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Recent
Stories
May
23, 2003
Standard
Schaefer
Lifting the Sanctions: Who Benefits?
Ron
Jacobs
Long Live People's Park!
Michael
Greger, MD
Return of Mad Cow: US Beef Supply
at Risk
Sam
Hamod
The Shi'a of Iraq
Christopher
Greeder
After the Layoffs
Steve Perry
Bush's Wars Weblog 5/23
May
22, 2003
Mark
Gaffney
Christian in Name Only
Carl
Estabrook
Republic of Fear
Carl
Camacho, Jr.
Reason for Hope
Ben
Granby
What Rates a Headline from the Middle
East?
Vanessa
Jones
Terror Alerts in Australia
Mickey
Z.
Instant Understanding
Don
Monkerud
Snowballs in a Soggy Economy
Barry Lando
The Nether-Nether World of G.W. Bush
Steve
Perry
Total Information
Awareness: Secret Shadow Program?
May
21, 2003
Dave
Lindorff
Ari Fleischer Quits the Scene: The
Liar's Gone, the Enablers Remain
Chris
Floyd
How Blood Money Becomes Business Opportunity
Dr. Gerry
Lower
Graham's God and Bush's Pathology
Patrick
Cockburn
In Post War Iraq, the Signs of Breakdown
are Everywhere
Brian Cloughley
The Fatuous Braintrust: Newt, Rummy and Wolfowitz
Saul
Landau
Shopping, the End of the World and the Politics of Bush
Larry Kearney
Two Morning Poems, May 2003
Steve
Perry
Chaos in Iraq: Just What the US Wanted?
Elaine
Cassel
Ashcroft Justice Comes to Iraq
May
20, 2003
Tariq
Ali
The Empire Advances
Ahmad
Faruqui
Whither American Nationalism?
Ben Tripp
Dialysis with Osama
Linda
Heard
The Cage of Occupation
Cynthia
McKinney
Toward a Just and Peaceful World
Edward
Said
The Arab Condition
Mokhiber
and Weissman
Why Ari Should Have Resigned in Protest Long Ago
Stew
Albert
Yale Men
Steve Perry
The New Face of Al-Qaeda
May
19, 2003
Veteran
Intelligence Professionals for Sanity
A Letter to Kofi Annan on Powell's Missing
Evidence
CounterPunch
Wire
"Terror" Slut Steve Emerson
Eats Crow
John
Chuckman
Blair's Awkward Lies
Matt
Vidal
Corporate Media and the Myth of the Free Market
Michael
S. Ladah
The Fine Print to Bush's Road Map
Robert
Fisk
Bush's Eternal War Backfires
Elaine
Cassel
Clarence Thomas, Still Whining After All These Years
Jonathan
Freedland
Ann Coulter's Appalling Magic
Steve Perry
Play It Again, O-Sam-a
May
17 / 18, 2003
Uri
Avnery
The Children's Teeth
Peter
Linebaugh
An American Tribute to Christopher
Hill
Gary
Leupp
Nepal Today
Rock and
Rap Confidential
The Republican Plot Against the Dixie Chicks
Walter
Sommerfeld
Plundering Baghdad's Museums
Ron Jacobs
Condy Rice's Yipping Tirades
Thomas
P. Healy
Dubya Does Indy
Tarif Abboushi
Bush, Sharon and the Roadmap
Francis
Boyle
Debating US War Crimes in Iraq
Mark Davis
An Interview with Richard Butler
Richard
Lichtman
American Mourning
Michael
Ortiz Hill
Overcoming Terrorism
Adam
Engel
Uncle Sam is YOU!
Alan Maas
The Best News Show on TV
Poets'
Basement
Reiss, Guthrie, Albert
Elaine
Cassel
Good Enough for an Alien
Website
of the Weekend
The 37 Americans Who Run Iraq
Song of
the Weekend
Talkin' Sounds Just Like Joe McCarthy Blues
May
16, 2003
Leah
Wells
In Iraq Water and Oil Do Mix
Ben Tripp
Fear Itself
Sharon
Smith
The Resegregation of US Schools
Ramzy Baroud
Does Defeat Have to be So Humiliating?
