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Eco-Economy: Iraq’s Oil Industry

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Iraq’s Oil Industry


By Lowell Manning
24th September, 2003

The United States of America, having invaded Iraq, is faced with a political quagmire and a commercial opportunity.

Recent efforts to enroll the United Nations to help pay the costs of the occupation and “reconstruction” are disingenuous.

Everything except for the oil industry is already up for grabs at fire sale prices. It’s the proposed WTO GATS revision and NAFTA all rolled into one except that US pro-consul Bremer and his unelected Council have a veto over every sale.

The veto ensures Iraq will be sold mainly to US firms, giving US permanent economic control of the country whatever the UN or EU want, think or say.

Money raised from the sales will go to offset US occupation costs, ostensibly to pay for “reconstruction” for which the US and UK are fully liable under international conventions.

Iraq’s main industry, OIL, which used to account for the bulk of the country’s foreign income, is not being sold. This has little if anything to do with the security of the oil infrastructure as news reports have claimed.

Energy is critical to maintaining US power. So one US strategy is to control the Iraq oil supply indefinitely. A pliant Iraq council/government is easier to manage than private profit seeking multinational oil companies.

Indirect US control of Iraqi oil is also a foil for Saudi Arabia and OPEC. Enough oil will be pumped from Iraq in the coming years to keep oil prices within the US comfort zone.

That way, the US will be able to manage world oil prices in its own interest rather than those of the Iraqi people.

There is, however, a second more sinister financial strategy.

Much of Iraq’s reconstruction will be financed from “AID”, in the form of loans rather than from grants. Since the “AID” will be coming from outside Iraq, the country will be put into long term debt.

JP Morgan has already been appointed to “manage” Iraq’s banking system. There will be no truly independent national banks or banking, and no Islamic banking system. Western foreign bankers will run Iraq’s banking system for western foreign interests.

Oil is the security for the loans, interest and reparations the US is planning to extract from Iraq, completing the economic rape begun by selling off its assets.

Iraqis will be paying many times over for the privilege of being invaded and occupied by the US and UK. They will eventually pay for all the reconstruction, and perhaps even for the costs of the war itself. On top of that they will pay interest on the "AID" debt forever.

The sales and AID therefore represent reparations far more severe than those applied to Germany at the Treaty of Versailles following World War I. Versailles led inexorably to World War II. The German reparations were so draconian as to be utterly urepayable.

If the US succeeds in its plan (as is likely) Iraq will remain impoverished for as long as the US remains the dominant power in the region.

On past experience, this is a recipe for instability and war, not peace.

Most frightening of all is the thought that that might just be the way the Bush administration wants it to be.

**********

- Lowell Manning Email: manning@kapiti.co.nz

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