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PART 3 OF 3
THE BAGHDAD YEAR ZERO BY NAOMI KLEIN
www.harper.org/BaghdadYearZero.html
www.truthout.org
September 26, 2004
The solution proposed by the U.S. occupiers was not to fix the plant
but to sell it, and so when Bremer announced the privatization auction
back in June 2003 this was among the first companies mentioned. Yet
when I visited the factory in March, nobody wanted to talk about the
privatization plan; the mere mention of the word inside the plant
inspired awkward silences and meaningful glances. This seemed an
unnatural amount of subtext for a soap factory, and I tried to get to
the bottom of it when I interviewed the assistant manager. But the
interview itself was equally odd: I had spent half a week setting it
up, submitting written questions for approval, getting a signed letter
of permission from the minister of industry, being questioned and
searched several times. But when I finally began the interview, the
assistant manager refused to tell me his name or let me record the
conversation. "Any manager mentioned in the press is attacked
afterwards," he said. And when I asked whether the company was being
sold, he gave this oblique response: "If the decision was up to the
workers, they are against privatization; but if it's up to the
high-ranking officials and government, then privatization is an order
and orders must be followed."
I left the plant feeling that I knew less than when I'd arrived. But
on the way out of the gates, a young security guard handed my
translator a note. He wanted us to meet him after work at a nearby
restaurant, "to find out what is really going on with privatization."
His name was Mahmud, and he was a twenty-five-year-old with a neat
beard and big black eyes. (For his safety, I have omitted his last
name.) His story began in July, a few weeks after Bremer's
privatization announcement. The company's manager, on his way to work,
was shot to death. Press reports speculated that the manager was
murdered because he was in favor of privatizing the plant, but Mahmud
was convinced that he was killed because he opposed the plan. "He
would never have sold the factories like the Americans want. That's
why they killed him."
The dead man was replaced by a new manager, Mudhfar Ja'far. Shortly
after taking over, Ja'far called a meeting with ministry officials to
discuss selling off the soap factory, which would involve laying off
two thirds of its employees. Guarding that meeting were several
security officers from the plant. They listened closely to Ja'far's
plans and promptly reported the alarming news to their coworkers. "We
were shocked," Mahmud recalled. "If the private sector buys our
company, the first thing they would do is reduce the staff to make
more money. And we will be forced into a very hard destiny, because
the factory is our only way of living."
Frightened by this prospect, a group of seventeen workers, including
Mahmud, marched into Ja'far's office to confront him on what they had
heard. "Unfortunately, he wasn't there, only the assistant manager,
the one you met," Mahmud told me. A fight broke out: one worker struck
the assistant manager, and a bodyguard fired three shots at the
workers. The crowd then attacked the bodyguard, took his gun, and,
Mahmud said, "stabbed him with a knife in the back three times. He
spent a month in the hospital." In January there was even more
violence. On their way to work, Ja'far, the manager, and his son were
shot and badly injured. Mahmud told me he had no idea who was behind
the attack, but I was starting to understand why factory managers in
Iraq try to keep a low profile.
At the end of our meeting, I asked Mahmud what would happen if the
plant was sold despite the workers' objections. "There are two
choices," he said, looking me in the eye and smiling kindly. "Either
we will set the factory on fire and let the flames devour it to the
ground, or we will blow ourselves up inside of it. But it will not be
privatized."
If there ever was a moment when Iraqis were too disoriented to resist
shock therapy, that moment has definitely passed. Labor relations,
like everything else in Iraq, has become a blood sport. The violence
on the streets howls at the gates of the factories, threatening to
engulf them. Workers fear job loss as a death sentence, and managers,
in turn, fear their workers, a fact that makes privatization
distinctly more complicated than the neocons foresaw.[2]
As I left the meeting with Mahmud, I got word that there was a major
demonstration outside the CPA headquarters. Supporters of the radical
young cleric Moqtada al Sadr were protesting the closing of their
newspaper, al Hawza, by military police. The CPA accused al Hawza of
publishing "false articles" that could "pose the real threat of
violence." As an example, it cited an article that claimed Bremer "is
pursuing a policy of starving the Iraqi people to make them
preoccupied with procuring their daily bread so they do not have the
chance to demand their political and individual freedoms." To me it
sounded less like hate literature than a concise summary of Milton
Friedman's recipe for shock therapy.
