Open Fire and Open Markets - Strategy of an Empire

by Anuradha Mittal

Backgrounder newsletter, Food First, Summer 2003


Once, empires were built through direct conquest. Armies plundered their way across continents, claiming to bring the light of civilization to the savages of dark continents. Beneath it all, always, was the dispossession of millions for the enrichment of a few.

Imperial America's foreign policy is no different. With the demise of the Soviet Union in 1991, the United States emerged as the uncontested solo superpower in the world. Having achieved a "pre-eminence not enjoyed by even the greatest empires of the past,"' the US is focused on securing its power globally, through both military and market interventions. America's "war for freedom" or "war on terrorism" is at one with its expansionary goals for the market: open invasion in some places, and open markets everywhere! Successive US administrations have used the rhetoric of economic freedom and opportunity to describe this policy: "free trade," "liberalization," "deregulation," "globalization." It is pushed ~ when necessary at the point of a gun-for countries the world over. This is the new Monroe Doctrine, underlying the empire's foreign policy-that the United States will dominate affairs around the world-expressed here in terms of economics, with the ubiquitous military underpinnings left discreetly in the background, unspoken, because there is no need to speak of them.

Eruptions of armed aggression by the US should not distract us from the underlying logic of economic imperialism. Recolonization of the South by the US is a carefully crafted strategy. First it cut its UN contributions. Then it shrank aid to the Third World, using its trade agenda as a justification. It uses both carrots-trade agreements for acquiescent states like Israel and Jordan, military aid and graft for once "friendly" Iraq and Afghanistan-and sticks-embargoes and bombs for noncompliant nations such as Cuba and out-of-favor Afghanistan and Iraq. Today we see an escalation of both these techniques.

Open Invasion: The Truth Behind Operation Iraqi Freedom

"Even though the war has not completely ended, we are already started on the process of rebuilding Iraq.... Thanks to the speedy success of the military operation, the task we face has turned out to be very different. There is no humanitarian crisis in Iraq."


The imperialist big picture for Iraq goes beyond reconstruction. It is to create a dream economy, completely privatized and foreign-owned, within a year of invasion and without waiting for a new government. Tim Carney, senior adviser to the Iraqi ministry of industry and minerals, said the coalition planned to start privatizations as soon as an interim administration was in place and heralded privatization as "the right direction for twenty-first-century Iraq."

As the US set up Iraq's interim administration (headed by an American official), the war on Iraq was shadowed by a battle among American corporations to win reconstruction contracts. Headlines of entrepreneurial websites read: "Iraq Construction Spells Opportunity. Small Businesses are lining up to win Contracts for the Rebuilding of Iraq: Have you taken a Number Yet?" Lobbyists with resumes reflecting years with the CIA and the military appeared to advise and open highly lucrative doors for their clients in postwar Iraq. One such adviser declared, "Iraq is going to be Afghanistan on steroids as far as nation-building is concerned. There are a lot of opportunities emerging in a full range of sectors."

Not all such opportunities are open to all. Before the war, in early March, USAID secretly asked six US companies to submit bids for $900 million in government contracts to repair and reconstruct water systems, roads, bridges, schools, and hospitals. Coincidentally, the six companies-Bechtel Group Inc., Fluor Corp., Halliburton Co., Louis Berger Group Inc, Parsons Corp., and Washington Group International Inc.-were also generous contributors of $3.6 million dollars in individual, PAC, and soft money donations between 1999 and 2002, 66 percent of which went to Republicans.

In late March, the first contract was awarded, without competition or detailed explanations of total cost, to Vice President Dick Cheney's old employer, the Kellogg Brown & Root (KBR) unit of Halliburton Co. Halliburton contributed $708,770 between 1999 and 2002, 95 percent of it to Republicans. USAID also awarded a $4.8 million contract to manage the Umm Qsr ports in southern Iraq to Stevedoring Services of America (SSA), a private company and the country's largest marine terminal operator, 77 percent of whose contributions between 1999 and 2002 went to Republicans.

Bechtel landed the largest USAID contract: an initial award of $34.6 million, with funding of up to $680 million over 18 months subject to congressional approval." Former Secretary of State George Shultz, a Bechtel board member, is also chair of the advisory board of the Committee for the Liberation of Iraq. Other Bechtel executives with Bush administration ties include senior vice-president Jack Sheehan, who sits on the Defense Policy Board formed to advise Defense Secretary Donald Rumsfeld, and Bechtel chairman Riley Bechtel, a member of the President's Export Council, which advises the White House on international trade matters.

The most hotly contested contracts will be to rebuild Iraq's oil industry. The empire has left the selling of Iraq's oil resources-the world's second-largest- to Iraqi National Congress leader Ahmad Chalabi and former Iraqi petroleum ministry officials. Last year, Chalabi, whose close ties with Richard Perle, Rumsfeld, and Cheney predate the current Bush administration, met with US oil executives. Afterward, Chalabi made it clear he would give preference to an American-led oil consortium, and suggested that previous deals with Russia and France totaling billions of dollars could be voided.

