Friday, July 18, 2003

Well, imagine this.
Iraq needs up to $90bn (�57bn) in investment to restore its economy to health, according to the latest assessment by experts. The investment, which would focus on re-building infrastructure, will take a decade, said Achmed al-Shahrabani, who is leading a special Iraq initiative by management consultants McKinsey. Speaking at a conference on Iraq reconstruction in London, he said that oil revenues would not be enough to cover Iraq's economic rehabilitation.
According to McKinsey, the Iraqi colony cannot pay it's own way. In light of the Bush administration's projected $455bn budget deficit for 2003 and $475bn in 2004 (and if you believe it's only going to be this big, I've got a bridge in Brooklyn you might be interested in), the US Congress is unlikely to be too keen to subsidize an Iraqi recovery much longer.

The oil question is a tricky one, because the primary economic benefit to the US from the colonization of Iraq is lower world oil prices. However, higher world oil prices are necessary if Iraq is to pay it's own way toward reconstruction.

So the question becomes "Excepting oil, how can capital make money off of Iraq?".

Agriculture is likely to be a special target of US efforts.

In May the US announced that Dan Amstutz will lead the Bush administration's agriculture strategy in Iraq. Amstutz served Ronald Reagan as a Department of Agriculture Undersecretary and then as ambassador and chief negotiator for agriculture during the Uruguay Round talks which gave birth to the disastrous Agreement on Agriculture and the World Trade Organization. As you might have guessed, he is a former Cargill executive, too.

Amstutz comes to his new job hoping to do to Iraq what he did to small farmers in the US and around the world in the 1980s: namely, run them out of business by supporting, via regulation and by subsidy, enormous transnational agribusiness firms which will spur overproduction, drive down commodity prices, control seed technology through global intellectual property law, and cast the global food supply into the hands of the world food cartel.

As Jeffrey St. Clair at Counterpunch describes,
The contours of Amstutz's plan for Iraq are familiar: a combination of free-market shock therapy and predation by multinational corporations. Gliding over a decade of UN sanctions that have starved the nation and a war that ravaged the nation's infrastructure, Amstutz announced that the real problem facing Iraqi agriculture is, naturally, government subsidies. "Iraqi farmers have had little incentive to increase production because of price controls that have kept food very inexpensive," Amstutz announced. "With a transition to a market economy, we can see health returning to agriculture and incentives to employ good farming practices and modern techniques."

The more likely scenario is that Amstutz will use destitute condition of Iraq's farmlands as a lucrative opportunity to dump cheap grain from American companies like Cargill, all of it paid for by Iraqi oil. If this scenario plays out, it will spell disaster for Iraq's struggling farmers.
Kevin Watkins of Oxfam put it far more bluntly.
"Putting Dan Amstutz in charge of agricultural reconstruction in Iraq is like putting Saddam Hussein in the chair of a human rights commission," Mr Watkins said.
St. Clair's conclusion, in the General's opinion, is misplaced. Back in the 1970s Iraq was actually a net food exporter and there is no environmental reason the country cannot become one again. More importantly, Cargill, ADM, Monsanto and the like don't care if Iraqis eat their own food or US exported food. What they do care about is that Iraqi food passes through their hands first and foremost. Dan Amstutz is the perfect guy to ensure this happens, and in light of the increasing need for Iraq to pay its own way as a US colony over the next few years and oil inability to carry the entire load, agriculture is the place to look.

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