A few days before the newspaper was shut down, I had gone to Kufa
during Friday prayers to listen to al Sadr at his mosque. He had
launched into a tirade against Bremer's newly signed interim
constitution, calling it "an unjust, terrorist document." The message
of the sermon was clear: Grand Ayatollah Ali al Sistani may have
backed down on the constitution, but al Sadr and his supporters were
still determined to fight it - and if they succeeded they would
sabotage the neocons' careful plan to saddle Iraq's next government
with their "wish list" of laws. With the closing of the newspaper,
Bremer was giving al Sadr his response: he wasn't negotiating with
this young upstart; he'd rather take him out with force.
When I arrived at the demonstration, the streets were filled with men
dressed in black, the soon-to-be legendary Mahdi Army. It struck me
that if Mahmud lost his security guard job at the soap factory, he
could be one of them. That's who al Sadr's foot soldiers are: the
young men who have been shut out of the neocons' grand plans for Iraq,
who see no possibilities for work, and whose neighborhoods have seen
none of the promised reconstruction. Bremer has failed these young
men, and everywhere that he has failed, Moqtada al Sadr has cannily
set out to succeed. In Shia slums from Baghdad to Basra, a network of
Sadr Centers coordinate a kind of shadow reconstruction. Funded
through donations, the centers dispatch electricians to fix power and
phone lines, organize local garbage collection, set up emergency
generators, run blood drives, direct traffic where the streetlights
don't work. And yes, they organize militias too. Al Sadr took Bremer's
economic casualties, dressed them in black, and gave them rusty
Kalashnikovs. His militiamen protected the mosques and the state
factories when the occupation authorities did not, but in some areas
they also went further, zealously enforcing Islamic law by torching
liquor stores and terrorizing women without the veil. Indeed, the
astronomical rise of the brand of religious fundamentalism that al
Sadr represents is another kind of blowback from Bremer's shock
therapy: if the reconstruction had provided jobs, security, and
services to Iraqis, al Sadr would have been deprived of both his
mission and many of his newfound followers.
At the same time as al Sadr's followers were shouting "Down with
America" outside the Green Zone, something was happening in another
part of the country that would change everything. Four American
mercenary soldiers were killed in Fallujah, their charred and
dismembered bodies hung like trophies over the Euphrates. The attacks
would prove a devastating blow for the neocons, one from which they
would never recover. With these images, investing in Iraq suddenly
didn't look anything like a capitalist dream; it looked like a macabre
nightmare made real.
The day I left Baghdad was the worst yet. Fallujah was under siege and
Brig. Gen. Kimmitt was threatening to "destroy the al-Mahdi Army." By
the end, roughly 2,000 Iraqis were killed in these twin campaigns. I
was dropped off at a security checkpoint several miles from the
airport, then loaded onto a bus jammed with contractors lugging
hastily packed bags. Although no one was calling it one, this was an
evacuation: over the next week 1,500 contractors left Iraq, and some
governments began airlifting their citizens out of the country. On the
bus no one spoke; we all just listened to the mortar fire, craning our
necks to see the red glow. A guy carrying a KPMG briefcase decided to
lighten things up. "So is there business class on this flight?" he
asked the silent bus. From the back, somebody called out, "Not yet."
Indeed, it may be quite a while before business class truly arrives in
Iraq. When we landed in Amman, we learned that we had gotten out just
in time. That morning three Japanese civilians were kidnapped and
their captors were threatening to burn them alive. Two days later
Nicholas Berg went missing and was not seen again until the snuff film
surfaced of his beheading, an even more terrifying message for
U.S. contractors than the charred bodies in Fallujah. These were the
start of a wave of kidnappings and killings of foreigners, most of
them businesspeople, from a rainbow of nations: South Korea, Italy,
China, Nepal, Pakistan, the Philippines, Turkey. By the end of June
more than ninety contractors were reported dead in Iraq. When seven
Turkish contractors were kidnapped in June, their captors asked the
"company to cancel all contracts and pull out employees from Iraq."
Many insurance companies stopped selling life insurance to
contractors, and others began to charge premiums as high as $10,000 a
week for a single Western executive - the same price some insurgents
reportedly pay for a dead American.