But remaking the global oil market is not necessarily the endgame: rebuilding Iraq the way corporations want is. Transfer of public goods to private hands in Iraq is intended as an initial step in widespread privatization in the region. Conservative arguments have tended this way for months. An op-ed in the Wall Street Journal headlined "Taking Iraq Private," by Robert McFarlane, national security adviser during the Reagan administration, and Michael Bleyzer, chief executive of an equity fund management company, argued that "the US and its allies would be well advised to put together a team of private sector business leaders as a 'steering committee' to supervise and monitor economic restructuring."

Similarly, in a paper presented last fall at a conference convened by the right-wing Heritage Foundation (and revised in March 2003), Ariel Cohen and Gerald O'Driscoll wrote: "To rehabilitate and modernize its economy, a post-Saddam government will need to move simultaneously on a number of economic policy fronts, utilizing the experience of privatization campaigns and structural reform in other countries." The authors assert what they call Lesson No. l: "Privatization Works Everywhere." This despite recent signs from, of all places, the World Bank, that privatization hasn't lived up to any of its promises.

Privatization does work for the empire, though. Almost overnight, Baghdad has been turned into a vast emporium of imported goods in a McDonaldized Iraq, ruled by western overlords and serviced by US corporations. And there is the other side to the invasion of Iraq. While contracts have been guided like smart bombs into the laps of large corporations, thousands of Iraqi civilians have been terrorized, humiliated, maimed, injured, and killed through British and American bombing and gunfire in civilian areas. Communities and families have been devastated by the military invasion, rivers have been polluted, and disease and hunger are rampant in the country. Food warehouses, electrical grids, and hospitals have been ransacked and burned to the ground.

The Middle East: On the Threshold of Change?

President Bush linked war and trade in his commencement speech at the University of South Carolina on May 9. After trumpeting victory in Iraq, he unveiled his plans to create a US-Middle East Free Trade Area (MEFTA) within a decade," the proposed goal being "to bring the Middle East into an expanding circle of opportunity, to provide hope for the people who live in that region. As trade expands and knowledge spreads to the Middle East...all peoples of that region will see a new day of justice and a new day of prosperity."

Quite simply, imperial America needs to deliver the Middle East to free trade. The region includes many of the most closed and protected economies in the world. Half of the 22 members of the Arab League, including Saudi Arabia, Syria, Lebanon, and Algeria, remain outside the World Trade Organization (WTO). Most of the region's countries have a long-standing economic boycott against Israel, while Iran, Syria, and Libya face US economic sanctions. Further, the region's import tariffs are among the highest in the world, averaging more than 20 percent, with strict restrictions on foreign investment.

Quite simply, imperial America needs to deliver the Middle East to free trade.

Mr. Bush is keen to help so-called "reforming" countries negotiate bilateral investment and "free" trade treaties and become members of the WTO. The US wants to conclude a trade pact with Morocco by the end of 2003, and hopes to start negotiations with Bahrain soon. Egypt was to get a trade pact as a reward for its help in the Iraq war (and in part because the US views Egypt as the heart of the Arab world).'9 However, when Egypt chose not to join the US complaint at the WTO against Europe's ban on genetically modified foods, the US retaliated by suspending trade talks-a harsh reminder that "you are either with us or against us."

International financial institutions-the empire's economic generals are also racing to bring "free" trade initiatives to the Middle East. The World Economic Forum (WEF), comprising high-profile corporate and government leaders, organized the "Global Reconciliation" summit in Amman, Jordan from June 21 to 23, 2003. President Bush dispatched Secretary of State Colin Powell and US Trade Representative Robert Zoellick to seize this "historic opportunity" to expand freedom and increase prosperity in the Middle East. European Trade Commissioner Pascal Lamy emphasized the need for a roadmap to build trade in the region. "If the roadmap works, and peace returns, then Bob Zoellick and I must be the road construction workers," he said.

The World Bank and the International Monetary Fund (IMF), eager to work in the region, have scheduled their next annual meeting for September 2003 in Dubai's Gulf City. The IMF dedicated the March issue of its quarterly magazine, Finance and Development, to the region, with article after article advising the region's countries to dismantle their social protection systems and reduce their public sectors. Finally, trade ministers from a select two dozen of the WTO's 146 members, including Zoellick and Lamy, met at a WTO mini-ministerial in Egypt on June 21 to 22, 2003, in preparation for the WTO September 2003 ministerial in Cancun, Mexico.

Open Season on the Poor: The War At Home

"Their goals may or may not coincide with the best interests of the American people. Think of the divergence of interests, for example, between the grunts who are actually fighting this war, who have been eating sand and spilling their blood in the desert, and the power brokers who fought like crazy to make the war happen and are profiteering from it every step of the way."


