So? Re: Iraq battling more than 200,000 insurgents: intelligence chief

[lo yeeOn]

In article <lbgkt0p7dc6ud0hk5...@4ax.com>,
DB <rlburger@nospam_wisc.edu> wrote:
>On Mon, 03 Jan 2005 11:07:48 -0800, WesM...@address.invalid wrote:
>>In his opinion:
>>The Shite community expects to elect a government who's first order of business
>>is to work a truce with the Sunni's and ask the US to withdraw immediately from
>>Iraq.
>
>Great! I pray that this is true.
>
>>Shiite militia's have been quietly arming themselves to the teeth with far more
>>advanced long range weapons than RPGs.
>>He heard rumors of hundreds of Chinese shoulder fired surface to air missiles
>>have been bought and smuggled into Iraq and Iraqis have trained with Iranian
>>troops in their use.
>>The belief is without close air support the US ground forces don't stand a
>>chance.
>
>The elected government need not fight U.S. ground forces. They will
>leave if asked, the U.S. government has already made this pledge
>publicly, and would lose all domestic and international support if
>they reneged.
>
>Which Sunni's will the Shia government work out a truce with? Leaders
>of the insurgency who are able and willing to end the war?
>Impressive.
>I would think that the insurgents have more issues than the U.S.
>presence. In fact, it's logical that they wish to take, not share
>power. But perhaps your friend the math professor is right, perhaps
>the insurgents are prepared to cooperate with the elected government.
>
>Well, thanks for your optimistic report on the future of Iraq. Sounds
>like all may be sweetness and light before summer.

I think this math professor and his Shiite sources in Iraq are overly
optimistic about their ability to control the events.

The Shiite Iraqis may very well win by the sheer logic of numbers; but
then the so-called non-sectarian Shiite politician by the name of Iyad
Allawi may yet be the person to ultimately emerge as the PM as he now
is. (He has in fact been described in newspapers as the front runner
for the reasons I describe below.)

Ostensibly he will be the logical compromise choice for the most
powerful position in the government, the Prime Ministership, as one of
the many different Shiite Iraqis who will win the votes. He will be
the choice ostensibly because the rest aren't as ``well known'' or
``experienced'' as he is. (And that's why there has been the need for
an interim government, the players of which were chosen rather than
elected.) Negroponte and his 3000-person staff in Baghdad aren't
there for nothing. They are working to make sure there is a ``Hamid
Karzai'' for Iraq. A day or so ago, Ahmed Chalabi, remember Chalabi?,
has said something to the effect that while no Iraqis would want an
occupation force around, the government might not ask it to leave
either.

Therefore, if the Prime Minister won't act, what can the rest do?

The PM is always heavily protected (directly or indirectly by our
forces), just like Karzai is in Afghanistan. If you try to oppose
him, you'd be arrested. The PM will be the only one to have the
backing of our government, in the event there is a conflict between
him and the rest, for as long as he remains our choice for the post.
(If not, he would be removed one way or another.) Remember, every air
strike they've had in Iraq since former appointed emperor Bremer left
was ostensibly the order of the PM, even though it may very well have
been an accomplished act before the PM had a chance to scrawl his name
on a piece of paper.

And that's why it's so important for Bush (and Joseph Lieberman and
other neocon politicians in Washington) to see the election go forth
(and do so as soon as possible): To allow to take effect all those
decrees and orders that former appointed emperor Bremer quietly signed
to let foreign corporations to liquidate Iraqi national assets (see
Naomi Klein's Baghdad Year Zero on Harpers) and to legitimize our
continuing military presence (occupation).

So, I have grave doubts about the assessments made by people who think
they will have all the power they want even though they have yet to
taste any, that every Shiite Muslim think and act in unison, and that
Allawi and the like who will be our puppets will pay more attention to
them than to us, or rather his puppeteer Negroponte. Sorry, it does
not make sense. It will always be Master Negroponte's Puppet Show all
the wayyyyyyyy, allawi or no!

lo yeeOn
========

1) Emperor Bremer's decrees:

FreedomAlways wrote:
> On Fri, 19 Nov 2004 23:30:22 -0000, "Steve Walker"
> <spam...@beeb.net> wrote:
>> FreedomAlways wrote:
>>> As I made clear, I can't respond until you tell me specifically
>>> what law is being referred to so I can read the actual law
>>> instead of some other persons brief interpretation of it.
>>
>> www.iraqcoalition.org/regulations/20040426_CPAORD_81_Patents_Law.pdf
>>
>> I look forward to your attempts at rebuttal....

> If the Iraqi farmers don't want to follow the law that protects
> the breeders of cutting edge crops, then they can buy some
> standard seed and do what they wish with it.

Erm.... No, they cannot. That's the whole point here, and it's evidently
gone right over your head. Stop wasting my time with playground abuse, and
I'll try to explain it a bit more simply for you -

1 - Standard seed in Iraq is a mixture of native varieties, imported aid
seed (which may have been purchased from western patented varieties), and
GMO varieties. By the natural process of cross-pollinisation &
hybridisation, these crops inevitably intermingle.

2 - Bremer's law means that any crop which can be identified as carrying
traces of a patented variety becomes subject to IP licencing, regardless of
the farmer's actions or intentions.

3 - There is already evidence that the IP Corporations are prepared to
exploit this an an opportunity to levy taxes upon any crop, and to sieze the
farmer's land & assets in default of licencing payments (see
www.percyschmeiser.com )

If you don't see any problem with this, then you have no claim to be a
champion of freedom.

2) More on Emperor Bremer's decrees:

BAGHDAD - YEAR ZERO by Naomi Klein

Forwarded message from mode...@portside.org

[ Subject: Baghdad: Year Zero by Naomi Klein (long piece)
[ From: mode...@portside.org
[ Date: Wed, 29 Sep 2004

Baghdad: Year Zero

By Naomi Klein
Harpers
September 24, 2004

http://harpers.org/BaghdadYearZero.html

It was only after I had been in Baghdad for a month that I found
what I was looking for. I had traveled to Iraq a year after the war
began, at the height of what should have been a construction boom,
but after weeks of searching I had not seen a single piece of heavy
machinery apart from tanks and humvees. Then I saw it: a
construction crane. It was big and yellow and impressive, and when
I caught a glimpse of it around a corner in a busy shopping
district I thought that I was finally about to witness some of the
reconstruction I had heard so much about. But as I got closer I
noticed that the crane was not actually rebuilding anything --not
one of the bombed-out government buildings that still lay in rubble
all over the city, nor one of the many power lines that remained in
twisted heaps even as the heat of summer was starting to bear down.
No, the crane was hoisting a giant billboard to the top of a three-
story building. SUNBULAH: HONEY 100% NATURAL, made in Saudi Arabia.

Seeing the sign, I couldn't help but think about something Senator
John McCain had said back in October. Iraq, he said, is "a huge pot
of honey that's attracting a lot of flies." The flies McCain was
referring to were the Halliburtons and Bechtels, as well as the
venture capitalists who flocked to Iraq in the path cleared by
Bradley Fighting Vehicles and laser-guided bombs. The honey that
drew them was not just no-bid contracts and Iraq's famed oil wealth
but the myriad investment opportunities offered by a country that
had just been cracked wide open after decades of being sealed off,
first by the nationalist economic policies of Saddam Hussein, then
by asphyxiating United Nations sanctions.

Looking at the honey billboard, I was also reminded of the most
common explanation for what has gone wrong in Iraq, a complaint
echoed by everyone from John Kerry to Pat Buchanan: Iraq is mired
in blood and deprivation because George W. Bush didn't have "a
postwar plan." The only problem with this theory is that it isn't
true. The Bush Administration did have a plan for what it would do
after the war; put simply, it was to lay out as much honey as
possible, then sit back and wait for the flies.

* * *

The honey theory of Iraqi reconstruction stems from the most
cherished belief of the war's ideological architects: that greed is
good. Not good just for them and their friends but good for
humanity, and certainly good for Iraqis. Greed creates profit,
which creates growth, which creates jobs and products and services
and everything else anyone could possibly need or want. The role of
good government, then, is to create the optimal conditions for
corporations to pursue their bottomless greed, so that they in turn
can meet the needs of the society. The problem is that governments,
even neoconservative governments, rarely get the chance to prove
their sacred theory right: despite their enormous ideological
advances, even George Bush's Republicans are, in their own minds,
perennially sabotaged by meddling Democrats, intractable unions,
and alarmist environmentalists.

