Saturday, May 15, 2004

I have long been convinced that transnational capital will sooner or later weigh in decisively on Mr. Bush's War, and that decision will spell the long-term success or failure of the neocon dream of fundamentally transforming the Middle East. A great many costs have been incurred through the Iraq war, not the least of which has been political hostility between the US and the EU which from time to time threatens to spill over into the trade agenda and economic issues in general. The informal and spontaneous US boycott of many French imports in 2003 as well as the offical and considered US ban on Iraq rebuilding contracts for France and Germany (among others) was only the first volley in quite a different war that has always had the potential of getting out of hand and seriously damaging the power of transnational capital itself.

Compensation for this economic tussle would have to come in the form of dramatic gains in profitable opportunities in a new liberalized and marketized (and democratized if necessary, but really neither here nor there) Iraq -- with the promise of the entire Middle East to come. Capital's avant garde was to be reconstruction firms such as Halliburton and Bechtel. They were to be followed by transnational oil and agribusiness, since it was clear that US administrators envisioned an Iraq standing on its own two feet quite soon off of its oil wealth and a reinvigoration of its status as an agricultural exporter to the region. Thus Dan Amstutz, former Cargill vice-president and US negotiator of the WTO's Agreement on Agriculture, was quickly dispatched to Iraq to "reconstruct" Iraqi agriculture.

Well, that second wave never really made it ashore, and the third wave seems to be waiting indefinitely to deploy.
Postwar Iraq was supposed to be a bonanza for American companies. The Commerce Department hosted a series of conferences attended by thousands who dreamed of investment opportunities promised by a free Iraq. The administration characterized the more than $21 billion Congress allocated to the reconstruction as a down payment, an initial investment that would spark the economy and bring riches to the Iraqi people as well as American entrepreneurs.

The reality a year after President Bush declared the end of major combat is far different.

Though many dozens of U.S. corporations have government contracts to help rebuild the country, relatively few American companies have invested their own capital. . . .

The result is that Arab, Asian and European firms with more experience working in the region -- and more stomach for dealing with the uncertainties -- have taken the lead in the country's emerging markets.
While the Arabs, Asians and Europeans slog it out amidst the truck bombs and helicopter strikes, US firms are hanging out in Amman, Kuwait City and Dubai waiting to, as the Washington Post characterizes it, "pounce" on the country. If and when they do, it seems unlikely much in the way of profits will come from Iraq anytime soon, lending to the belief that transnational capital will be quite keen to keep US-EU rivalry as much under wraps as it possibly can.

This is my favorite line from the entire article: "You don't have Toys R Us. McDonald's is not opening any time soon." Ah, yes, making the world safe for clowns and talking giraffes.

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