Bulletin 5:
The
Handover That Wasn’t:
Illegal Orders Give the US a Lock on Iraq’s Economy
by
Antonia Juhasz
Officially, the U.S. occupation of Iraq ended on June 28, 2004. But
in reality, the United States is still in charge: Not only do 138,000
troops remain to control the streets, but the “100 Orders” of L. Paul
Bremer III remain to control the economy.
These little noticed Orders enacted by Bremer, the now-departed
head of the now-defunct Coalition Provisional Authority, go to the heart
of Bush administration plans in Iraq. They lock in sweeping advantages to
American firms, ensuring long-term U.S. economic advantage while
guaranteeing few, if any, benefits to the Iraqi people.
The Bremer Orders control every aspect of Iraqi life – from the
use of car horns to the privatization of state-owned enterprises. Order
No. 39 alone does no less than “transition [Iraq] from a …centrally
planned economy to a market economy” virtually overnight and by U.S.
fiat.
Although many thought that the “end” of the occupation would
also mean the end of orders, on his last day in Iraq Bremer simply
transferred authority for the Orders to Prime Minister Iyad Allawi
- a 30-year exile with close ties to the CIA and British
intelligence.
Further, the interim constitution of Iraq, written by the
U.S.-appointed Iraqi Governing Council, solidifies the Orders by making
them virtually impossible to overturn
A sampling of the most important Orders demonstrates the economic
imprint left by the Bush administration; Order No. 39 allows for: (1)
privatization of Iraq’s 200 state-owned enterprises;
(2) 100% foreign ownership of Iraqi businesses; (3) “national
treatment” – which means no preferences for local over foreign
businesses; (4) unrestricted, tax-remittance of all profits and other
funds; and (5) 40-year ownership licenses..
Thus, it forbids Iraqis from receiving preference in the
reconstruction while allowing foreign corporations – Halliburton and
Bechtel, for example, - to buy up Iraqi businesses, do all of the work and
send all of their money home. They
cannot be required to hire Iraqis or to reinvest their money in the Iraqi
economy. They can take out their investments at any time and in any
amount.
Orders No. 57 and No. 77 ensure the implementation of the Orders by
placing U.S.-appointed auditors and inspector generals in every government
ministry, with five-year terms and with sweeping authority over contracts,
programs, employees and regulations.
Order No. 17 grants foreign contractors, including private security
firms, full immunity from Iraqi laws. Even if they, say, kill someone or
cause an environmental disaster, the injured party cannot turn to the
Iraqi legal system. Rather, the charges must be brought to U.S. courts.
Order No. 40 allows foreign banks to
purchase up to 50% of Iraqi banks.
Order 49 drops the tax rate on corporations from a high of 40% to a
flat 15%. The income tax rate is also capped at 15%.
Order No.12 (renewed on Feb. 24) suspends “all tariffs, customs
duties, import taxes, licensing fees and similar surcharges for goods
entering or leaving Iraq.” This led to an immediate and dramatic inflow
of cheap foreign consumer products – devastating local producers and
sellers who were thoroughly unprepared to meet the challenge of their
mammoth global competitors.
Clearly, the Bremer Orders fundamentally altered Iraq’s existing
laws. For this reason, they are also illegal. Transformation of an
occupied country’s laws violates the Hague regulations of 1907 (ratified
by the United States) and the U.S. Army’s Law of Land Warfare. Indeed,
in a leaked memo, the British attorney
general, Lord Goldsmith, warned Prime Minister Tony
Blair that “major structural economic reforms would not be
authorized by international law.”
With few reconstruction projects underway and with Bremer’s rules
favoring U.S. corporations, there has been little opportunity for Iraqis to
go back to work, leaving nearly 2 million unemployed 1 ½ years after the
invasion and, many believe, greatly fueling the resistance.
The Bremer Orders are immoral and illegal and must be repealed to
allow Iraqis to govern their own economic and political future.
Antonia Juhasz is Project Director at the International Forum on Globalization in San Francisco and a Foreign Policy in Focus scholar. Printed with the author’s permission.