Iraq was going to change all that. In one place on Earth, the
theory would finally be put into practice in its most perfect and
uncompromised form. A country of 25 million would not be rebuilt as
it was before the war; it would be erased, disappeared. In its
place would spring forth a gleaming showroom for laissez-faire
economics, a utopia such as the world had never seen. Every policy
that liberates multinational corporations to pursue their quest for
profit would be put into place: a shrunken state, a flexible
workforce, open borders, minimal taxes, no tariffs, no ownership
restrictions. The people of Iraq would, of course, have to endure
some short-term pain: assets, previously owned by the state, would
have to be given up to create new opportunities for growth and
investment. Jobs would have to be lost and, as foreign products
flooded across the border, local businesses and family farms would,
unfortunately, be unable to compete. But to the authors of this
plan, these would be small prices to pay for the economic boom that
would surely explode once the proper conditions were in place, a
boom so powerful the country would practically rebuild itself.

The fact that the boom never came and Iraq continues to tremble
under explosions of a very different sort should never be blamed on
the absence of a plan. Rather, the blame rests with the plan
itself, and the extraordinarily violent ideology upon which it is
based.

* * *

Torturers believe that when electrical shocks are applied to
various parts of the body simultaneously subjects are rendered so
confused about where the pain is coming from that they become
incapable of resistance. A declassified CIA "Counterintelligence
Interrogation" manual from 1963 describes how a trauma inflicted on
prisoners opens up "an interval -- which may be extremely brief --
of suspended animation, a kind of psychological shock or paralysis.
. . [A]t this moment the source is far more open to suggestion,
far likelier to comply." A similar theory applies to economic shock
therapy, or "shock treatment," the ugly term used to describe the
rapid implementation of free-market reforms imposed on Chile in the
wake of General Augusto Pinochet's coup. The theory is that if
painful economic "adjustments" are brought in rapidly and in the
aftermath of a seismic social disruption like a war, a coup, or a
government collapse, the population will be so stunned, and so
preoccupied with the daily pressures of survival, that it too will
go into suspended animation, unable to resist. As Pinochet's
finance minister, Admiral Lorenzo Gotuzzo, declared, "The dog's
tail must be cut off in one chop."

That, in essence, was the working thesis in Iraq, and in keeping
with the belief that private companies are more suited than
governments for virtually every task, the White House decided to
privatize the task of privatizing Iraq's state-dominated economy.
Two months before the war began, USAID began drafting a work order,
to be handed out to a private company, to oversee Iraq's
"transition to a sustainable market-driven economic system." The
document states that the winning company (which turned out to be
the KPMG offshoot Bearing Point) will take "appropriate advantage
of the unique opportunity for rapid progress in this area presented
by the current configuration of political circumstances." Which is
precisely what happened.

L. Paul Bremer, who led the U.S. occupation of Iraq from May 2,
2003, until he caught an early flight out of Baghdad on June 28,
admits that when he arrived, "Baghdad was on fire, literally, as I
drove in from the airport." But before the fires from the "shock
and awe" military onslaught were even extinguished, Bremer
unleashed his shock therapy, pushing through more wrenching changes
in one sweltering summer than the International Monetary Fund has
managed to enact over three decades in Latin America. Joseph
Stiglitz, Nobel laureate and former chief economist at the World
Bank, describes Bremer's reforms as "an even more radical form of
shock therapy than pursued in the former Soviet world."

The tone of Bremer's tenure was set with his first major act on the
job: he fired 500,000 state workers, most of them soldiers, but
also doctors, nurses, teachers, publishers, and printers. Next, he
flung open the country's borders to absolutely unrestricted
imports: no tariffs, no duties, no inspections, no taxes. Iraq,
Bremer declared two weeks after he arrived, was "open for
business."

One month later, Bremer unveiled the centerpiece of his reforms.
Before the invasion, Iraq's non-oil-related economy had been
dominated by 200 state-owned companies, which produced everything
>from cement to paper to washing machines. In June, Bremer flew to
an economic summit in Jordan and announced that these firms would
be privatized immediately. "Getting inefficient state enterprises
into private hands," he said, "is essential for Iraq's economic
recovery." It would be the largest state liquidation sale since the
collapse of the Soviet Union.

But Bremer's economic engineering had only just begun. In
September, to entice foreign investors to come to Iraq, he enacted
a radical set of laws unprecedented in their generosity to
multinational corporations. There was Order 37, which lowered
Iraq's corporate tax rate from roughly 40 percent to a flat 15
percent. There was Order 39, which allowed foreign companies to own
100 percent of Iraqi assets outside of the natural-resource sector.
Even better, investors could take 100 percent of the profits they
made in Iraq out of the country; they would not be required to
reinvest and they would not be taxed. Under Order 39, they could
sign leases and contracts that would last for forty years. Order 40
welcomed foreign banks to Iraq under the same favorable terms. All
that remained of Saddam Hussein's economic policies was a law
restricting trade unions and collective bargaining.

If these policies sound familiar, it's because they are the same
ones multinationals around the world lobby for from national
governments and in international trade agreements. But while these
reforms are only ever enacted in part, or in fits and starts,
Bremer delivered them all, all at once. Overnight, Iraq went from
being the most isolated country in the world to being, on paper,
its widest-open market.

* * *

At first, the shock-therapy theory seemed to hold: Iraqis, reeling
from violence both military and economic, were far too busy staying
alive to mount a political response to Bremer's campaign. Worrying
about the privatization of the sewage system was an unimaginable
luxury with half the population lacking access to clean drinking
water; the debate over the flat tax would have to wait until the
lights were back on. Even in the international press, Bremer's new
laws, though radical, were easily upstaged by more dramatic news of
political chaos and rising crime.

Some people were paying attention, of course. That autumn was awash
in "rebuilding Iraq" trade shows, in Washington, London, Madrid,
and Amman. The Economist described Iraq under Bremer as "a
capitalist dream," and a flurry of new consulting firms were
launched promising to help companies get access to the Iraqi
market, their boards of directors stacked with well-connected
Republicans. The most prominent was New Bridge Strategies, started
by Joe Allbaugh, former Bush-Cheney campaign manager. "Getting the
rights to distribute Procter & Gamble products can be a gold mine,"
one of the company's partners enthused. "One well-stocked 7-Eleven
could knock out thirty Iraqi stores; a Wal-Mart could take over the
country."

Soon there were rumors that a McDonald's would be opening up in
downtown Baghdad, funding was almost in place for a Starwood luxury
hotel, and General Motors was planning to build an auto plant. On
the financial side, HSBC would have branches all over the country,
Citigroup was preparing to offer substantial loans guaranteed
against future sales of Iraqi oil, and the bell was going to ring
on a New York-style stock exchange in Baghdad any day.

In only a few months, the postwar plan to turn Iraq into a
laboratory for the neocons had been realized. Leo Strauss may have
provided the intellectual framework for invading Iraq preemptively,
but it was that other University of Chicago professor, Milton
Friedman, author of the anti-government manifesto Capitalism and
Freedom, who supplied the manual for what to do once the country
was safely in America's hands. This represented an enormous
victory for the most ideological wing of the Bush Administration.
But it was also something more: the culmination of two interlinked
power struggles, one among Iraqi exiles advising the White House on
its postwar strategy, the other within the White House itself.

* * *

As the British historian Dilip Hiro has shown, in "Secrets and
Lies: Operation 'Iraqi Freedom' and After," the Iraqi exiles
pushing for the invasion were divided, broadly, into two camps. On
one side were "the pragmatists," who favored getting rid of Saddam
and his immediate entourage, securing access to oil, and slowly
introducing free-market reforms. Many of these exiles were part of
the State Department's Future of Iraq Project, which generated a
thirteen-volume report on how to restore basic services and
transition to democracy after the war. On the other side was the
"Year Zero" camp, those who believed that Iraq was so contaminated
that it needed to be rubbed out and remade from scratch. The prime
advocate of the pragmatic approach was Iyad Allawi, a former high-
level Baathist who fell out with Saddam and started working for the
CIA. The prime advocate of the Year Zero approach was Ahmad
Chalabi, whose hatred of the Iraqi state for expropriating his
family's assets during the 1958 revolution ran so deep he longed to
see the entire country burned to the ground -- everything, that is,
but the Oil Ministry, which would be the nucleus of the new Iraq,
the cluster of cells from which an entire nation would grow. He
called this process "de-Baathification."

