Editore"s Note
Tilting at Windmills

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January 18, 2004
By: Kevin Drum

TRADE SHOWS FOR IRAQ....Hey, it turns out the Iraqi reconstruction effort has its own trade show! And it comes complete with its own military/technical-ish capital letter thrown into the middle of the name: ReBuilding Iraq 2. Naomi Klein covered it for the Guardian:

Microsoft is determined to get in on the ground floor. In fact, it is so tight with Iraq's governing council that one Microsoft executive, Haythum Auda, was the official translator for the council's minister of labour and social affairs, Sami Azara al-Ma'jun, at the conference. "There is no hatred against the coalition forces at all," al-Ma'jun says, via Auda. "The destructive forces are very minor and these will end shortly ... Feel confident in rebuilding Iraq!"

Anyway, it turns out that the biggest problem for the private sector, perhaps unsurprisingly, is that insurance companies are a wee bit reluctant to offer coverage for work in Iraq these days. To the rescue rides Opic, a U.S. government agency willing to go where no private insurance firm is willing to go:

For the non-US firms in the room, Opic's announcement is anything but reassuring: since only US companies are eligible for its insurance, and the private insurers are sitting it out, how can they compete? The answer is that they likely cannot. Some countries may decide to match Opic's Iraq programme. But, in the short term, not only has the US government barred companies from non-"coalition partners" from competing for contracts against US firms, it has made sure that the foreign firms that are allowed to compete will do so at a serious disadvantage.

The reconstruction of Iraq has emerged as a vast protectionist racket, a neo-con New Deal that transfers limitless public funds - in contracts, loans and insurance - to private firms, and even gets rid of the foreign competition to boot, under the guise of "national security". Ironically, these firms are being handed this corporate welfare so they can take full advantage of CPA-imposed laws that systematically strip Iraqi industry of all its protections, from import tariffs to limits on foreign ownership. Michael Fleisher, head of private-sector development for the CPA, recently explained to a group of Iraqi businesspeople why these protections had to be removed. "Protected businesses never, never become competitive," he said. Quick, somebody tell Opic and US deputy secretary of defence Paul Wolfowitz.

This is Naomi Klein writing, so take the rhetoric with a grain of salt. But it does go to show once again how foolish it was to publicly announce that non-coalition companies couldn't bid for contracts in Iraq. After all, we have plenty of other levers to pull to make sure that Americans get the bulk of the contracts.

Kevin Drum 12:01 PM Permalink | Trackbacks

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