For their part, the organizers of DBX, the historic Baghdad trade
fair, decided to relocate to the lovely tourist city of Diyarbakir in
Turkey, "just 250 km from the Iraqi border." An Iraqi landscape, only
without those frightening Iraqis. Three weeks later just fifteen
people showed up for a Commerce Department conference in Lansing,
Michigan, on investing in Iraq. Its host, Republican Congressman Mike
Rogers, tried to reassure his skeptical audience by saying that Iraq
is "like a rough neighborhood anywhere in America." The foreign
investors, the ones who were offered every imaginable free-market
enticement, are clearly not convinced; there is still no sign of
them. Keith Crane, a senior economist at the Rand Corporation who has
worked for the CPA, put it bluntly: "I don't believe the board of a
multinational company could approve a major investment in this
environment. If people are shooting at each other, it's just difficult
to do business." Hamid Jassim Khamis, the manager of the largest
soft-drink bottling plant in the region, told me he can't find any
investors, even though he landed the exclusive rights to produce Pepsi
in central Iraq. "A lot of people have approached us to invest in the
factory, but people are really hesitating now." Khamis said he
couldn't blame them; in five months he has survived an attempted
assassination, a carjacking, two bombs planted at the entrance of his
factory, and the kidnapping of his son.
Despite having been granted the first license for a foreign bank to
operate in Iraq in forty years, HSBC still hasn't opened any branches,
a decision that may mean losing the coveted license
altogether. Procter & Gamble has put its joint venture on hold, and so
has General Motors. The U.S. financial backers of the Starwood luxury
hotel and multiplex have gotten cold feet, and Siemens AG has pulled
most staff from Iraq. The bell hasn't rung yet at the Baghdad Stock
Exchange - in fact you can't even use credit cards in Iraq's cash-only
economy. New Bridge Strategies, the company that had gushed back in
October about how "a Wal-Mart could take over the country," is
sounding distinctly humbled. "McDonald's is not opening anytime soon,"
company partner Ed Rogers told the Washington Post. Neither is
Wal-Mart. The Financial Times has declared Iraq "the most dangerous
place in the world in which to do business." It's quite an
accomplishment: in trying to design the best place in the world to do
business, the neocons have managed to create the worst, the most
eloquent indictment yet of the guiding logic behind deregulated free
markets.
The violence has not just kept investors out; it also forced Bremer,
before he left, to abandon many of his central economic
policies. Privatization of the state companies is off the table;
instead, several of the state companies have been offered up for
lease, but only if the investor agrees not to lay off a single
employee. Thousands of the state workers that Bremer fired have been
rehired, and significant raises have been handed out in the public
sector as a whole. Plans to do away with the food-ration program have
also been scrapped - it just doesn't seem like a good time to deny
millions of Iraqis the only nutrition on which they can depend.
The final blow to the neocon dream came in the weeks before the
handover. The White House and the CPA were rushing to get the
U.N. Security Council to pass a resolution endorsing their handover
plan. They had twisted arms to give the top job to former CIA agent
Iyad Allawi, a move that will ensure that Iraq becomes, at the very
least, the coaling station for U.S. troops that Jay Garner originally
envisioned. But if major corporate investors were going to come to
Iraq in the future, they would need a stronger guarantee that Bremer's
economic laws would stick. There was only one way of doing that: the
Security Council resolution had to ratify the interim constitution,
which locked in Bremer's laws for the duration of the interim
government. But al Sistani once again objected, this time
unequivocally, saying that the constitution has been "rejected by the
majority of the Iraqi people." On June 8 the Security Council
unanimously passed a resolution that endorsed the handover plan but
made absolutely no reference to the constitution. In the face of this
far-reaching defeat, George W. Bush celebrated the resolution as a
historic victory, one that came just in time for an election trail
photo op at the G-8 Summit in Georgia.
With Bremer's laws in limbo, Iraqi ministers are already talking
openly about breaking contracts signed by the CPA. Citigroup's loan
scheme has been rejected as a misuse of Iraq's oil revenues. Iraq's
communication minister is threatening to renegotiate contracts with
the three communications firms providing the country with its
disastrously poor cell phone service. And the Lebanese and
U.S. companies hired to run the state television network have been
informed that they could lose their licenses because they are not
Iraqi. "We will see if we can change the contract," Hamid al-Kifaey,
spokesperson for the Governing Council, said in May. "They have no
idea about Iraq." For most investors, this complete lack of legal
certainty simply makes Iraq too great a risk.