A parallel battle between pragmatists and true believers was being
waged within the Bush Administration. The pragmatists were men like
Secretary of State Colin Powell and General Jay Garner, the first
U.S. envoy to postwar Iraq. General Garner's plan was
straightforward enough: fix the infrastructure, hold quick and
dirty elections, leave the shock therapy to the International
Monetary Fund, and concentrate on securing U.S. military bases on
the model of the Philippines. "I think we should look right now at
Iraq as our coaling station in the Middle East," he told the BBC.
He also paraphrased T. E. Lawrence, saying, "It's better for them
to do it imperfectly than for us to do it for them perfectly." On
the other side was the usual cast of neoconservatives: Vice
President Dick Cheney, Secretary of Defense Donald Rumsfeld (who
lauded Bremer's "sweeping reforms" as "some of the most enlightened
and inviting tax and investment laws in the free world"), Deputy
Secretary of Defense Paul Wolfowitz, and, perhaps most centrally,
Undersecretary of Defense Douglas Feith. Whereas the State
Department had its Future of Iraq report, the neocons had USAID's
contract with Bearing Point to remake Iraq's economy: in 108 pages,
"privatization" was mentioned no fewer than fifty-one times. To the
true believers in the White House, General Garner's plans for
postwar Iraq seemed hopelessly unambitious. Why settle for a mere
coaling station when you can have a model free market? Why settle
for the Philippines when you can have a beacon unto the world?

The Iraqi Year Zeroists made natural allies for the White House
neoconservatives: Chalabi's seething hatred of the Baathist state
fit nicely with the neocons' hatred of the state in general, and
the two agendas effortlessly merged. Together, they came to imagine
the invasion of Iraq as a kind of Rapture: where the rest of the
world saw death, they saw birth -- a country redeemed through
violence, cleansed by fire. Iraq wasn't being destroyed by cruise
missiles, cluster bombs, chaos, and looting; it was being born
again. April 9, 2003, the day Baghdad fell, was Day One of Year
Zero.

While the war was being waged, it still wasn't clear whether the
pragmatists or the Year Zeroists would be handed control over
occupied Iraq. But the speed with which the nation was conquered
dramatically increased the neocons' political capital, since they
had been predicting a "cakewalk" all along. Eight days after George
Bush landed on that aircraft carrier under a banner that said
MISSION ACCOMPLISHED, the President publicly signed on to the
neocons' vision for Iraq to become a model corporate state that
would open up the entire region. On May 9, Bush proposed the
"establishment of a U.S.-Middle East free trade area within a
decade"; three days later, Bush sent Paul Bremer to Baghdad to
replace Jay Garner, who had been on the job for only three weeks.
The message was unequivocal: the pragmatists had lost; Iraq would
belong to the believers.

A Reagan-era diplomat turned entrepreneur, Bremer had recently
proven his ability to transform rubble into gold by waiting exactly
one month after the September 11 attacks to launch Crisis
Consulting Practice, a security company selling "terrorism risk
insurance" to multinationals. Bremer had two lieutenants on the
economic front: Thomas Foley and Michael Fleischer, the heads of
"private sector development" for the Coalition Provisional
Authority (CPA). Foley is a Greenwich, Connecticut,
multimillionaire, a longtime friend of the Bush family and a Bush-
Cheney campaign "pioneer" who has described Iraq as a modern
California "gold rush." Fleischer, a venture capitalist, is the
brother of former White House spokesman Ari Fleischer. Neither man
had any high-level diplomatic experience and both use the term
corporate "turnaround" specialist to describe what they do.
According to Foley, this uniquely qualified them to manage Iraq's
economy because it was "the mother of all turnarounds."

Many of the other CPA postings were equally ideological. The Green
Zone, the city within a city that houses the occupation
headquarters in Saddam's former palace, was filled with Young
Republicans straight out of the Heritage Foundation, all of them
given responsibility they could never have dreamed of receiving at
home. Jay Hallen, a twenty-four-year-old who had applied for a job
at the White House, was put in charge of launching Baghdad's new
stock exchange. Scott Erwin, a twenty-one-year-old former intern to
Dick Cheney, reported in an email home that "I am assisting Iraqis
in the management of finances and budgeting for the domestic
security forces." The college senior's favorite job before this
one? "My time as an ice-cream truck driver." In those early days,
the Green Zone felt a bit like the Peace Corps, for people who
think the Peace Corps is a communist plot. It was a chance to sleep
on cots, wear army boots, and cry "incoming" -- all while being
guarded around the clock by real soldiers.

The teams of KPMG accountants, investment bankers, think-tank
lifers, and Young Republicans that populate the Green Zone have
much in common with the IMF missions that rearrange the economies
of developing countries from the presidential suites of Sheraton
hotels the world over. Except for one rather significant
difference: in Iraq they were not negotiating with the government
to accept their "structural adjustments" in exchange for a loan;
they were the government.

Some small steps were taken, however, to bring Iraq's U.S.-
appointed politicians inside. Yegor Gaidar, the mastermind of
Russia's mid-nineties privatization auction that gave away the
country's assets to the reigning oligarchs, was invited to share
his wisdom at a conference in Baghdad. Marek Belka, who as finance
minister oversaw the same process in Poland, was brought in as
well. The Iraqis who proved most gifted at mouthing the neocon
lines were selected to act as what USAID calls local "policy
champions" -- men like Ahmad al Mukhtar, who told me of his
countrymen, "They are lazy. The Iraqis by nature, they are very
dependent. . . . They will have to depend on themselves, it is the
only way to survive in the world today." Although he has no
economics background and his last job was reading the English-
language news on television, al Mukhtar was appointed director of
foreign relations in the Ministry of Trade and is leading the
charge for Iraq to join the World Trade Organization.

* * *

I had been following the economic front of the war for almost a
year before I decided to go to Iraq. I attended the "Rebuilding
Iraq" trade shows, studied Bremer's tax and investment laws, met
with contractors at their home offices in the United States,
interviewed the government officials in Washington who are making
the policies. But as I prepared to travel to Iraq in March to see
this experiment in free-market utopianism up close, it was becoming
increasingly clear that all was not going according to plan. Bremer
had been working on the theory that if you build a corporate utopia
the corporations will come -- but where were they? American
multinationals were happy to accept U.S. taxpayer dollars to
reconstruct the phone or electricity systems, but they weren't
sinking their own money into Iraq. There was, as yet, no McDonald's
or Wal-Mart in Baghdad, and even the sales of state factories,
announced so confidently nine months earlier, had not materialized.

Some of the holdup had to do with the physical risks of doing
business in Iraq. But there were other more significant risks as
well. When Paul Bremer shredded Iraq's Baathist constitution and
replaced it with what The Economist greeted approvingly as "the
wish list of foreign investors," there was one small detail he
failed to mention: It was all completely illegal. The CPA derived
its legal authority from United Nations Security Council Resolution
1483, passed in May 2003, which recognized the United States and
Britain as Iraq's legitimate occupiers. It was this resolution
that empowered Bremer to unilaterally make laws in Iraq. But the
resolution also stated that the U.S. and Britain must "comply fully
with their obligations under international law including in
particular the Geneva Conventions of 1949 and the Hague Regulations
of 1907." Both conventions were born as an attempt to curtail the
unfortunate historical tendency among occupying powers to rewrite
the rules so that they can economically strip the nations they
control. With this in mind, the conventions stipulate that an
occupier must abide by a country's existing laws unless "absolutely
prevented" from doing so. They also state that an occupier does
not own the "public buildings, real estate, forests and
agricultural assets" of the country it is occupying but is rather
their "administrator" and custodian, keeping them secure until
sovereignty is reestablished. This was the true threat to the Year
Zero plan: since America didn't own Iraq's assets, it could not
legally sell them, which meant that after the occupation ended, an
Iraqi government could come to power and decide that it wanted to
keep the state companies in public hands, or, as is the norm in the
Gulf region, to bar foreign firms from owning 100 percent of
national assets. If that happened, investments made under Bremer's
rules could be expropriated, leaving firms with no recourse because
their investments had violated international law from the outset.

