Friday, March 18, 2005

All for the Oil?

American expatriate muckraker Greg Palast, in conjunction with BBC's Newsnight and Harper's, has uncovered the evidence that confirms many people's suspicions concerning the Bush administrations rationale for the war in Iraq: oil. It seems there were competing plans for Iraq's oil, well before the invasion took place.

The administration's resident neoconservatives wanted to use Iraq's oil as a way to break OPEC by privatizing it and drastically increasing production. Naturally, flooding the market with oil would drive prices down and "Big Oil" didn't view the neoconservative plan kindly.

As Palast writes:
Philip Carroll, the former CEO of Shell Oil U.S.A who took control of Iraq's oil production for the U.S. government a month after the invasion, stalled the sell-off scheme. Mr. Carroll told us he made it clear to Paul Bremer, the U.S. occupation chief who arrived in Iraq in May 2003, that: "There was to be no privatization of Iraqi oil resources or facilities while I was involved." The chosen successor to Mr. Carroll, a Conoco Oil executive, ordered up a new plan for a state oil company preferred by the industry
Further on, Palast continues:
Questioned by Newsnight, Ms. Jaffe said the oil industry prefers state control of Iraq's oil over a sell-off because it fears a repeat of Russia's energy privatization. In the wake of the collapse of the Soviet Union, U.S. oil companies were barred from bidding for the reserves. Jaffe said "There is no question that an American oil company ... would not be enthusiastic about a plan that would privatize all the assets with Iraq companies and they (U.S. companies) might be left out of the transaction."

In addition, Jaffe says U.S. oil companies are not warm to any plan that would undermine OPEC. "They [oil companies] have to worry about the price of oil."

So "Big Oil" won the debate and I'm glad. As long as the oil remains publicly owned, there's a chance the Iraqi population will benefit from it. Although, if I was a betting man, I'd wager a pretty penny that the oil revenue will be used for giant infrastructure investments for use by foreign multinationals rather than being spent on the Iraqi people. And there's nothing wrong with infrastructure investments as long as it's the Iraqi people who are the primary beneficiaries. But that's rarely the case according to John Perkins, the author of Confessions of an Economic Hitman and a former member of the international banking community.

In a conversation with Amy Goodman of Democracy Now, Perkins explained his job and what U.S. corporations got in return:
the company I worked for was a company named Chas. T. Main in Boston, Massachusetts. We were about 2,000 employees, and I became its chief economist. I ended up having fifty people working for me. But my real job was deal-making. It was giving loans to other countries, huge loans, much bigger than they could possibly repay. One of the conditions of the loan–let's say a $1 billion to a country like Indonesia or Ecuador–and this country would then have to give ninety percent of that loan back to a U.S. company, or U.S. companies, to build the infrastructure–a Halliburton or a Bechtel. These were big ones. Those companies would then go in and build an electrical system or ports or highways, and these would basically serve just a few of the very wealthiest families in those countries. The poor people in those countries would be stuck ultimately with this amazing debt that they couldn’t possibly repay. A country today like Ecuador owes over fifty percent of its national budget just to pay down its debt. And it really can’t do it. So, we literally have them over a barrel. So, when we want more oil, we go to Ecuador and say, “Look, you're not able to repay your debts, therefore give our oil companies your Amazon rain forest, which are filled with oil.”
There's no good reason to assume this isn't the script for Iraq as well.

This is a huge find by Palast, who was also integral to fleshing out the presidential vote scandal in Florida in 2000. It assures the cynics that they were correct, but it also demonstrates the U.S. is still following its post-WWII policy of controlling the Middle East's energy reserves, which was further enunciated by Jimmy Carter in his SOTU of 1980. And it confirms my suspicions proponents and critics of the neoconservatives miss: The neocons in the administration aren't radical idealists; they're the same old tired realists dressed up in a neo-Hegelian guise.