Since September 11,2001 Mr. Bush has encouraged consumers to spend beyond their means as a solution to US economic ills. He has done likewise. The federal budget surplus of $127 billion at the beginning of his term in 2001 became a deficit of $455 billion in the 2003 fiscal year, the largest ever and $ 150 billion

higher than predicted by the administration just five months earlier. Trillion-plus-dollar tax cuts for the rich and an increase in government spending on military and domestic security are some of the main causes behind the deficit.

The defense industry has seen a considerable return on its $8.7 million in contributions to the Republican Party during the 2000 elections. The military budget for fiscal year 2003 was increased by $45.5 billion, the largest single increase since 1966. The total annual US military budget will be $396.1 billion-26 times larger than the combined military budgets for the countries considered "rogue states" by the administration: Cuba, North Korea, Sudan, Syria, Iraq, Iran, and Libya. Congress also approved a $75 billion request from Bush to finance war-related costs, which covers only the first six months in Iraq. Some estimate that the combined costs of war and reconstruction will be closer to $200 billion.

The military buildup and the costs of war are being paid out of funds that could be used to address hunger, poverty, and health care needs, both at home and abroad. Left behind is a nation where family farmers face foreclosure and millions go hungry every night, and where the social safety net has been dismantled. And with the rise in unemployment, the poor have few options left.

One remaining option is America's military, supposedly an "all-volunteer" force. Micah Wright, a former US Army Airborne Ranger, describes a military made up of people who "volunteer" because it's their only chance of escaping poverty. African-Americans, 12 percent of the population, make up 26 percent of the Army. The numbers are similarly skewed for Latinos and Native Americans.

Then there's the "No Child Left Behind in Education" Act, which took effect on Jan. 8, 2002, and which requires highschools to facilitate the military recruitment of their students as a condition of receiving federal education funding.

Large deficits created by an unjust war and a desire to privatize the world have led to lost jobs, lower wages, and fewer business opportunities in America. Fourth of July weekend had a bleak start, with unemployment rates at the highest level (6.4 percent) in more than nine years. In June alone, 30,000 jobs were eliminated. May job losses, initially reported at 17,000, were revised to 70,000. Unemployment claims have been trending up: in the first week of war, 445,000 people filed new claims for unemployment benefits.

The budget resolution passed in March 2003 indicates cuts to programs from Medicaid to school lunches, college loans to veterans' benefits. The Center on Budget and Policy Priorities estimates that reductions in mandatory programs for the elderly, veterans, and the poor will amount to $226 billion over 10 years, with another $210 billion lopped off discretionary programs. This total of $475 billion is about equal to the tax reduction Mr. Bush has offered to the top 1 percent of earners in America. These reductions in the social safety net would average 4 percent over 10 years, meaning, for example, that in the worst years, the budget for Medicaid would be cut by 7 percent. This when more than 43 million Americans already have no health insurance and the US already has the highest proportion of children born into poverty in the developed world (22 percent). The government has unilaterally withdrawn from the war on poverty, choosing to redeploy its might in an altogether different war: a war on the poor.

An Open Ending

In March 2003, Mr. Bush alluded to the possibility of reprisals if Mexico didn't vote America's way in the UN Security Council on the question of Iraq. In July 2003, the administration cut off military aid to 35 friendly countries in retaliation for their support of the International Criminal Court (ICC) and refusal to exempt US soldiers from the ICC's jurisdiction.

Unconstrained by any system of global governance, the US has rejected human rights treaties it finds inconvenient and recklessly indulged in an illegal military occupation of Iraq, and it maintains a string of murderous embargos. And the empire makes no bones about its desire to attack and "regime-change" Syria, Iran, Libya, North Korea, possibly Saudi Arabia, and even Cuba.

The American empire's callous quest for global dominance is generating resistance. A Pew poll asking 38,000 people in 44 countries what they think of America shows they don't trust or identify with American aims or leadership. Rather the opposite: Pew paints a picture of "hearts and minds being lost, of allies flaking away, of nations like Japan, Korea, and Italy beginning to cross to the other side of the street."

And as Washington's foreign policy loses legitimacy and is increasingly viewed even among its allies as imperial domination, a powerful global civil society movement-the movement for peace and justice-is forming against US unilateralism, militarism, and economic hegemony.

Anti-war movements in both North and South are linking up and challenging the WTO, FTAA, NAFTA, and other trade agreements that constitute an economic war on the working poor around the world. Peasants, indigenous peoples, women, and workers are uniting against trade agreements that make governments cede the people's sovereignty to corporations. And a movement for political and economic sovereignty is growing in Iraq. Even in the face of occupation following a brutal invasion, tens of thousands march regularly in the streets and fields of Iraq, demanding US troops quit the country and allow the citizens to take charge of the nation-building.

Against a future of war, injustice, and permanent crisis, the vast majority of people in this planet oppose empire. They say:


No to war.

End the tyranny of free trade and the WTO.

No to FTAA.

Another world is possible.

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