of the war, I interviewed 20 Iraqis in Amman individually or in groups of two or three friends for an hour each on average. They included Sunni and Shia, property owners, artists, factory workers and several unemployed. Most were fierce critics of the Iraqi president. But on the over-riding issue of whether Bush should launch a war, a majority was opposed. Nine were against, four were torn and only seven were in favour. Now that war is no longer a theoretical option but a reality affecting every Iraqi at home and abroad, patriotic feelings are stronger.

Western governments apparently confined their research to people with a narrow vested interest. They financed exiled politicians who want a share in US-supplied power and then talked to them as though they were independent. They listened to businessmen eager to cash in when the US privatises the economy. They were fascinated by nostalgic Hashemite monarchists.

The voices of the poor and the professional classes were not deemed of interest, although these are the people who benefited from the surge in social investment from 1975-85 and later fell back under sanctions. London and Washington convinced themselves that Saddam Hussein had ruined the economy without asking whether Iraqis shared this view. If they now divert Iraq's oil revenues, they will be following a long tradition of blunder and exploitation.

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