By November, trade lawyers started to advise their corporate
clients not to go into Iraq just yet, that it would be better to
wait until after the transition. Insurance companies were so
spooked that not a single one of the big firms would insure
investors for "political risk," that high-stakes area of insurance
law that protects companies against foreign governments turning
nationalist or socialist and expropriating their investments.

Even the U.S.-appointed Iraqi politicians, up to now so obedient,
were getting nervous about their own political futures if they went
along with the privatization plans. Communications Minister Haider
al-Abadi told me about his first meeting with Bremer."I said,
'Look, we don't have the mandate to sell any of this. Privatization
is a big thing. We have to wait until there is an Iraqi
government.'" Minister of Industry Mohamad Tofiq was even more
direct: "I am not going to do something that is not legal, so
that's it."

Both al-Abadi and Tofiq told me about a meeting --never reported in
the press -- that took place in late October 2003. At that
gathering the twenty-five members of Iraq's Governing Council as
well as the twenty-five interim ministers decided unanimously that
they would not participate in the privatization of Iraq's state-
owned companies or of its publicly owned infrastructure.

But Bremer didn't give up. International law prohibits occupiers
from selling state assets themselves, but it doesn't say anything
about the puppet governments they appoint. Originally, Bremer had
pledged to hand over power to a directly elected Iraqi government,
but in early November he went to Washington for a private meeting
with President Bush and came back with a Plan B. On June 30 the
occupation would officially end --but not really. It would be
replaced by an appointed government, chosen by Washington. This
government would not be bound by the international laws preventing
occupiers from selling off state assets, but it would be bound by
an "interim constitution," a document that would protect Bremer's
investment and privatization laws.

The plan was risky. Bremer's June 30 deadline was awfully close,
and it was chosen for a less than ideal reason: so that President
Bush could trumpet the end of Iraq's occupation on the campaign
trail. If everything went according to plan, Bremer would succeed
in forcing a "sovereign" Iraqi government to carry out his illegal
reforms. But if something went wrong, he would have to go ahead
with the June 30 handover anyway because by then Karl Rove, and not
Dick Cheney or Donald Rumsfeld, would be calling the shots. And if
it came down to a choice between ideology in Iraq and the
electability of George W. Bush, everyone knew which would win.

* * *

At first, Plan B seemed to be right on track. Bremer persuaded the
Iraqi Governing Council to agree to everything: the new timetable,
the interim government, and the interim constitution. He even
managed to slip into the constitution a completely overlooked
clause, Article 26. It stated that for the duration of the interim
government, "The laws, regulations, orders and directives issued by
the Coalition Provisional Authority . . . shall remain in force"
and could only be changed after general elections are held.

Bremer had found his legal loophole: There would be a window --
seven months -- when the occupation was officially over but before
general elections were scheduled to take place. Within this window,
the Hague and Geneva Conventions' bans on privatization would no
longer apply, but Bremer's own laws, thanks to Article 26, would
stand. During these seven months, foreign investors could come to
Iraq and sign forty-year contracts to buy up Iraqi assets. If a
future elected Iraqi government decided to change the rules,
investors could sue for compensation.

But Bremer had a formidable opponent: Grand Ayatollah Ali al
Sistani, the most senior Shia cleric in Iraq. al Sistani tried to
block Bremer's plan at every turn, calling for immediate direct
elections and for the constitution to be written after those
elections, not before. Both demands, if met, would have closed
Bremer's privatization window. Then, on March 2, with the Shia
members of the Governing Council refusing to sign the interim
constitution, five bombs exploded in front of mosques in Karbala
and Baghdad, killing close to 200 worshipers. General John Abizaid,
the top U.S. commander in Iraq, warned that the country was on the
verge of civil war. Frightened by this prospect, al Sistani backed
down and the Shia politicians signed the interim constitution. It
was a familiar story: the shock of a violent attack paved the way
for more shock therapy.

When I arrived in Iraq a week later, the economic project seemed to
be back on track. All that remained for Bremer was to get his
interim constitution ratified by a Security Council resolution,
then the nervous lawyers and insurance brokers could relax and the
sell-off of Iraq could finally begin. The CPA, meanwhile, had
launched a major new P.R. offensive designed to reassure investors
that Iraq was still a safe and exciting place to do business. The
centerpiece of the campaign was Destination Baghdad Exposition, a
massive trade show for potential investors to be held in early
April at the Baghdad International Fairgrounds. It was the first
such event inside Iraq, and the organizers had branded the trade
fair "DBX," as if it were some sort of Mountain Dew-sponsored dirt-
bike race. In keeping with the extreme-sports theme, Thomas Foley
traveled to Washington to tell a gathering of executives that the
risks in Iraq are akin "to skydiving or riding a motorcycle, which
are, to many, very acceptable risks."

But three hours after my arrival in Baghdad, I was finding these
reassurances extremely hard to believe. I had not yet unpacked when
my hotel room was filled with debris and the windows in the lobby
were shattered. Down the street, the Mount Lebanon Hotel had just
been bombed, at that point the largest attack of its kind since the
official end of the war. The next day, another hotel was bombed in
Basra, then two Finnish businessmen were murdered on their way to a
meeting in Baghdad. Brigadier General Mark Kimmitt finally admitted
that there was a pattern at work: "the extremists have started
shifting away from the hard targets . . . [and] are now going out
of their way to specifically target softer targets." The next day,
the State Department updated its travel advisory: U.S. citizens
were "strongly warned against travel to Iraq."

The physical risks of doing business in Iraq seemed to be spiraling
out of control. This, once again, was not part of the original
plan. When Bremer first arrived in Baghdad, the armed resistance
was so low that he was able to walk the streets with a minimal
security entourage. During his first four months on the job, 109
U.S. soldiers were killed and 570 were wounded. In the following
four months, when Bremer's shock therapy had taken effect, the
number of U.S. casualties almost doubled, with 195 soldiers killed
and 1,633 wounded. There are many in Iraq who argue that these
events are connected -- that Bremer's reforms were the single
largest factor leading to the rise of armed resistance.

Take, for instance, Bremer's first casualties. The soldiers and
workers he laid off without pensions or severance pay didn't all
disappear quietly. Many of them went straight into the mujahedeen,
forming the backbone of the armed resistance. "Half a million
people are now worse off, and there you have the water tap that
keeps the insurgency going. It's alternative employment," says
Hussain Kubba, head of the prominent Iraqi business group Kubba
Consulting. Some of Bremer's other economic casualties also have
failed to go quietly. It turns out that many of the businessmen
whose companies are threatened by Bremer's investment laws have
decided to make investments of their own --in the resistance. It is
partly their money that keeps fighters in Kalashnikovs and RPGs.

These developments present a challenge to the basic logic of shock
therapy: the neocons were convinced that if they brought in their
reforms quickly and ruthlessly, Iraqis would be too stunned to
resist. But the shock appears to have had the opposite effect;
rather than the predicted paralysis, it jolted many Iraqis into
action, much of it extreme. Haider al-Abadi, Iraq's minister of
communication, puts it this way: "We know that there are terrorists
in the country, but previously they were not successful, they were
isolated. Now because the whole country is unhappy, and a lot of
people don't have jobs . . . these terrorists are finding listening
ears."

Bremer was now at odds not only with the Iraqis who opposed his
plans but with U.S military commanders charged with putting down
the insurgency his policies were feeding. Heretical questions began
to be raised: instead of laying people off, what if the CPA
actually created jobs for Iraqis? And instead of rushing to sell
off Iraq's 200 state-owned firms, how about putting them back to
work?

* * *

From the start, the neocons running Iraq had shown nothing but
disdain for Iraq's state-owned companies. In keeping with their
Year Zero -- apocalyptic glee, when looters descended on the
factories during the war, U.S. forces did nothing. Sabah Asaad,
managing director of a refrigerator factory outside Baghdad, told
me that while the looting was going on, he went to a nearby U.S.
Army base and begged for help. "I asked one of the officers to send
two soldiers and a vehicle to help me kick out the looters. I was
crying. The officer said, 'Sorry, we can't do anything, we need an
order from President Bush.'" Back in Washington, Donald Rumsfeld
shrugged. "Free people are free to make mistakes and commit crimes
and do bad things."

