Be the First on Your Block to Make a Buck off Iraq
Mondo Washington
By James Ridgeway
Village Voice
10-12-2
As they prepare to make war on Iraq, cowboy-in-chief George Bush and his
cohorts have pulled out all the stops. They're trying to convince us that
this act of pure aggression is a "preemptive" move that will allow Americans
to sleep more peacefully in their beds, while the Iraqi masses cheer the
conquerors who have starved them for a decade and then bombed them to
smithereens.
And that's just for starters. In the imaginations of Bush and his advisers,
this Wild West approach to the Middle East stands to knock out Syria's
despot, rein in the Saudi royal family, inspire the neighboring Iranians to
their own pro-American putsch, banish the Palestinians to Jordan, and clear
the way for Israeli settlers.
The doctrine of the preemptive strike is the perfect strategy for ushering
in a new century of neocolonialism, unfettered by any need to respect
sovereignty or self-determination.
Better still, it's going to mean big bucks for whoever gets in on the ground
floor. Before the war can begin, the movers and shakers in Washington and
around the world have their eyes on divvying up the spoils.
MILITARY VENDORS
First in line to benefit from the war is Dick Cheney's old company
Halliburton and its subsidiary Kellogg Brown & Root-or, more colloquially,
just Brown & Root-which has cornered the market in supplying American armies
of "liberation" around the globe. Launched in the 1930s amid a maze of
political deals and lucrative government contracts, the Texas oil
construction outfit built airstrips, roads, harbors, and military bases in
Vietnam, and later provided similar services in Zaire, Haiti, Somalia,
Kosovo, and Afghanistan.
As Bush Senior's secretary of defense, Cheney oversaw the privatization of
the military's logistics operations. Journalist Robert Bryce, who has
chronicled the construction company in minute detail, reports Brown & Root
won contracts of nearly $9 million to help the government implement those
policies, giving it a natural leg up. During the 1990s, records show, it
earned more than $2.5 billion for military support-much of it during
Cheney's time as a top Halliburton executive.
With Cheney back in the White House, Brown & Root's fortunes have only
improved. Last spring the Army Operations Support Command awarded it an
open-ended deal to work with army engineers and "provide for the
construction of base camps and their infrastructures, including billeting
and dining facilities; food preparation, potable water and sanitary systems;
showers; laundries; transportation; utilities; warehouses and other
logistics support." How much has Brown & Root already made under this
contract-and how much does it stand to make in Iraq? We may never know. The
numbers are classified.
AGRICULTURAL INTERESTS
Before the first Persian Gulf war, Iraq had become a sizable market for
American rice, wheat, and chickens. In the last half of the '80s, the United
States sold $4 billion in food to Iraq. Twenty percent of the American rice
crop went there at one point in the 1980s.
In 1988-89 the United States exported 521,000 tons of rice to Iraq, making
it our number one consumer. More recently, the figure has been zero. A
spokesperson for the U.S. Rice Federation, which takes a dim view of the
sanctions, wouldn't comment on the current situation. But it's safe to say
there would be nothing like a war, regime change, and the subsequent lifting
of sanctions to open up this lucrative market once again.
BIG OIL
Oil, clearly, is the commercial jackpot in this war. Even under the
sanctions, Iraq provides us with 9 percent of our oil supply. Until this
spring, we were buying half of all Iraq's oil exports. But oil is also the
carrot the U.S. is holding out to potential allies. As Bush with his left
hand assures the American people that he will fight to secure their energy
supply, with his right he's giving away future Iraqi oil to buy support from
the French and the Russians.
At the recent Group of Eight summit in Canada, Russian president Vladimir
Putin reportedly told Bush he couldn't care less whether Saddam got the
heave-ho, as long as Russia got compensated for about $12 billion in
outstanding loans to Iraq, and $4 billion owed them for transporting Iraqi
oil.
Meanwhile, the Russian oil companies are scrambling to save their recent
deals. LUKoil, for one, signed an exploration contract in 1997. "We're
against this war," said LUKoil's flack Dmitry Dolgov in Moscow. "We don't
know about the United States, [but] we know that our government and our
president promised us to back all our interests in Iraq under any possible
event." And Slaveneft-which, according to one story, is actually financed by
Saddam Hussein himself-wants in.
