With the major justifications for the U.S.-led invasion of Iraq -- the former regime’s supposed possession of weapons of mass destruction and ties to the terrorist Al-Qaeda network -- now discredited, and claims of wanting to created a democratic Iraq highly dubious, this raises the question as to what actually motivated the United States to take on the problematic task of conquering and rebuilding that country.
To embrace the simplistic notion that it was done simply for the sake of the profits of American oil companies ignores the fact that even the most optimistic early projections of the financial costs of the invasion and occupation far exceed any additional profits that could have been reaped in the foreseeable future. Furthermore, Saddam Hussein was certainly willing to sell his oil at a reasonable enough price to satisfy Western buyers and his standing among fellow OPEC members was too low at that point to have wielded sufficient influence to successfully push the cartel to adopt policies detrimental to American interests.
This is not to say, however, that economic factors did not play an important role in prompting a U.S. invasion.
A Return to Direct Military Interventionism
Until the buildup to the U.S. invasion, many had projected that efforts by the United States to overthrow sovereign governments -- either through covert action, through direct military intervention, or through the use of proxy armies -- was a thing of the past.
This was not a result of a greater respect for international law; indeed, being the sole remaining superpower has allowed the United States to push international legal norms even further than ever. Nor was it as some speculated a result of the end of the “Soviet threat,” since many of these governments that had fallen victim to U.S. intervention were simply nationalist and non-aligned, not Communist, and superpower rivalry was less the reason than it was the excuse.
Rather, it was a reflection that with the neo-liberal model dominating the global economy -- enforced through international financial institutions such as the World Trade Organization (WTO), the International Monetary Fund (IMF) and the World Bank -- such crude forms of hegemonic domination were no longer necessary. For example, if the FMLN in El Salvador or the Sandinistas in Nicaragua had won their debt-ridden countries’ most recent elections, there is little doubt that they would have been unable to restructure their economies in the socialist direction they had attempted twenty years earlier. Such limitations on the economic autonomy of contemporary national governments are not restricted to small agrarian states. Today’s Socialist-led government of Ricardo Lagos in Chile bears little resemblance to the Socialist-led government of Salvador Allende in the early 1970s, and the electoral triumph of the Workers Party in Brazil and the African National Congress in South Africa has been disappointing to those who had hoped for a significant reduction in the staggering levels of poverty, social stratification and economic injustice afflicting those countries.
The IMF through its Structural Adjustment Programs has been able to do legally and openly what in previous decades had to be done through the CIA, the Marines, or hired mercenaries. The hegemony of American capitalism and its industrialized allies had reached unprecedented levels without the messiness of direct military intervention.
This can also explain the end of the left-leaning nationalism that was once common in the Arab world, with Egypt, Algeria, Sudan, Yemen, and to a somewhat lesser extent Syria and Libya abandoning their semi-socialist policies to embrace what are euphemistically referred to as “free market reforms.” Along with that has come a significant reduction in their anti-Western rhetoric, support for terrorists and radical insurgents, and other measures disturbing to Washington.
Baathist Iraq, however, was the only Arab state to largely resist such trends. Iraq, not coincidentally, is also the only Arab country to combine a sizable educated population, large oil resources, and adequate water supplies, thereby making it possible for Baghdad to maintain a truly independent foreign and domestic policy. Even twelve years of draconian sanctions could not overthrow the government or make the regime more willing to cooperate with Washington’s strategic and economic agenda.
As a result, the United States felt obliged to revert to cruder forms of intervention.
This is not to imply that Saddam Hussein’s regime was anything close to being a progressive model for Third World development. Indeed, his brand of Baathism was arguably the closest thing to true fascism that has existed anywhere in the world in recent decades. Whatever the nature of his regime, however, Saddam was clearly failing to adhere to the U.S. program.
As a result, the United States was determined to set up a new order where this important country would have no choice but to play by be America’s rules. Since making an occupied nation formally part of its conqueror’s territory is not generally considered to be acceptable anymore (U.S. allies Morocco and Israel notwithstanding), a less formal system of control needed to be set up. Indeed, the U.S. plan for Iraq bore a striking resemblance to the British role in that country following the collapse of the Ottoman Empire, where -- rather than formally annexation the territory -- they occupied it just long enough to establish a kind of suzerainty where, even though the Iraq was nominally “independent” within a couple of years, they could effectively veto the establishment of an unfriendly government and dominate the economy.
The United States followed a similar pattern with Cuba following its “liberation” by U.S. forces from the Spaniards in 1898. After several years of occupation, the U.S. granted formal independence to the island while maintaining it as a de facto protectorate, a system which lasted for more than five decades until this arrangement was overthrown in Fidel Castro’s 1959 revolution, less than a year after nationalist military officers in Baghdad ousted the monarchy placed in power by the British. Though it has been more than forty-five years since the U.S.-backed dictator Fulgencio Batista fled Havana, Washington still cannot accept a truly independent Cuba and still withholds diplomatic recognition.
A Crusade for Neo-Liberalism?
Under Coalition Provisional Authority chairman Paul Bremer, radical changes were imposed upon the Iraqi economy which closely follows the designs of the infamous structural adjustment programs imposed upon indebted nations by the International Monetary Fund. These include:
the widespread privatization of public enterprises, which -- combined with allowing for 100% foreign ownership of Iraqi companies -- places key sectors of the Iraqi economy into the hands of American corporations
the imposition of a 15% flat tax, which primarily benefits the wealthy and places a disproportionate burden on the poor
the virtual elimination of import tariffs, resulting in a flood of foreign goods into the country; with the smaller Iraqi companies weakened by over a dozen years of sanctions unable to compete, hundreds of factories have been shut down, adding to the already-severe unemployment
allowing for 100% repatriation of profits, thereby severely limiting re-investment into the Iraqi economy
the lowering of the minimum wage, increasing already widespread poverty
leases on contracts for as long as forty years, making it impossible for even a truly sovereign government to legally make alternative arrangements
It is noteworthy that one Saddam-era law that U.S. authorities did not overturn was the ban on public sector unions. U.S. occupation forces have violently broken up peaceful demonstrations by trade union activists.