To see the remains of Asaad's football-field-size warehouse is to
understand why Frank Gehry had an artistic crisis after September
11 and was briefly unable to design structures resembling the
rubble of modern buildings. Asaad's looted and burned factory looks
remarkably like a heavy-metal version of Gehry's Guggenheim in
Bilbao, Spain, with waves of steel, buckled by fire, lying in
terrifyingly beautiful golden heaps. Yet all was not lost. "The
looters were good-hearted," one of Asaad's painters told me,
explaining that they left the tools and machines behind, "so we
could work again." Because the machines are still there, many
factory managers in Iraq say that it would take little for them to
return to full production. They need emergency generators to cope
with daily blackouts, and they need capital for parts and raw
materials. If that happened, it would have tremendous implications
for Iraq's stalled reconstruction, because it would mean that many
of the key materials needed to rebuild -- cement and steel, bricks
and furniture -- could be produced inside the country.

But it hasn't happened. Immediately after the nominal end of the
war, Congress appropriated $2.5 billion for the reconstruction of
Iraq, followed by an additional $18.4 billion in October. Yet as of
July 2004, Iraq's state-owned factories had been pointedly excluded
from the reconstruction contracts. Instead, the billions have all
gone to Western companies, with most of the materials for the
reconstruction imported at great expense from abroad.

With unemployment as high as 67 percent, the imported products and
foreign workers flooding across the borders have become a source of
tremendous resentment in Iraq and yet another open tap fueling the
insurgency. And Iraqis don't have to look far for reminders of this
injustice; it's on display in the most ubiquitous symbol of the
occupation: the blast wall. The ten-foot-high slabs of reinforced
concrete are everywhere in Iraq, separating the protected -- the
people in upscale hotels, luxury homes, military bases, and, of
course, the Green Zon -- from the unprotected and exposed. If that
wasn't injury enough, all the blast walls are imported, from
Kurdistan, Turkey, or even farther afield, this despite the fact
that Iraq was once a major manufacturer of cement, and could easily
be again. There are seventeen state-owned cement factories across
the country, but most are idle or working at only half capacity.
According to the Ministry of Industry, not one of these factories
has received a single contract to help with the reconstruction,
even though they could produce the walls and meet other needs for
cement at a greatly reduced cost. The CPA pays up to $1,000 per
imported blast wall; local manufacturers say they could make them
for $100. Minister Tofiq says there is a simple reason why the
Americans refuse to help get Iraq's cement factories running again:
among those making the decisions, "no one believes in the public
sector."[1]

This kind of ideological blindness has turned Iraq's occupiers into
prisoners of their own policies, hiding behind walls that, by their
very existence, fuel the rage at the U.S. presence, thereby feeding
the need for more walls. In Baghdad the concrete barriers have been
given a popular nickname: Bremer Walls.

As the insurgency grew, it soon became clear that if Bremer went
ahead with his plans to sell off the state companies, it could
worsen the violence. There was no question that privatization would
require layoffs: the Ministry of Industry estimates that roughly
145,000 workers would have to be fired to make the firms desirable
to investors, with each of those workers supporting, on average,
five family members. For Iraq's besieged occupiers the question
was: Would these shock-therapy casualties accept their fate or
would they rebel?

* * *

The answer arrived, in rather dramatic fashion, at one of the
largest state-owned companies, the General Company for Vegetable
Oils. The complex of six factories in a Baghdad industrial zone
produces cooking oil, hand soap, laundry detergent, shaving cream,
and shampoo. At least that is what I was told by a receptionist who
gave me glossy brochures and calendars boasting of "modern
instruments" and "the latest and most up to date developments in
the field of industry." But when I approached the soap factory, I
discovered a group of workers sleeping outside a darkened building.
Our guide rushed ahead, shouting something to a woman in a white
lab coat, and suddenly the factory scrambled into activity: lights
switched on, motors revved up, and workers -- still blinking off
sleep -- began filling two-liter plastic bottles with pale blue
Zahi brand dishwashing liquid.

I asked Nada Ahmed, the woman in the white coat, why the factory
wasn't working a few minutes before. She explained that they have
only enough electricity and materials to run the machines for a
couple of hours a day, but when guests arrive -- would-be
investors, ministry officials, journalists -- they get them going.
"For show," she explained. Behind us, a dozen bulky machines sat
idle, covered in sheets of dusty plastic and secured with duct
tape.

In one dark corner of the plant, we came across an old man hunched
over a sack filled with white plastic caps. With a thin metal blade
lodged in a wedge of wax, he carefully whittled down the edges of
each cap, leaving a pile of shavings at his feet. "We don't have
the spare part for the proper mold, so we have to cut them by
hand," his supervisor explained apologetically. "We haven't
received any parts from Germany since the sanctions began." I
noticed that even on the assembly lines that were nominally working
there was almost no mechanization: bottles were held under spouts
by hand because conveyor belts don't convey, lids once snapped on
by machines were being hammered in place with wooden mallets. Even
the water for the factory was drawn from an outdoor well, hoisted
by hand, and carried inside.

The solution proposed by the U.S. occupiers was not to fix the
plant but to sell it, and so when Bremer announced the
privatization auction back in June 2003 this was among the first
companies mentioned. Yet when I visited the factory in March,
nobody wanted to talk about the privatization plan; the mere
mention of the word inside the plant inspired awkward silences and
meaningful glances. This seemed an unnatural amount of subtext for
a soap factory, and I tried to get to the bottom of it when I
interviewed the assistant manager. But the interview itself was
equally odd: I had spent half a week setting it up, submitting
written questions for approval, getting a signed letter of
permission from the minister of industry, being questioned and
searched several times. But when I finally began the interview, the
assistant manager refused to tell me his name or let me record the
conversation. "Any manager mentioned in the press is attacked
afterwards," he said. And when I asked whether the company was
being sold, he gave this oblique response: "If the decision was up
to the workers, they are against privatization; but if it's up to
the high-ranking officials and government, then privatization is an
order and orders must be followed."

I left the plant feeling that I knew less than when I'd arrived.
But on the way out of the gates, a young security guard handed my
translator a note. He wanted us to meet him after work at a nearby
restaurant, "to find out what is really going on with
privatization." His name was Mahmud, and he was a twenty-five-year-
old with a neat beard and big black eyes. (For his safety, I have
omitted his last name.) His story began in July, a few weeks after
Bremer's privatization announcement. The company's manager, on his
way to work, was shot to death. Press reports speculated that the
manager was murdered because he was in favor of privatizing the
plant, but Mahmud was convinced that he was killed because he
opposed the plan. "He would never have sold the factories like the
Americans want. That's why they killed him."

The dead man was replaced by a new manager, Mudhfar Ja'far. Shortly
after taking over, Ja'far called a meeting with ministry officials
to discuss selling off the soap factory, which would involve laying
off two thirds of its employees. Guarding that meeting were several
security officers from the plant. They listened closely to Ja'far's
plans and promptly reported the alarming news to their coworkers.
"We were shocked," Mahmud recalled. "If the private sector buys our
company, the first thing they would do is reduce the staff to make
more money. And we will be forced into a very hard destiny, because
the factory is our only way of living."

Frightened by this prospect, a group of seventeen workers,
including Mahmud, marched into Ja'far's office to confront him on
what they had heard. "Unfortunately, he wasn't there, only the
assistant manager, the one you met," Mahmud told me. A fight broke
out: one worker struck the assistant manager, and a bodyguard fired
three shots at the workers. The crowd then attacked the bodyguard,
took his gun, and, Mahmud said, "stabbed him with a knife in the
back three times. He spent a month in the hospital." In January
there was even more violence. On their way to work, Ja'far, the
manager, and his son were shot and badly injured. Mahmud told me
he had no idea who was behind the attack, but I was starting to
understand why factory managers in Iraq try to keep a low profile.

At the end of our meeting, I asked Mahmud what would happen if the
plant was sold despite the workers' objections. "There are two
choices," he said, looking me in the eye and smiling kindly.
"Either we will set the factory on fire and let the flames devour
it to the ground, or we will blow ourselves up inside of it. But it
will not be privatized."

