For all its professed concern about the people of Iraq, the itic and its corporate sponsors seem to have no qualms about taking full advantage of cash-strapped Iraq’s heavy indebtedness. Relying on foreign investment would “avoid the government diverting spending to oil development that is sorely needed for other programs,” the itic report argues. Of course, another option would be for the corporations that sponsor the itic to use their enormous clout with Western governments to reduce Iraq’s loan repayments so the country isn’t in such a financial bind. Indeed, there’s a strong case for the West to forgive Iraq’s debts, since many of them were incurred when Iraq was a dictatorship. Debt forgiveness would greatly help Iraq make the transition to democracy — the stated US goal. But the West’s key lending agency, the International Monetary Fund (imf), has shown a willingness to reduce Iraq’s debt only if Iraq passes new laws favourable to Western corporate interests, particularly oil interests.
The imf typically uses its leverage over indebted countries to get them to redesign their economies to suit Western corporate interests, and it is playing hardball with Iraq over oil. In a “standby agreement” signed with the imf in December 2005, the Iraqi government agreed to “restructure oil sector operations into fully commercial enterprises . . . [and] draft a new petroleum law in line with the new constitution and international best practices, thereby defining the fiscal regime for oil and establishing the contractual framework for private investment in the sector.” In the agreement, which Iraq had to sign in order to get debt relief, the imf underscores that these oil-related measures are among the reforms needed “most urgently,” and set a deadline of December 31, 2006, for their implementation.
Dan Witt was only too happy to use the imf’s tough stance to increase the itic’s leverage in pushing Big Oil’s agenda on Iraq. When the imf and the World Bank met with Iraqi officials in Beirut in January 2005, the itic arranged to have its own meetings with Iraqi officials at the same location, immediately following the imf and World Bank meetings. “We were able to conserve on airline tickets and stuff like that,” explained Witt, apparently suggesting that saving on airplane tickets is an important consideration for organizations sponsored by multinational oil companies. Of course, another advantage was that in the eyes of the Iraqi officials attending, it would appear that the itic and the imf were working together, thereby giving added clout to the itic campaign for opening up Iraq’s oil — including the adoption of the controversial psas.
In case there was any doubt inside Iraq about what the US and Britain wanted in the way of a new oil regime, Washington announced in April 2006 that it was providing a “petroleum legal regulatory adviser for Iraq.” The “adviser” was actually a team of advisers under contract to the giant US consulting firm BearingPoint Inc., which was charged with “providing legal and regulatory advice in drafting the framework of petroleum and other energy-related legislation, including foreign investment,” according to a US State Department release. The “petroleum adviser” was to work with officials in the US embassy in Baghdad, as well as lawyers affiliated with the US departments of Commerce and Energy. All this American input was to “assist” the Iraqis in developing their own law.
The Iraqi government sprang into action. On July 26, 2006, barely three months after the appointment of the US “petroleum adviser,” Iraqi oil minister Hussein al Shahristani flew to Washington for a meeting at the US Department of Energy, where he presented executives of nine multinational oil companies with a confidential draft of the new petroleum law.
But as tensions increased among the various Iraqi political factions over the division of revenues under the new law, Iraq failed to meet the imf deadline. Meanwhile, the Iraqi oil workers’ union came out strongly against any move to privatize the nation’s oil, as did a growing chorus of Sunni Arab, Shiite, and Kurdish politicians. Nonetheless, under renewed pressure from Washington, the Iraqi cabinet approved the oil law in February 2007, but encountered fierce opposition the following month when it submitted it to the Iraqi parliament. Among the measures parliamentarians considered objectionable was the proposed establishment of a federal oil and gas council, which would include foreign oil experts and have the power to sign long-term agreements with foreign oil companies.
Even the visit of a stern Dick Cheney in May 2007 proved insufficient to prod the Iraqi parliamentarians to sign the law. By mid-August, some 419 prominent Iraqi oil experts, economists, and intellectuals had signed a petition expressing grave concerns about the law. By mid-September, with the Kurds passing their own oil law in defiance of the Iraqi government, efforts to find a compromise on a new national oil law had, for the time being, at least, collapsed.
Even in its bombed-out, blood-spattered, barely functioning state, Iraq has proved surprisingly resistant to US plans to secure control over its oil. Until that particular mission is accomplished, it seems hard to imagine that US troops will be coming home.
As the revered, long-serving chairman of the US Federal Reserve Board — a perch that gave him almost godlike powers over the world economy — Alan Greenspan was typically described as inscrutable, visionary, brilliant. With the publication of his long-awaited memoirs in the fall of 2007, another descriptor could be added to that list: quack.
At least, that might be the view of those reading Greenspan’s lengthy new tome, The Age of Turbulence, in which he writes, “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.” Good thing he’s not planning to apply for a job as a congressional assistant. But Greenspan isn’t the first to acknowledge an oil motive in Iraq. In January 2003, New York Times foreign affairs columnist Thomas Friedman wrote, “Any war we launch in Iraq will certainly be — in part — about oil. To deny that is laughable.” He went on to say, “I have no problem with a war for oil — if we accompany it with a real program for energy conservation.”