It is also important to note that the supposedly sovereign government of Iraq which formally took the reins of power June 28 does not have the authority to overturn these laws.
Explaining the U.S. invasion of Iraq in terms of imposing militarily what the IMF could not impose itself, however, may only be part of the story.
A New Mercantilism
Skeptics of claims that the United States invaded Iraq for its oil correctly observe that the United States is less dependent on Persian Gulf oil than European or East Asian countries. However, controlling Iraq which is the largest Arab country in the Gulf region, contains the world’s second largest oil reserves, and borders three of the world’s five largest oil producers would give the United States enormous leverage. In the coming decades, in the event of a trade war with the European Union or a military rivalry with an ascendant China, having effective control over Persian Gulf oil would give the United States enormous leverage.
The invasion of Iraq, then, may represent not just a frightening repudiation of the post-World War II international system embodied in the United Nations Charter, but a return to 19th century great power politics of imperial conquest to control key economic resources.
In direct contravention of WTO regulations -- which the United States insists upon rigorously enforcing against other nations -- U.S. occupation forces have restricted investment and reconstruction efforts almost exclusively to countries which supported the U.S. invasion. Similarly, following the U.S. conquest in March 2003, American contractors and their employees were given preference in lucrative reconstruction efforts over Iraqi companies and Iraqi nationals. In addition, from power stations to telecommunication, U.S. designs are replacing Iraqi and European systems.
Bremer’s replacement, U.S. ambassador John Negroponte, is not as the Bush Administration has claimed just like any other ambassador: many of the more than 1500 Americans attached to his “embassy” hold prominent positions in virtually every Iraqi ministry and his office controls much of the Iraqi government’s budget. (Negroponte had actually had some practice for this sort of thing: He was widely considered to be at least the second most powerful man in Honduras when he was U.S. ambassador in Tegucigalpa in the 1980s as a result of the large numbers of American troops in the country and the dependence of the military-dominated regime on U.S. military and economic backing.)
The U.S. conquest of Iraq could perhaps be seen as a more blatant example of the more subtle shifts in U.S. policy noted in recent international economic forums: Unlike the Clinton administration’s ambitious efforts to rewrite global trade rules so to impose a kind of free market fundamentalism on the world, the Bush administration has been more inclined to advance the more parochial interests of U.S.-based corporations.
If the invasion of Iraq was indeed based upon the lack of other means to impose American hegemonic interests upon the country, it may portend even more serious conflicts in the future: There are two other Third World countries that share with Iraq this combination of having a large educated population, enormous oil reserves, and adequate water resources, thereby enabling their governments to embrace an independent foreign and domestic policy. Not surprisingly, these countries have also been at the receiving end of increasingly hostile rhetoric from the U.S. government.
They are Iran and Venezuela.
However, it is unlikely that either has to fear a U.S. invasion any time soon for the simple reason that Iraq is turning into a total disaster.
While there is little question that some liberalization and restructuring of Iraq’s economy, after years of state control under Saddam’s dictatorship, is necessary for the country’s economic health, Iraqis resent such important economic issues being decided by an occupying power which clearly has a strong vested economic interest in their country. Indeed, along with the violence and lack of basic services, the primary grievance of Iraqis toward the U.S. occupation is the perception that the Americans are simply trying to rip them off.
Like many Arab governments, Iraq under Saddam Hussein squandered billions of dollars’ worth of the nation’s wealth through corruption and wasteful military spending. Despite that, however, prior to Saddam’s ill-fated invasion of Kuwait and the resulting war and sanctions, Iraqis enjoyed one of the highest rankings in the Third World in terms of the Human Development Index, which measures nutrition, health care, housing, education, and other human needs.
Not only has the U.S. occupation failed to raise Iraqis up to their pre-1991 standard of living, most of them are poorer now than they were during more than a decade of sanctions following the devastating U.S.-led bombing campaign of the Gulf War. After all the enormous suffering that the United States and its allies inflicted upon the Iraqi people during the final dozen years of Saddam’s rule, the failure to improve things since his ouster has understandably led to widespread resentment. It is no accident that at a time when over half the population, many of whom are skilled workers, are unemployed, overpaid foreign contractors most of whom are doing jobs that Iraqis could do have become targets of the resistance.
While Saddam Hussein may have been to Baathism what Josef Stalin was to Marxism, that does not mean that most Iraqis reject the anti-imperialist and semi-socialist orientation embraced by every Iraqi government that ruled between the 1958 overthrow of the British-installed Hashemite monarchy and the 2003 U.S. invasion.
A poll this past spring revealed that 65% of Iraqis would prefer a largely-state controlled economy and government subsidies of basic services, while only 6.6% support a free-market system where private entrepreneurs have unrestricted access to the economy.
The widespread feeling that the United States is after their nation’s wealth and putting the profits of well-connected American companies over the livelihoods of ordinary Iraqis has fueled the very armed resistance that has made any attempt at rebuilding -- by any economic model -- virtually impossible. As a result, the United States may have no more success imposing its free market utopia on the Iraqis than the Soviets had in imposing their socialist utopia on the Afghans.
Stephen Zunes is a professor of Politics and chair of the Peace & Justice Studies Program at the University of San Francisco. He serves as Middle East editor for the Foreign Policy in Focus Project and is the author of Tinderbox: U.S. Middle East Policy and the Roots of Terrorism (Common Courage Press, 2003)