Skip to comments.America Puts Iraq Up For Sale
Posted on 09/21/2003 2:45:03 PM PDT by blam
America puts Iraq up for sale
By Philip Thornton in Dubai and Andrew Gumbel
22 September 2003
Iraq was in effect put up for sale yesterday when the US-backed administration announced it was opening up all sectors of its economy to foreign investors in a desperate attempt to deliver the much-needed reconstruction.
In an unexpected move unveiled at the meeting of the Group of Seven rich nations in the Middle East, the Iraqi Governing Council, appointed by the US occupiers, announced sweeping reforms to allow total foreign ownership without the need for prior approval.
The move, accompanied by swingeing cuts in taxes and tariffs, is likely to fuel concerns that Iraq is being turned into a golden opportunity for profiteering by multinational corporations relying on political connections. Already, the biggest reconstruction contracts have been allocated to major US firms such as Bechtel and Halliburton, which have ties to the Bush administration. They were selected behind closed doors, with no opportunity for competitors to present bids.
It is also a dramatic departure from Saddam Hussein's centralised management of the Iraqi economy, which was reasonably successful in capitalising on the country's oil wealth to build state-of-the-art hospitals, schools and other infrastructure, at least until the upheavals of the Iran-Iraq war, the 1991 Gulf War and the imposition of United Nations sanctions from 1991.
One Arab expert, who asked not to be named, said: "There's a fear that privatisation of too many things will lead to things being sold off for a mess of potage."
Kamel al-Gailani, the Finance Minister in the provisional government, said the moves were part of a policy of opening Iraq to free market competition that would deliver investment, job creation and long-term economic growth. It will apply to everything from industry to health and water.
"We are providing Iraqi citizens with the freedom and opportunities they were denied for so long under the Baath party to realise their economic potential," he said. "The reforms will advance efforts to build a free and open market economy in Iraq, promote Iraq's future economic growth, [and] accelerate Iraq's re-entry into the international economy and reintegration with other countries."
The moves presented by Mr Gailani, approved by the US and UK's coalition provisional authority, include:
* 100 per cent foreign ownership in all sectors except natural resources;
* direct ownership as well as joint ventures and setting up branches;
* full, immediate remittance to the host country of profits, dividends, interest and royalties;
* no condition on the need to source products locally;
* no need for clearance for foreign investment.
The council plans to allow six overseas banks to snap up local banks over the next five years, after which there will be no limit on the amount of foreign ownership. Although banks will have to stump up $25m (£15m) capital requirement, there is no restriction on where money is invested. Privatisation of everything from electricity and telecommunications to pharmaceuticals and engineering could see hundreds of previously state-owned companies sold off.
There will be a tax holiday for the rest of this year, and income and business taxes for investors will be capped at 15 per cent from next year. Iraq will cut its trade tariffs to show it is a "country that embraces free trade". A 5 per cent surcharge will be charged on all imports, other than humanitarian goods such as food, medicine and books, to fund the reconstruction effort.
The US defended the decision to offer such a generous package of tax breaks to entice investors. "Capital is a coward," said John Snow, US Treasury Secretary. "It doesn't go places where it feels threatened. Companies will not send employees to places that aren't secure."
Iraq's vast oil reserves - the world's second largest after Saudi Arabia's - would remain in government hands. "They're going to run government finances based on oil revenues," Mr Snow said.
Five months after the overthrow of Saddam, despite billions of dollars worth of contracts won by American companies, there are no visible signs of reconstruction. Clean water and electricity are still not available to most people.
Complete and utter horse methane. Even the most pessimistic of media admit that the power is on almost constantly all over the country, and that the water system is on constantly. If it were NOT, you can bet it would be in every news report. There is lots of visible construction and re-construction in every part of the country. This guy is just another Baghdad Bob.
Yes, they are reporting the truth insofar as reporting that the United States and the Coalition are doing everything possible to make Iraq attractive to capital investment; which is absolutely vital to any developing country, indeed to any economically healthy country whatsoever. The fact that they are clearly upset about this, and consider such provision for future Iraqi prosperity a betrayal of Iraq (not to mention their embedding this editorial perspective in what is supposedly a news story) clearly indicates their over-the-top, extremist, far-left perspective.
Please point out to me any of their "blatant Lies" and I'd be glad to examine them.
No visible signs of reconstruction? Please! It's all over the country. Hell, I watched the four day C-SPAN special on "Rebuidling Iraq" and saw it for myself, both work well in progress and completed work, and that was nearly 3 months ago!
Because there is no apparent motivation in subverting the creation of a free and successful Iraq through blatantly slanted and false reporting except for love of totalitarianism or hatred of America (or of liberal civilization generally).
Newbie, anti-capitalist, potential disrupter. Keep an eye on this one.
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