If there ever was a moment when Iraqis were too disoriented to
resist shock therapy, that moment has definitely passed. Labor
relations, like everything else in Iraq, has become a blood sport.
The violence on the streets howls at the gates of the factories,
threatening to engulf them. Workers fear job loss as a death
sentence, and managers, in turn, fear their workers, a fact that
makes privatization distinctly more complicated than the neocons
foresaw.[2]

* * *

As I left the meeting with Mahmud, I got word that there was a
major demonstration outside the CPA headquarters. Supporters of the
radical young cleric Moqtada al Sadr were protesting the closing of
their newspaper, al Hawza, by military police. The CPA accused al
Hawza of publishing "false articles" that could "pose the real
threat of violence." As an example, it cited an article that
claimed Bremer "is pursuing a policy of starving the Iraqi people
to make them preoccupied with procuring their daily bread so they
do not have the chance to demand their political and individual
freedoms." To me it sounded less like hate literature than a
concise summary of Milton Friedman's recipe for shock therapy.

A few days before the newspaper was shut down, I had gone to Kufa
during Friday prayers to listen to al Sadr at his mosque. He had
launched into a tirade against Bremer's newly signed interim
constitution, calling it "an unjust, terrorist document." The
message of the sermon was clear: Grand Ayatollah Ali al Sistani may
have backed down on the constitution, but al Sadr and his
supporters were still determined to fight it -- and if they
succeeded they would sabotage the neocons' careful plan to saddle
Iraq's next government with their "wish list" of laws. With the
closing of the newspaper, Bremer was giving al Sadr his response:
he wasn't negotiating with this young upstart; he'd rather take him
out with force.

When I arrived at the demonstration, the streets were filled with
men dressed in black, the soon-to-be legendary Mahdi Army. It
struck me that if Mahmud lost his security guard job at the soap
factory, he could be one of them. That's who al Sadr's foot
soldiers are: the young men who have been shut out of the neocons'
grand plans for Iraq, who see no possibilities for work, and whose
neighborhoods have seen none of the promised reconstruction. Bremer
has failed these young men, and everywhere that he has failed,
Moqtada al Sadr has cannily set out to succeed. In Shia slums from
Baghdad to Basra, a network of Sadr Centers coordinate a kind of
shadow reconstruction. Funded through donations, the centers
dispatch electricians to fix power and phone lines, organize local
garbage collection, set up emergency generators, run blood drives,
direct traffic where the streetlights donâ't work. And yes, they
organize militias too. Al Sadr took Bremer's economic casualties,
dressed them in black, and gave them rusty Kalashnikovs. His
militiamen protected the mosques and the state factories when the
occupation authorities did not, but in some areas they also went
further, zealously enforcing Islamic law by torching liquor stores
and terrorizing women without the veil. Indeed, the astronomical
rise of the brand of religious fundamentalism that al Sadr
represents is another kind of blowback from Bremer's shock therapy:
if the reconstruction had provided jobs, security, and services to
Iraqis, al Sadr would have been deprived of both his mission and
many of his newfound followers.

At the same time as al Sadr's followers were shouting "Down with
America" outside the Green Zone, something was happening in another
part of the country that would change everything. Four American
mercenary soldiers were killed in Fallujah, their charred and
dismembered bodies hung like trophies over the Euphrates. The
attacks would prove a devastating blow for the neocons, one from
which they would never recover. With these images, investing in
Iraq suddenly didn't look anything like a capitalist dream; it
looked like a macabre nightmare made real.

The day I left Baghdad was the worst yet. Fallujah was under siege
and Brig. Gen. Kimmitt was threatening to "destroy the al-Mahdi
Army." By the end, roughly 2,000 Iraqis were killed in these twin
campaigns. I was dropped off at a security checkpoint several miles
>from the airport, then loaded onto a bus jammed with contractors
lugging hastily packed bags. Although no one was calling it one,
this was an evacuation: over the next week 1,500 contractors left
Iraq, and some governments began airlifting their citizens out of
the country. On the bus no one spoke; we all just listened to the
mortar fire, craning our necks to see the red glow. A guy carrying
a KPMG briefcase decided to lighten things up. "So is there
business class on this flight?" he asked the silent bus. From the
back, somebody called out, "Not yet."

Indeed, it may be quite a while before business class truly arrives
in Iraq. When we landed in Amman, we learned that we had gotten out
just in time. That morning three Japanese civilians were kidnapped
and their captors were threatening to burn them alive. Two days
later Nicholas Berg went missing and was not seen again until the
snuff film surfaced of his beheading, an even more terrifying
message for U.S. contractors than the charred bodies in Fallujah.
These were the start of a wave of kidnappings and killings of
foreigners, most of them businesspeople, from a rainbow of nations:
South Korea, Italy, China, Nepal, Pakistan, the Philippines,
Turkey. By the end of June more than ninety contractors were
reported dead in Iraq. When seven Turkish contractors were
kidnapped in June, their captors asked the "company to cancel all
contracts and pull out employees from Iraq." Many insurance
companies stopped selling life insurance to contractors, and others
began to charge premiums as high as $10,000 a week for a single
Western executive -- the same price some insurgents reportedly pay
for a dead American.

For their part, the organizers of DBX, the historic Baghdad trade
fair, decided to relocate to the lovely tourist city of Diyarbakir
in Turkey, "just 250 km from the Iraqi border." An Iraqi landscape,
only without those frightening Iraqis. Three weeks later just
fifteen people showed up for a Commerce Department conference in
Lansing, Michigan, on investing in Iraq. Its host, Republican
Congressman Mike Rogers, tried to reassure his skeptical audience
by saying that Iraq is "like a rough neighborhood anywhere in
America." The foreign investors, the ones who were offered every
imaginable free-market enticement, are clearly not convinced; there
is still no sign of them. Keith Crane, a senior economist at the
Rand Corporation who has worked for the CPA, put it bluntly: "I
don't believe the board of a multinational company could approve a
major investment in this environment. If people are shooting at
each other, it's just difficult to do business." Hamid Jassim
Khamis, the manager of the largest soft-drink bottling plant in the
region, told me he can't find any investors, even though he landed
the exclusive rights to produce Pepsi in central Iraq. "A lot of
people have approached us to invest in the factory, but people are
really hesitating now." Khamis said he couldn't blame them; in five
months he has survived an attempted assassination, a carjacking,
two bombs planted at the entrance of his factory, and the
kidnapping of his son.

Despite having been granted the first license for a foreign bank to
operate in Iraq in forty years, HSBC still hasn't opened any
branches, a decision that may mean losing the coveted license
altogether. Procter & Gamble has put its joint venture on hold, and
so has General Motors. The U.S. financial backers of the Starwood
luxury hotel and multiplex have gotten cold feet, and Siemens AG
has pulled most staff from Iraq. The bell hasn't rung yet at the
Baghdad Stock Exchange -- in fact you can't even use credit cards
in Iraq's cash-only economy. New Bridge Strategies, the company
that had gushed back in October about how "a Wal-Mart could take
over the country," is sounding distinctly humbled. "McDonald's is
not opening anytime soon," company partner Ed Rogers told the
Washington Post. Neither is Wal-Mart. The Financial Times has
declared Iraq "the most dangerous place in the world in which to do
business." It's quite an accomplishment: in trying to design the
best place in the world to do business, the neocons have managed to
create the worst, the most eloquent indictment yet of the guiding
logic behind deregulated free markets.

The violence has not just kept investors out; it also forced
Bremer, before he left, to abandon many of his central economic
policies. Privatization of the state companies is off the table;
instead, several of the state companies have been offered up for
lease, but only if the investor agrees not to lay off a single
employee. Thousands of the state workers that Bremer fired have
been rehired, and significant raises have been handed out in the
public sector as a whole. Plans to do away with the food-ration
program have also been scrapped -- it just doesn't seem like a good
time to deny millions of Iraqis the only nutrition on which they
can depend.

* * *

The final blow to the neocon dream came in the weeks before the
handover. The White House and the CPA were rushing to get the U.N.
Security Council to pass a resolution endorsing their handover
plan. They had twisted arms to give the top job to former CIA
agent Iyad Allawi, a move that will ensure that Iraq becomes, at
the very least, the coaling station for U.S. troops that Jay Garner
originally envisioned. But if major corporate investors were going
to come to Iraq in the future, they would need a stronger guarantee
that Bremer's economic laws would stick. There was only one way of
doing that: the Security Council resolution had to ratify the
interim constitution, which locked in Bremer's laws for the
duration of the interim government. But al Sistani once again
objected, this time unequivocally, saying that the constitution has
been "rejected by the majority of the Iraqi people." On June 8 the
Security Council unanimously passed a resolution that endorsed the
handover plan but made absolutely no reference to the constitution.
In the face of this far-reaching defeat, George W. Bush celebrated
the resolution as a historic victory, one that came just in time
for an election trail photo op at the G-8 Summit in Georgia.

