The neoliberal transformation of Iraq is portrayed as a humanitarian venture. Western corporations and occupying governments now talk of the liberation of Iraq from the "tyranny of Saddam's planned economy."
On the day that major hostilities were declared over, British Prime Minister Tony Blair told the Iraqi people: "Saddam Hussein and his regime plundered your nation's wealth. While many of you live in poverty, they have the lives of luxury. The money from Iraqi oil will be yours-to be used to build prosperity for you and your families."
This has turned out to be another shameless lie. Saddam's regime was undoubtedly corrupt, in the sense that he established a system of patronage and rewards for the élite that remained closest to him. But the scale and intensity of the corruption and fraud perpetrated by the occupation forces is unprecedented in modern history.
The largest part of the money spent by the U.S.-British occupation was not U.S. or international donor funds, but oil revenue that belongs to the Iraqi people. During the period of direct rule, the U.S. spent, or committed to spend, around US$19.6 billion, most of which was disbursed to U.S. corporations.
Of this expenditure, $8.7 billion is unaccounted for. From the available evidence, we know that much of it has vanished into the hands of corporations, corrupt public officials, and élite Iraqi deal-fixers.
During the 14 months of its existence, the Coalition Provisional Authority (CPA)-the body set up to rule Iraq and headed up by Bush favourite Paul Bremer-issued 100 legal orders by decree. Those orders, implemented without the consent of the Iraqi people, represent a pure form of neoliberal orthodoxy that has had profound and irreversible consequences for the Iraqi economy.
The explicit aim was to promote fast entry into Iraq's oilrich economy. Order 39 permitted full foreign ownership of more than 200 state-owned assets and enterprises, including electricity, telecommunications, and the pharmaceuticals industry, as well as banks, mines, and factories. The decree allowed the new private owners to move their profits out of the country.
Order 81 created a patent regime to ensure that agriculture would depend on foreign agri-biotech firms. It outlawed the sharing of seeds, forcing farmers to use the protected varieties sold to them by transnational corporations.
The biggest scandal involves reconstruction contracts. In one period between 2003 and 2004, more than 805 prime contracts were given to U.S. firms, with the remainder split between British, Australian, Italian, Israeli, Jordanian, and Iraqi firms. (One source estimates the total received by Iraqi firms during the CPA's rule at around 2%.)
The CPA managed to concentrate funds in the hands of U.S. firms by issuing non-competitive bids. From records of expenditure, we can estimate that …