The French, too, want American assurances they won't lose oil concessions.
"We have no operations right now, as it isn't legally possible," said Tomas
Fell of Totalfinaelf, the giant French oil concern hungry to develop two
fields in southern Iraq. "If we could legally operate in Iraq, we would be
very interested in working there."
Other smaller outfits are hoping to cash in on oil deals: Petro Vietnam,
China's National Petroleum Corporation, and Indonesian companies are all
eyeing the Iraqi fields.
Publicly, the big international oil companies remain above it all. When
asked if the Exxon Mobil had any operations in Iraq, flack Lynn Durano of
Exxon Mobil said, "Absolutely not." As for the upcoming war, Durano added,
"It would be totally inappropriate to speculate on a war with Iraq. Exxon
has not been involved with any topical discussions regarding a war in Iraq."
A Shell spokesperson likewise had no comment on the sanctions or the
possibility of war, saying only, "We obey the law."
However, it is well known that the majors, reeling from attacks on their
environmental policies and with an invidious history of meddling in the
third world, need stability to drill oil and protect the billion-dollar-plus
investments in pipelines. Lucio Noto, former Exxon Mobil vice chairman, said
in a recent interview, "I think in many cases [sanctions] do not achieve the
intended objective. In many cases they hurt groups of people we are not
intending to hurt. I believe they take us out of the ball game and leave the
playing field to other people. And I think if you look at the track record,
they have been singularly ineffective."
The prospect of a black-gold rush in Iraq means the United States can
exchange oil futures for support for the war. But over the long haul, the
war may produce unanticipated consequences for the oil companies-and thus
for their native son George W. Bush. Robert Mabro, who heads the Oxford
Institute for Energy Studies, a British think tank, argues there is no doubt
that a new pro-American Iraqi government will initially seek to maximize the
volume of production.
"This output-maximization policy, particularly if pursued at a time when the
market is oversupplied, could cause prices to collapse" and thus destabilize
the region. "Bad seeds sowed now will inevitably produce in the end their
poisonous flowers," warns Mabro.
SAUDI ROYALS
There's another potential monkey wrench in the rosy scenario for big
business. If there's war, the one man Bush will need is Abdullah bin Abd
al-Aziz, crown prince of Saudi Arabia.
His kingdom is America's surrogate in the Middle East, providing the U.S.
with a secure military base and acting as a stabilizing force within OPEC,
absorbing the ups and downs of oil prices. More than anyone else in the
royal family, the prince knows how to handle the quarrelsome local tribes-
including the Wahhabi, whose religious fundamentalism influences Osama bin
Laden and many of his followers-and how to stave off any fundamentalist
revolt by doling out jobs in the Saudi National Guard.
But by all reports, al-Aziz is getting tired of being Our Man in Riyadh,
taking in billions in oil dollars and then recirculating them back to the
United States through defense contracts. He wants a more independent policy.
He also has close dealings with Syria's strongman, President Bashar al Asad,
and has been trying to persuade the International Monetary Fund to help
modernize Syria's economy with the understanding that Saudi Arabia stands
behind any deal. Bush hawks who see Iraq as the starting point for a world
war that takes out Syria will run hard up against the Saudis. The Saudis
also are financiers of last resort if Lebanon goes down the drain.
Most important, the prince has reached out to Iran with the goal of forging
a common oil policy. A report last month from the Petroleum Finance
Company-a consulting firm in Washington which works with Aramco, the joint
U.S.-Saudi oil company- pointed out that a united Saudi-Iranian oil front
would become the heartbeat of OPEC, and would wield extraordinary power.
Should either or both of these two nations decide they've had it with Bush,
all they have to do is let the much-heralded free market take over, flooding
the globe with crude and sending oil prices into a steep dive. Lower prices
would wipe out not only smaller international companies that have been
enticed into oil play by high prices, but could wipe out the domestic oil
companies in the United States, causing sheer political hell for Bush in his
little oil bastion of Houston.
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