Sam
Hamod
A Nation of Fear
Phil Reeves
Baghdad Pays the Price
Robert
McChesney
The FCC's Big Grab
Mark Engler
Those Who Don't Count
Steve
Perry
We're All
Extras in Bush's Movie
Website
of the Day
Iraq and Our
Energy Future
May
15, 2003
Ayesha
Iman and Sindi Medar-Gould
How
Not to Help Amina Lawal: The Hidden Dangers of Letter
Writing Campaigns
Julie
Hilden
Moussaoui and the Camp X-Ray Detainees:
Can He Get a Fair Trial?
Tanya
Reinhart
Bush's Roadmap: a Ticket to Failure
Laura Carlsen
Here We Go Again: NAFTA Plus or Minus?
Kenneth
Rapoza
The New Fakers: State Dept. Undercuts
New Yorker's Goldberg
Stew Albert
A Story I Will Tell
Steve
Perry
Bush's Little
Nukes
Website
of the Day
Strip-o-Rama
May
14, 2003
Cindy
Corrie
A Mother's Day Talk: the Daughter
I Can't Hear From
Jason
Leopold
The Pentagon and Hallburton: a Secret
November Deal for Iraq's Oil
David
Lindorff
Fighting the Patriot Act: Now It's
Alaska
John
Chuckman
Giggling into Chaos
Jack
McCarthy
Twin Towers of Journalism: Racism
and Double Standards
Wayne
Madsen
Assassinating JFK Again
M.
Junaid Alam
The Longer View
Paul
de Rooij
The New Hydra's Head:
Propagandists and the Selling of the US/Iraq War
James
Reiss
What? Me Worry?
Steve Perry
More on Saudi Arabia Bombings
Website
of the Day
A Tribute to Ted Joans
May
13, 2003
Saul
Landau
Clear Channel Fogs the Airwaves
Michael
Neumann
Has Islam Failed? Not by Western
Standards
Uri
Avnery
My Meeting with Arafat
Steve Perry
The Saudi Arabia Bombing
Jacob
Levich
Democracy Comes to Iraq: Kick Their Ass and Grab Their Gas
William
Lind
The Hippo and the Mongoose: a Question of Military Theory
The
Black Commentator
Fraud at the Times: Blaming Blacks for White Folks' Mistakes
Stew Albert
Asylum
Hammond
Guthrie
An Illogical Reign
Website
of the Day
Sy Hersh: War and Intelligence
May
12, 2003
Chris
Floyd
Bush, Bin Laden, Bechtel, and Baghdad
Dave
Lindorff
America's Dirty Bombs
Sam
Hamod and Elaine Cassel
Resisting the Bush Administration's War on Liberty
Uzi
Benziman
Sharon and Sons, Inc.
Jason
Leopold
The Decline and Fall of Thomas White
Rich Procter
George Jumps the Shark
Federico
Moscogiuri
Going to Israel? Sign or Else
Steve
Perry
Bush's War Web Log 5/12
Book
of the Day
Fooling
Marty Peretz
Website
of the Day
T-Shirts to Protest In
Hot Stories
Cindy
Corrie
A Mother's Day Talk: the Daughter
I Can't Hear From
Elaine
Cassel
Civil Liberties
Watch
Michel
Guerrin
Embedded Photographer Says: "I
Saw Marines Kill Civilians"
Uzma
Aslam Khan
The Unbearably Grim Aftermath of War:
What America Says Does Not Go
Paul de Rooij
Arrogant
Propaganda
Gore Vidal
The
Erosion of the American Dream
Francis Boyle
Impeach
Bush: A Draft Resolution
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for More Stories.
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May
23, 2003
Who Benefits?
Lifting the
Sanctions on Iraq
By STANDARD SCHAEFER
U.S. Ambassador John D. Negroponte called the
lifting of sanctions "the turning point of a historical
page that should brighten the future of a people and a region."
It simply will not do so. Thirteen years of sanctions has drastically
altered the fundamental nature of Iraq's economy; history has
shown repeatedly that the infrastructure of economic warfare
always outlives the war itself. To distract attention from this
fact, representatives to the UN from the United States continued
to chastise Saddam Hussein for diverting money from the "oil
for food program" to his personal bank accounts.