But while the Iraqi resistance has managed to scare off the first wave
of corporate raiders, there's little doubt that they will
return. Whatever form the next Iraqi government takes - nationalist,
Islamist, or free market - it will inherit a shattered nation with a
crushing $120 billion debt. Then, as in all poor countries around the
world, men in dark blue suits from the IMF will appear at the door,
bearing loans and promises of economic boom, provided that certain
structural adjustments are made, which will, of course, be rather
painful at first but well worth the sacrifice in the end. In fact, the
process has already begun: the IMF is poised to approve loans worth
$2.5- $4.25 billion, pending agreement on the conditions. After an
endless succession of courageous last stands and far too many lost
lives, Iraq will become a poor nation like any other, with politicians
determined to introduce policies rejected by the vast majority of the
population, and all the imperfect compromises that will entail. The
free market will no doubt come to Iraq, but the neoconservative dream
of transforming the country into a free-market utopia has already
died, a casualty of a greater dream - a second term for George
W. Bush.
The great historical irony of the catastrophe unfolding in Iraq is
that the shock-therapy reforms that were supposed to create an
economic boom that would rebuild the country have instead fueled a
resistance that ultimately made reconstruction impossible. Bremer's
reforms unleashed forces that the neocons neither predicted nor could
hope to control, from armed insurrections inside factories to tens of
thousands of unemployed young men arming themselves. These forces have
transformed Year Zero in Iraq into the mirror opposite of what the
neocons envisioned: not a corporate utopia but a ghoulish dystopia,
where going to a simple business meeting can get you lynched, burned
alive, or beheaded. These dangers are so great that in Iraq global
capitalism has retreated, at least for now. For the neocons, this must
be a shocking development: their ideological belief in greed turns out
to be stronger than greed itself.
Iraq was to the neocons what Afghanistan was to the Taliban: the one
place on Earth where they could force everyone to live by the most
literal, unyielding interpretation of their sacred texts. One would
think that the bloody results of this experiment would inspire a
crisis of faith: in the country where they had absolute free reign,
where there was no local government to blame, where economic reforms
were introduced at their most shocking and most perfect, they created,
instead of a model free market, a failed state no right-thinking
investor would touch. And yet the Green Zone neocons and their masters
in Washington are no more likely to reexamine their core beliefs than
the Taliban mullahs were inclined to search their souls when their
Islamic state slid into a debauched Hades of opium and
slavery. When facts threaten true believers, they simply close their
eyes and pray harder.
Which is precisely what Thomas Foley has been doing. The former head
of "private sector development" has left Iraq, a country he had
described as "the mother of all turnarounds," and has accepted another
turnaround job, as co-chair of George Bush's reelection committee in
Connecticut. On April 30 in Washington he addressed a crowd of
entrepreneurs about business prospects in Baghdad. It was a tough day
to be giving an upbeat speech: that morning the first photographs had
appeared out of Abu Ghraib, including one of a hooded prisoner with
electrical wires attached to his hands. This was another kind of shock
therapy, far more literal than the one Foley had helped to administer,
but not entirely unconnected. "Whatever you're seeing, it's not as bad
as it appears," Foley told the crowd. "You just need to accept that on
faith."
Notes 1. Tofiq did say that several U.S. companies had expressed
strong interest in buying the state-owned cement factories. This
supports a widely held belief in Iraq that there is a deliberate
strategy to neglect the state firms so that they can be sold more
cheaply - a practice known as "starve then sell." 2. It is in Basra
where the connections between economic reforms and the rise of the
resistance was put in starkest terms. In December the union
representing oil workers was negotiating with the Oil Ministry for a
salary increase. Getting nowhere, the workers offered the ministry a
simple choice: increase their paltry salaries or they would all join
the armed resistance. They received a substantial raise.
About the Author: Naomi Klein is the author of "No Logo" and
writer/producer of "The Take", a new documentary on Argentina's
occupied factories.
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