Dohiyi Mir
    In Which NTodd Says His Peace

Thursday, July 10, 2003
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It's Not About the Oil

Michael Renner writes in a report for Foreign Policy In Focus regarding Iraq:

Less visible than the pedestrian plundering afflicting Iraq's cities and archeological treasures, another looting operation from on high is in the works: the Bush administration has been moving with great alacrity to take control of the major prize to be won in Iraq--strategic control over the country's considerable oil wealth.
[Security Council resolution 1483] lifts the sanctions imposed on Iraq in 1990 (with the exception of arms-related provisions) and gives the occupiers (dubbed "the Authority" in the resolution) sweeping powers. The Authority will have broad control over the Iraqi oil industry, principally by means of a Development Fund for Iraq, into which all of Iraq's oil export revenues, all funds left over from the UN's "oil for food" program, and all assets of the former Iraqi government located anywhere in the world are to be transferred.

The Authority is vested with the sole decisionmaking power over the use of these revenues (leaving a yet-to-be-created Iraqi interim administration with no more than "consultation" rights). The resolution bars any legal challenges by rival claimants to Iraq's oil revenues until December 2007. But since the initial draft of the resolution mentioned no time limit at all, the 2007 date was characterized as a "critical concession" by the United States

The initial draft empowered the Authority for one year, but specified an automatic extension "to continue thereafter as necessary, unless the UN Security Council decides otherwise"--meaning that the U.S. and Britain could have vetoed any effort to terminate their self-awarded mandate. The final resolution provides for a review by the Security Council after one year but still does not require an explicit reauthorization of the occupation regime. Without a timetable for establishing a legitimate government, the occupation--and control over Iraqi oil--is essentially open-ended.
The Wall Street Journal reported on May 1 that beginning in February 2003--well before the start of the war--the Bush administration had drafted "sweeping plans to remake Iraq's economy in the U.S. image." Detailed planning for such a makeover will apparently be left to a range of U.S. financial consulting firms (including BearingPoint, Booz Allen Hamilton, Deloitte Touche Tohmatsu, and PricewaterhouseCoopers).

The plan envisions asset sales, private concessions, leases, and management contracts across the Iraqi economy, including the oil industry. It foresees that the first year would be spent building consensus for privatization, to be followed by asset transfers over a three-year period. The Wall Street Journal article compares the program to what was done in Russia but does not mention the corruption, massive job loss, and gaping inequality that ensued during the Russian makeover.

FYI, S/RES 1483 is available at the UN website (sorry, can't provide a direct link to the PDF).

Selling assets, concessions and contracts. And Bremer is openly talking about privatization of the oil industry. So go ahead, tell me it's not about the oil.

The FPIF report concludes:

The upheaval following the overthrow of Saddam Hussein suggests that it's far from a foregone conclusion that the occupation regime will be able to govern Iraq and bend the country to Washington's designs. The privatization of Iraq's oil may yet derail, if the occupation regime finds itself unable to provide a sufficiently secure and stable investment environment. It would be an ironic outcome if the very triumph of Donald Rumsfeld's war doctrine--reliance on "smart" weapons and fewer soldiers to achieve victory--also meant that there simply weren't enough occupation forces to pacify Iraq.

Although the Bush administration was exceedingly well prepared in its drive toward war, it apparently has given far less thought to maintaining order in the conflict's aftermath.

Yes, far from a forgone conclusion. And there's that pesky problem of preparation again. BushCo focused like a laser beam on the oil and missed a few important details. But hey, it's all for the good of the company,


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A non-violent, counter-dominant, left-liberal, possibly charismatic, quasi anarcho-libertarian Quaker's take on politics, volleyball, and other esoterica.

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