No doubt Hussein is guilty, but this
is really beside the point. The United States, with its long
history of love-hate relationships with dictators, should know
by now that dictators welcome sanctions and embargos.
Sanctions allow dictators to blame the
world, often rightfully, for their domestic problems. By portraying
the country as under attack, they are able to reduce internal
dissent. In response to sanctions, dictators are often relieved
of the duty of serious social spending and can justify to its
citizen's the increase in military spending.
The longer the sanction, the more porous.
Black markets are created and with them a vast criminal underground
infrastructure to support them. This particular lesson was made
quite clear during the US embargo of Iran which did not stop
weapons from reaching the Ayatollah, but succeeded in allowing
France to gain a new customer. Furthermore, the embargo drove
up the prices for black market weapons, which again did not make
them prohibitively expensive, but instead contributed to the
rise of smuggling and arms running. The profits of this smuggling,
however, could not go into the Iraqi economy now any more than
the black market profits in Iran could then. There is little
to consume there and few legitimate ways to earn a decent return.
Instead, smugglers resorted then and continue to resort now to
the illicit economy of off-shore banks where privacy laws protect
the smugglers and help enable the money to be laundered. Laundered
money doesn't stay home. It rarely pays taxes. It has a strange
purity. It can show up in other places, often as weapons, and
its new owners are hard to identify until far too late.
The banking networks of criminals and
financiers (here, as is often the case, quite indistinguishable)
overlap with legitimate banks and create enormous headaches for
intelligence agencies. The whole purpose of such things is, of
course, to obscure any trail, but without this black market it
would have been much easier to keep tabs on Hussein's official
and personal expenditures. It would, therefore, have improved
intelligence on his alleged arsenal.
Not incidentally, on the day before the
lifting of these sanctions, it was reported that the U.S. Department
of Defense had another intelligence difficulty. It has admitted
that it cannot keep tabs on its own military expenditures. Over
a trillion dollars is missing from the military budget and it
cannot be explained. Could this be the result of some kind of
underworld involvement? After what has been learned recently
about Halliburton's bribes in Niger and Bechtel's years of overcharging
of the Saudi regime for unnecessary construction projects, it
is not an unreasonable assumption. But as is often the case with
the Bush administration, hypocrisy is the least of the problems.
More serious is how the sanctions in
Iraq, now that they are lifted, will create a fresh round of
legal looting. Smugglers will simply become legitimate mercantilists.
They will now have a larger customer base than previously when
they could only deal with the Hussein regime. Now they will be
free to move goods in both directions and their buying power,
larger after the huge profits from busting the embargoes, will
only improve their volume and allow them other efficiencies.
They may have to pay taxes, but these may well be less than the
pay-offs and bribes under the sanctions. They will buy whatever
few goods the Iraqi people produce and sell them abroad rather
than to their fellow Iraqis who could not likely afford the middle
man's mark up. This means that the profits from Iraqi products
will continue to flow out of Iraq, not back into the domestic
economy.
The answer is increased foreign investment
in Iraq, according to the free-market fundamentalists behind
the Bush administration's policies. This is what is at stake
in Bush's proposed free-trade plan for the region, no protection
for what little of Iraq's industries still exist. The big idea,
or the alleged idea, is that opening the door for foreign investment
will allow this undeveloped nation to skip ahead, to acquire
the latest technology, and so forth. There is no evidence, however,
that a free-trade zone increases foreign investment throughout
a country, only in small pockets, and then only in industries
that require technology to extract natural resources. A statement
today by John Negroponte, the U.S. ambassador to the U.N., suggests
that: "It is time for the Iraqi people to benefit from their
natural resources."
The US is not serious about siring a
real modern industrial economy in this region. It is unlikely
the billions in oil revenue that Iraq will produce right now
will be used to buy capital equipment or build factories or do
anything that will make for a sustainable economy. Where does
Negroponte say this money will go to? Rebuilding the infrastructure.
And who is doing that? Bechtel. Halliburton. So this money, too,
will not remain in Iraq.
One is forced to decide whether Powell
and Negroponte are being disingenuous when they hype this deal
or whether they are simply oblivious to the economic underpinnings
of market capitalism. But how can they be oblivious to the fact
that the agreement they negotiated still binds Iraq to pay down
its $400 billion in debt, a debt taken on during Hussein's rule.