With Bremer's laws in limbo, Iraqi ministers are already talking
openly about breaking contracts signed by the CPA. Citigroup's loan
scheme has been rejected as a misuse of Iraq's oil revenues. Iraq's
communication minister is threatening to renegotiate contracts with
the three communications firms providing the country with its
disastrously poor cell phone service. And the Lebanese and U.S.
companies hired to run the state television network have been
informed that they could lose their licenses because they are not
Iraqi. "We will see if we can change the contract," Hamid al-
Kifaey, spokesperson for the Governing Council, said in May. "They
have no idea about Iraq." For most investors, this complete lack of
legal certainty simply makes Iraq too great a risk.

But while the Iraqi resistance has managed to scare off the first
wave of corporate raiders, there's little doubt that they will
return. Whatever form the next Iraqi government takes --
nationalist, Islamist, or free market -- it will inherit a
shattered nation with a crushing $120 billion debt. Then, as in all
poor countries around the world, men in dark blue suits from the
IMF will appear at the door, bearing loans and promises of economic
boom, provided that certain structural adjustments are made, which
will, of course, be rather painful at first but well worth the
sacrifice in the end. In fact, the process has already begun: the
IMF is poised to approve loans worth $2.5 - $4.25 billion, pending
agreement on the conditions. After an endless succession of
courageous last stands and far too many lost lives, Iraq will
become a poor nation like any other, with politicians determined to
introduce policies rejected by the vast majority of the population,
and all the imperfect compromises that will entail. The free market
will no doubt come to Iraq, but the neoconservative dream of
transforming the country into a free-market utopia has already
died, a casualty of a greater dream -- a second term for George W.
Bush.

The great historical irony of the catastrophe unfolding in Iraq is
that the shock-therapy reforms that were supposed to create an
economic boom that would rebuild the country have instead fueled a
resistance that ultimately made reconstruction impossible. Bremer's
reforms unleashed forces that the neocons neither predicted nor
could hope to control, from armed insurrections inside factories to
tens of thousands of unemployed young men arming themselves. These
forces have transformed Year Zero in Iraq into the mirror opposite
of what the neocons envisioned: not a corporate utopia but a
ghoulish dystopia, where going to a simple business meeting can get
you lynched, burned alive, or beheaded. These dangers are so great
that in Iraq global capitalism has retreated, at least for now. For
the neocons, this must be a shocking development: their ideological
belief in greed turns out to be stronger than greed itself.

Iraq was to the neocons what Afghanistan was to the Taliban: the
one place on Earth where they could force everyone to live by the
most literal, unyielding interpretation of their sacred texts. One
would think that the bloody results of this experiment would
inspire a crisis of faith: in the country where they had absolute
free reign, where there was no local government to blame, where
economic reforms were introduced at their most shocking and most
perfect, they created, instead of a model free market, a failed
state no right-thinking investor would touch. And yet the Green
Zone neocons and their masters in Washington are no more likely to
reexamine their core beliefs than the Taliban mullahs were inclined
to search their souls when their Islamic state slid into a
debauched Hades of opium and sex slavery. When facts threaten true
believers, they simply close their eyes and pray harder.

Which is precisely what Thomas Foley has been doing. The former
head of "private sector development" has left Iraq, a country he
had described as "the mother of all turnarounds," and has accepted
another turnaround job, as co-chair of George Bush's reelection
committee in Connecticut. On April 30 in Washington he addressed a
crowd of entrepreneurs about business prospects in Baghdad. It was
a tough day to be giving an upbeat speech: that morning the first
photographs had appeared out of Abu Ghraib, including one of a
hooded prisoner with electrical wires attached to his hands. This
was another kind of shock therapy, far more literal than the one
Foley had helped to administer, but not entirely unconnected.
"Whatever you're seeing, it's not as bad as it appears," Foley told
the crowd. "You just need to accept that on faith."

[Naomi Klein is the author of No Logo and writer/producer of "The
Take," a new documentary on Argentina's occupied factories.]

Notes:

1. Tofiq did say that several U.S. companies had expressed strong
interest in buying the state-owned cement factories. This supports
a widely held belief in Iraq that there is a deliberate strategy to
neglect the state firms so that they can be sold more cheaply--a
practice known as "starve then sell."

2. It is in Basra where the connections between economic reforms
and the rise of the resistance was put in starkest terms. In
December the union representing oil workers was negotiating with
the Oil Ministry for a salary increase. Getting nowhere, the
workers offered the ministry a simple choice: increase their paltry
salaries or they would all join the armed resistance. They received
a substantial raise.

End of forwarded message from mode...@portside.org

Jai Maharaj
http://www.mantra.com/jai
Om Shanti

3) Bush's terror war is really a war for world domination:

This War on Terrorism is Bogus

The 9/11 attacks gave the US an ideal pretext to use force to secure
its global domination

Michael Meacher
-----------------------------------------------------------------------
Saturday September 6, 2003
The Guardian

http://politics.guardian.co.uk/comment/story/0,9115,1036688,00.html

Michael Meacher MP was environment minister from May 1997 to June 2003

Massive attention has now been given - and rightly so - to the reasons
why Britain went to war against Iraq. But far too little attention has
focused on why the US went to war, and that throws light on British
motives too.

The conventional explanation is that after the Twin Towers were hit,
retaliation against al-Qaida bases in Afghanistan was a natural first
step in launching a global war against terrorism. Then, because Saddam
Hussein was alleged by the US and UK governments to retain weapons of
mass destruction, the war could be extended to Iraq as well. However
this theory does not fit all the facts. The truth may be a great deal
murkier.

We now know that a blueprint for the creation of a global Pax
Americana was drawn up for Dick Cheney (now vice-president), Donald
Rumsfeld (defence secretary), Paul Wolfowitz (Rumsfeld's deputy), Jeb
Bush (George Bush's younger brother) and Lewis Libby (Cheney's chief
of staff). The document, entitled Rebuilding America's Defences, was
written in September 2000 by the neoconservative think tank, Project
for the New American Century (PNAC).

The plan shows Bush's cabinet intended to take military control of the
Gulf region whether or not Saddam Hussein was in power. It says "while
the unresolved conflict with Iraq provides the immediate
justification, the need for a substantial American force presence in
the Gulf transcends the issue of the regime of Saddam Hussein."

The PNAC blueprint supports an earlier document attributed to
Wolfowitz and Libby which said the US must "discourage advanced
industrial nations from challenging our leadership or even aspiring to
a larger regional or global role". It refers to key allies such as the
UK as "the most effective and efficient means of exercising American
global leadership". It describes peacekeeping missions as "demanding
American political leadership rather than that of the UN". It says
"even should Saddam pass from the scene", US bases in Saudi Arabia and
Kuwait will remain permanently... as "Iran may well prove as large a
threat to US interests as Iraq has". It spotlights China for "regime
change", saying "it is time to increase the presence of American
forces in SE Asia".

The document also calls for the creation of "US space forces" to
dominate space, and the total control of cyberspace to prevent
"enemies" using the internet against the US. It also hints that the US
may consider developing biological weapons "that can target specific
genotypes [and] may transform biological warfare from the realm of
terror to a politically useful tool".

Finally - written a year before 9/11 - it pinpoints North Korea, Syria
and Iran as dangerous regimes, and says their existence justifies the
creation of a "worldwide command and control system". This is a
blueprint for US world domination. But before it is dismissed as an
agenda for rightwing fantasists, it is clear it provides a much better
explanation of what actually happened before, during and after 9/11
than the global war on terrorism thesis. This can be seen in several
ways.

First, it is clear the US authorities did little or nothing to
pre-empt the events of 9/11. It is known that at least 11 countries
provided advance warning to the US of the 9/11 attacks. Two senior
Mossad experts were sent to Washington in August 2001 to alert the CIA
and FBI to a cell of 200 terrorists said to be preparing a big
operation (Daily Telegraph, September 16 2001). The list they provided
included the names of four of the 9/11 hijackers, none of whom was
arrested.

It had been known as early as 1996 that there were plans to hit
Washington targets with aeroplanes. Then in 1999 a US national
intelligence council report noted that "al-Qaida suicide bombers could
crash-land an aircraft packed with high explosives into the Pentagon,
the headquarters of the CIA, or the White House".

