Journalism Research and Random Meanderings

Tuesday, December 28, 2004

U.S. to Take Bigger Bite of Iraq's Economic Pie 

Still wondering why the U.S. invaded Iraq? This story is much more balanced than I made it appear here but doesn't shy away from objectively pointing out the economic controls being put in place.

CHALLENGES 2004-2005: U.S. to Take Bigger Bite of Iraq's Economic Pie

by Emad Mekay

"WASHINGTON, Dec 23 (IPS) - The United States is helping the interim Iraqi government continue to make major economic changes, including cuts to social subsidies, full access for U.S. companies to the nation's oil reserves and reconsideration of oil deals that the previous regime signed with France and Russia.

.....

The government, which is supposed to be replaced after elections scheduled for January, will also pass a new law that will further open Iraq's huge oil reserves to foreign companies. U.S. firms are expected to gain the lion's share of access in a process estimated to be worth billions of dollars.


.....

Abdel Hadi, formerly a member of the exile Iraqi opposition, said the interim government will also reconsider deals signed between French and Russians oil firms and the regime of former President Saddam Hussein. It is still not clear whether those contracts will be cancelled altogether or just reduced.

France and Russia both opposed the March 2003 U.S.-led invasion of the Arab country and companies from those nations were initially banned by the U.S. occupation administration, the Coalition Provisional Authority (CPA), from helping to "rebuild" Iraq.

Washington later said non-U.S. firms could work there, after the world's rich nations agreed to forgive part of Iraq's debt, a decision that opened the door to Baghdad signing on to a loan programme designed by the International Monetary Fund (IMF).

But to date all contracts let for "reconstruction" by the U.S. Agency for International Development (USAID) have gone to U.S. firms, which have then subcontracted some work to foreign companies.

...

The IMF has been notorious for imposing conditions that its economists say are necessary to slash nation's budget deficits.

Development groups and anti-poverty campaigners argue those measures favour corporations in the most industrialised nations while harming the poor and middle class in borrowing countries.

The programme with Iraq appears to be no different.

Called the "enhanced post-conflict facility," the IMF programme bestows 420 million dollars in loans to the Iraqi government as a first step, promising more in 2005 if the nation meets more demanding conditions.

The IMF, which is dominated by the United States and other rich nations, has said it is willing to loan Iraq 2.5-4.3 billion dollars over three years now that an internationally recognised government is in place in the nation."

Is the U.S. trying to make Iraq a debt-slave to an organisation (the IMF) where it is confident of its influence?

===PB===