The Hand-Over that Wasn't
By Antonia Juhasz
The Los Angeles Times
Thursday 05 August 2004
Illegal orders give the U.S. a lock on Iraq's economy.
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 the 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-free
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 Iraq's 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 No. 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 1/2 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 a project director at the International Forum on
Globalization in San Francisco and a Foreign Policy in Focus scholar.
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