How can it be that Hussein lost his illegitimacy, but that his
debts remain legitimate?
On this point, George Soros, philanthropist
and convicted inside trader, makes more sense than the Bush administration.
Soros rightly argues that these debts should be forgiven because
doing so would send a message to the financial world that there
are risks to supporting dictatorships.
Not canceling these debts is not only
an exploitative, imperial policy, but also validates the whole
network of off-shore banking, foreign subsidiaries, and corporate
intermediaries that US and European financial institutions use
to get around the sanctions and embargoes imposed by their governments.
It must be pointed out that the IMF and
the World Bank both have a seat on the advisory committee overseeing
all of this. For them, "building infrastructure" means
renovating ports, pipelines, etc. These things are designed to
get the natural resources out of the country.
What will then happen is what happened
in Latin America. Trade volume will improve, but the profits
will go to transport companies, the industries devoted to exporting
natural resources (former and current smugglers. Little investment
will be made in businesses that provide basic goods so these
were imported from abroad, furthering their dependence on US
and European imports. No money will go into programs that would
redistribute the arable land or modernize the once robust agricultural
industry of the region, although, here and there some new farm
equipment will appear, just as it did under the failed "oil
for food". The remaining agricultural industry will be undercut
by US grain subsidies (long a standard practice of the IMF) and
it will draw people away from rural areas into the cities. There
will not be enough industry in urban areas to employ the migrants.
The urban centers themselves will not have had their infrastructure
rebuilt. No money, for example, will go to fix the crumbling
school system. This will guarantee that these workers will not
be of much use to either Iraq or Halliburton. And the Iraqis
will not be able to afford whatever few goods can be produced
domestically. These will be exported and consumed abroad. So
the standard of living will not improve.
The money from these exports will remain
modest, just enough to cover expenses but not enough to encourage
expanded manufacturing. So no new textile mills, no new Iraqi
pharmaceutical plants will be built. The considerable income
from oil will go to pay debt. That money gone, US banks will
be asked make loans to the Iraqi government, but that money will
have to go to pay for imports of basic materials, not to build
industry. Essentially, they will borrow to consume and be forced
to sell, say, the Tigris and Euphrates themselves. Perhaps, then,
as this cycle continues, leftist governments will appear, again
just as they have in South America. And, as with those, the US
will attempt to undermine them. The vicious circle. Though, of
course, some will argue that when Halliburton and Bechtel arrive,
they will spend money in Iraq and that they may even hire a few
Iraqis on the cheap. The old trickle down theory once again.
But what perhaps do they do when this worn-out platitude turns
perilous again? Cut the dividend tax? Bring back the Shah?
One thing is certain: it is not a time
to celebrate. It is a time to change the way underdeveloped nations
are treated. As much debt as possible should be forgiven. Not
all. Russia, for example, is owed $4 billion and needs it to
pay its debts. France, who certainly the US does not mind slighting,
should as Soros says, lose their investment, as should Citibank
and all the US corporations who used fronts and intermediaries
to get around sanctions. Companies like RJ Reynolds, who illegally
sold billions of dollars of cigarettes in Iraq through intermediaries,
should be tried for tax evasion, if not treason, and forced to
pay a huge fine, equal to at least the amount of lost tax revenue.
This money could go to the UN fund for Iraq. The UN should help
guide the Iraqi economy toward a post-oil economy and set up
a tariff regulation advisory board to protect fledgling Iraqi
industries such as agriculture. Money spent to build infrastructure
should not only to restoring airports and harbors, but to schools
and educational equipment, to building Iraqi state-owned pharmaceutical
factories, to modernizing existing equipment. Land reform will
be needed. Everything should be done to keep the mercantile class
(former smugglers) from repatriating their money abroad. This
may well involve a little wealth redistribution.
Standard Schaefer is an independent economic journalist in Los
Angeles. He can be reached at ssschaefer@earthlink.net.
Today's
Features
Mark
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Christian in Name Only
Carl
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Republic of Fear
Carl
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Reason for Hope
Ben
Granby
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Terror Alerts in Australia
Mickey
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Instant Understanding
Don
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