Downsizing in Disguise

The streets of Baghdad are a swamp of crime and uncollected garbage. Battered local businesses are going bankrupt, unable to compete with cheap imports. Unemployment is soaring and thousands of laid-off state workers are protesting in the streets.

In other words, Iraq looks like every other country that has undergone rapid-fire "structural adjustments" prescribed by Washington, from Russia's infamous "shock therapy" in the early 1990s to Argentina's disastrous "surgery without anesthetic." Except that Iraq's "reconstruction" makes those wrenching reforms look like spa treatments.

Paul Bremer, the US-appointed governor of Iraq, has already proved something of a flop in the democracy department in his few weeks there, nixing plans for Iraqis to select their own interim government in favor of his own handpicked team of advisers. But Bremer has proved to have something of a gift when it comes to rolling out the red carpet for US multinationals.

For a few weeks Bremer has been hacking away at Iraq's public sector like former Sunbeam exec "Chainsaw" Al Dunlap in a flak jacket. On May 16 Bremer banned up to 30,000 senior Baath Party officials from government jobs. A week later, he dissolved the army and the information ministry, putting more than 400,000 Iraqis out of work without pensions or re-employment programs.

Of course, if Saddam Hussein's henchmen and propagandists held on to power in Iraq it would be a human rights disaster. "De-Baathification," as the purging of party officials has come to be called, may be the only way to prevent a comeback by Saddam's crew--and the only silver lining of George Bush's illegal war.

But Bremer has gone far beyond purging powerful Baath loyalists and moved into a full-scale assault on the state itself. Doctors who joined the party as children and have no love for Saddam face dismissal, while low-level civil servants with no ties to the party have been fired en masse. Nuha Najeeb, who ran a Baghdad printing house, told Reuters, "I...had nothing to do with Saddam's media, so why am I sacked?"

As the Bush Administration becomes increasingly open about its plans to privatize Iraq's state industries and parts of the government, Bremer's de-Baathification takes on new meaning. Is he working only to get rid of Baath Party members, or is he also working to shrink the public sector as a whole so that hospitals, schools and even the army are primed for privatization by US firms? Just as reconstruction is the guise for privatization, de-Baathification looks a lot like disguised downsizing.

Similar questions arise from Bremer's chainsaw job on Iraqi companies, already pummeled by almost thirteen years of sanctions and two months of looting. Bremer didn't even wait to get the lights back on in Baghdad, for the dinar to stabilize or for the spare parts to arrive for Iraq's hobbled factories before he declared on May 26 that Iraq was "open for business." Duty-free imported TVs and packaged food flooded across the border, pushing many stressed Iraqi businesses, unable to compete, into bankruptcy. This is how Iraq joined the global "free market": in the dark.

Paul Bremer is, according to Bush, a "can-do" type of person. Indeed he is. In less than a month he has readied large swaths of state activity for corporate takeover, primed the Iraqi market for foreign importers to make a killing by eliminating much of the local competition and made sure there won't be any unpleasant Iraqi government interference--in fact, he's made sure there will be no Iraqi government at all while key economic decisions are made. Bremer is Iraq's one-man IMF.

Like so many Bush foreign policy players, Bremer sees war as a business opportunity. On October 11, 2001, just one month after the terror attacks in New York and Washington, Bremer, once Ronald Reagan's Ambassador at Large for counterterrorism, launched a company designed to capitalize on the new atmosphere of fear in US corporate boardrooms. Crisis Consulting Practice, a division of insurance giant Marsh & McLennan, specializes in helping multinationals come up with "integrated and comprehensive crisis solutions" for everything from terror attacks to accounting fraud. Thanks to a strategic alliance with Versar, which specializes in biological and chemical threats, clients of the two companies are treated to "total counterterrorism services."

To sell this sort of high-priced protection to US firms, Bremer had to make the kinds of frank links between terrorism and the failing global economy that activists are called lunatics for articulating. In a November 2001 policy paper titled "New Risks in International Business," he explains that free-trade policies "require laying off workers. And opening markets to foreign trade puts enormous pressure on traditional retailers and trade monopolies." This leads to "growing income gaps and social tensions," which in turn can lead to a range of attacks on US firms, from terrorism to government attempts to reverse privatizations or roll back trade incentives.

He could be describing the backlash his own policies are provoking in Iraq. But then guys like Bremer always know how to play both sides. Like a hacker who cripples corporate websites then sells himself as a network security specialist, in a few months Bremer may well be selling terrorism insurance to the very companies he welcomed into Iraq.

And why not? As Bremer told his clients back at Marsh, globalization may have "immediate negative consequences for many," but it also leads to "the creation of unprecedented wealth."

It has for Bremer and his cronies. On May 15, three days after he arrived in Iraq, his former boss, MMC chairman Jeffrey Greenberg, announced that 2002 "was a great year for Marsh; operating income was up 31 percent.... Marsh's expertise in analyzing risk and helping clients develop risk management programs has been in great demand.... Our prospects have never been better."

Many have pointed out that Bremer is no expert on Iraqi politics. But that was never the point. He is an expert at profiting from the war on terror and at helping US multinationals make money in far-off places where they are unpopular and unwelcome. In other words, he's the perfect man for the job.