Iraq: Coalition of the Drilling (3)

This is the third and last sequence of The Iraq: Coalition of the Drilling series.

The new Iraqi Constitution legalizes plundering of it's oil resources by foreign companies

Joshua Holland on AlterNet:

Of course, the plans for Iraq's legal framework for oil have to be viewed in the context of the overall transformation of the Iraqi economy. Clearly, the idea was to pursue a radical corporatist agenda during the period of the Coalition Provisional Authority when the U.S. occupation forces were a de facto dictatorship. And that's just what happened; under L. Paul Bremer, the CPA head, corporate taxes were slashed, a flat-tax on income was established, rules allowing multinationals to pull all of their profits from the country and a series of other provisions were enacted. These were then integrated into the Iraqi Constitution and remain in effect today.

Among the provisions in the Constitution, unlike those of most oil producers, is a requirement that the government "develop oil and gas wealth … relying on the most modern techniques of market principles and encouraging investment." The provision mandates that foreign companies would receive a major stake in Iraq's oil for the first time in the 30 years since the sector was nationalized in 1975.

Herbert Docena, a researcher with the NGO Focus on the Global South, wrote that an early draft of the constitution negotiated by Iraqis envisioned a "Scandinavian-style welfare system in the Arabian desert, with Iraq's vast oil wealth to be spent upholding every Iraqi's right to education, health care, housing, and other social services." "Social justice," the draft declared, "is the basis of building society."

June 2, 2004: celebration of the new "Iraqi" consitution with Alawi, Chalabi and Brahimi (photo: New York Times)

What happened between that earlier draft and the constitution that Iraqis would eventually ratify? According to Docena:

While [U.S. Ambassador to Iraq Zalmay] Khalilzad and his team of U.S. and British diplomats were all over the scene, some members of Iraq's constitutional committee were reduced to bystanders. One Shiite member grumbled, "We haven't played much of a role in drafting the constitution. We feel that we have been neglected." A Sunni negotiator concluded: "This constitution was cooked up in an American kitchen not an Iraqi one."

With a constitution cooked up in D.C., the stage was set for foreign multinationals to assume effective control of as much as 87 percent of Iraq's oil, according to projections by the Oil Ministry. If PSAs become the law of the land -- and there are other contractual arrangements that would allow private companies to invest in the sector without giving them the same degree of control or such usurious profits -- the war-torn country stands to lose up to 194 billion vitally important dollars in revenue on just the first 12 fields developed, according to a conservative estimate by Platform (the estimate assumes oil at $40 per barrel; at this writing it stands at more than $59). That's more than six times the country's annual budget.

Now we know, what it meant, "Staying the Course".

The course was and is: control over the Iraqi oil reserves and - production, as well as its commercialisation. Keeping the Chinese and the Indians (and the Europeans) out, influence the OPEC cartel. What the US needs in Iraq, is "stabilization". No matter, if that stabilization takes the shape of a dictatorship, a democracy, a loose confederacy of three or four small states, - whatever. As long as they do not intervene into the oil business.

All the other talk, starting with the WMD and continuing with the so-called mission of imposing democracy, is empty noise, serving the manipulation of public opinion.

In this respect, Bush was right, for once, when he said that "staying the course" means changing the tactics, as often as the hidden goal of the intervention is endangered.

But the Iraqi- and the other Middle East elites are not as dumb as Cheney and the Neocons think: An Americanization of the Iraqi oil resources will be experienced by Saudis, Iranians, even Kowaitians and Nigerians, as a direct attack against their vital interests. China, India and Russia will not hesitate to lend them support.

The Big Oil Struggle is only just beginning.