Fifteen of the 9/11 hijackers obtained their visas in Saudi Arabia.
Michael Springman, the former head of the American visa bureau in
Jeddah, has stated that since 1987 the CIA had been illicitly issuing
visas to unqualified applicants from the Middle East and bringing them
to the US for training in terrorism for the Afghan war in
collaboration with Bin Laden (BBC, November 6 2001). It seems this
operation continued after the Afghan war for other purposes. It is
also reported that five of the hijackers received training at secure
US military installations in the 1990s (Newsweek, September 15 2001).

Instructive leads prior to 9/11 were not followed up. French Moroccan
flight student Zacarias Moussaoui (now thought to be the 20th
hijacker) was arrested in August 2001 after an instructor reported he
showed a suspicious interest in learning how to steer large
airliners. When US agents learned from French intelligence he had
radical Islamist ties, they sought a warrant to search his computer,
which contained clues to the September 11 mission (Times, November 3
2001). But they were turned down by the FBI. One agent wrote, a month
before 9/11, that Moussaoui might be planning to crash into the Twin
Towers (Newsweek, May 20 2002).

All of this makes it all the more astonishing - on the war on
terrorism perspective - that there was such slow reaction on September
11 itself. The first hijacking was suspected at not later than
8.20am, and the last hijacked aircraft crashed in Pennsylvania at
10.06am. Not a single fighter plane was scrambled to investigate from
the US Andrews airforce base, just 10 miles from Washington DC, until
after the third plane had hit the Pentagon at 9.38 am. Why not? There
were standard FAA intercept procedures for hijacked aircraft before
9/11. Between September 2000 and June 2001 the US military launched
fighter aircraft on 67 occasions to chase suspicious aircraft (AP,
August 13 2002). It is a US legal requirement that once an aircraft
has moved significantly off its flight plan, fighter planes are sent
up to investigate.

Was this inaction simply the result of key people disregarding, or
being ignorant of, the evidence? Or could US air security operations
have been deliberately stood down on September 11? If so, why, and on
whose authority? The former US federal crimes prosecutor, John Loftus,
has said: "The information provided by European intelligence services
prior to 9/11 was so extensive that it is no longer possible for
either the CIA or FBI to assert a defence of incompetence."

Nor is the US response after 9/11 any better. No serious attempt has
ever been made to catch Bin Laden. In late September and early October
2001, leaders of Pakistan's two Islamist parties negotiated Bin
Laden's extradition to Pakistan to stand trial for 9/11. However, a US
official said, significantly, that "casting our objectives too
narrowly" risked "a premature collapse of the international effort if
by some lucky chance Mr Bin Laden was captured". The US chairman of
the joint chiefs of staff, General Myers, went so far as to say that
"the goal has never been to get Bin Laden" (AP, April 5 2002). The
whistleblowing FBI agent Robert Wright told ABC News (December 19
2002) that FBI headquarters wanted no arrests. And in November 2001
the US airforce complained it had had al-Qaida and Taliban leaders in
its sights as many as 10 times over the previous six weeks, but had
been unable to attack because they did not receive permission quickly
enough (Time Magazine, May 13 2002). None of this assembled evidence,
all of which comes from sources already in the public domain, is
compatible with the idea of a real, determined war on terrorism.

The catalogue of evidence does, however, fall into place when set
against the PNAC blueprint. From this it seems that the so-called "war
on terrorism" is being used largely as bogus cover for achieving wider
US strategic geopolitical objectives. Indeed Tony Blair himself hinted
at this when he said to the Commons liaison committee: "To be truthful
about it, there was no way we could have got the public consent to
have suddenly launched a campaign on Afghanistan but for what happened
on September 11" (Times, July 17 2002). Similarly Rumsfeld was so
determined to obtain a rationale for an attack on Iraq that on 10
separate occasions he asked the CIA to find evidence linking Iraq to
9/11; the CIA repeatedly came back empty-handed (Time Magazine, May 13
2002).

In fact, 9/11 offered an extremely convenient pretext to put the PNAC
plan into action. The evidence again is quite clear that plans for
military action against Afghanistan and Iraq were in hand well before
9/11. A report prepared for the US government from the Baker Institute
of Public Policy stated in April 2001 that "the US remains a prisoner
of its energy dilemma. Iraq remains a destabilising influence
to... the flow of oil to international markets from the Middle
East". Submitted to Vice-President Cheney's energy task group, the
report recommended that because this was an unacceptable risk to the
US, "military intervention" was necessary (Sunday Herald, October 6
2002).

Similar evidence exists in regard to Afghanistan. The BBC reported
(September 18 2001) that Niaz Niak, a former Pakistan foreign
secretary, was told by senior American officials at a meeting in
Berlin in mid-July 2001 that "military action against Afghanistan
would go ahead by the middle of October". Until July 2001 the US
government saw the Taliban regime as a source of stability in Central
Asia that would enable the construction of hydrocarbon pipelines from
the oil and gas fields in Turkmenistan, Uzbekistan, Kazakhstan,
through Afghanistan and Pakistan, to the Indian Ocean. But, confronted
with the Taliban's refusal to accept US conditions, the US
representatives told them "either you accept our offer of a carpet of
gold, or we bury you under a carpet of bombs" (Inter Press Service,
November 15 2001).

Given this background, it is not surprising that some have seen the US
failure to avert the 9/11 attacks as creating an invaluable pretext
for attacking Afghanistan in a war that had clearly already been well
planned in advance. There is a possible precedent for this. The US
national archives reveal that President Roosevelt used exactly this
approach in relation to Pearl Harbor on December 7 1941. Some advance
warning of the attacks was received, but the information never reached
the US fleet. The ensuing national outrage persuaded a reluctant US
public to join the second world war. Similarly the PNAC blueprint of
September 2000 states that the process of transforming the US into
"tomorrow's dominant force" is likely to be a long one in the absence
of "some catastrophic and catalyzing event - like a new Pearl
Harbor". The 9/11 attacks allowed the US to press the "go" button for
a strategy in accordance with the PNAC agenda which it would otherwise
have been politically impossible to implement.

The overriding motivation for this political smokescreen is that the
US and the UK are beginning to run out of secure hydrocarbon energy
supplies. By 2010 the Muslim world will control as much as 60% of the
world's oil production and, even more importantly, 95% of remaining
global oil export capacity. As demand is increasing, so supply is
decreasing, continually since the 1960s.

This is leading to increasing dependence on foreign oil supplies for
both the US and the UK. The US, which in 1990 produced domestically
57% of its total energy demand, is predicted to produce only 39% of
its needs by 2010. A DTI minister has admitted that the UK could be
facing "severe" gas shortages by 2005. The UK government has confirmed
that 70% of our electricity will come from gas by 2020, and 90% of
that will be imported. In that context it should be noted that Iraq
has 110 trillion cubic feet of gas reserves in addition to its oil.

A report from the commission on America's national interests in July
2000 noted that the most promising new source of world supplies was
the Caspian region, and this would relieve US dependence on Saudi
Arabia. To diversify supply routes from the Caspian, one pipeline
would run westward via Azerbaijan and Georgia to the Turkish port of
Ceyhan. Another would extend eastwards through Afghanistan and
Pakistan and terminate near the Indian border. This would rescue
Enron's beleaguered power plant at Dabhol on India's west coast, in
which Enron had sunk $3bn investment and whose economic survival was
dependent on access to cheap gas.

Nor has the UK been disinterested in this scramble for the remaining
world supplies of hydrocarbons, and this may partly explain British
participation in US military actions. Lord Browne, chief executive of
BP, warned Washington not to carve up Iraq for its own oil companies
in the aftermath of war (Guardian, October 30 2002). And when a
British foreign minister met Gadaffi in his desert tent in August
2002, it was said that "the UK does not want to lose out to other
European nations already jostling for advantage when it comes to
potentially lucrative oil contracts" with Libya (BBC Online, August 10
2002).

The conclusion of all this analysis must surely be that the "global
war on terrorism" has the hallmarks of a political myth propagated to
hegemony, built around securing by force command over the oil supplies
required to drive the whole project. Is collusion in this myth and
junior participation in this project really a proper aspiration for
British foreign policy? If there was ever need to justify a more
objective British stance, driven by our own independent goals, this
whole depressing saga surely provides all the evidence needed for a
radical change of course.

Michael Meacher MP was environment minister from May 1997 to June 2003