June 29, 2003
Iraq privatization and economic globalization
On recent news we all have seen the possibility of a privatization of all the state-owned companies, trying to achieve democracy through the arrival of a free market and the opening of Iraq to investment by foreign companies.
Although all this is presented in the spirit of democracy, this imposed globalization goes contrary to any perception of equality or respect for the vanquished country. More to the point, the possibility of selling the state-owned companies at give-away prices is bound to create more distrust and enmity among the population of Iraq, as well as further confirm the image that the United States is getting all over the world, that of an empire with little respect for local customs, laws and culture.
One of the values of the Green Party is that of localism, pursuing solutions through local initiative, as opposed to the dreary homogenization of a global culture. It is much rather enriching to have a proper culture anywhere in the world, than to have to accept the presence of yet another McDonald, this time in the streets of Baghdad.
But the case of Iraq is not an isolated one, although clearly an indicative of the incessant pressure of transnational capital to engulf and expand beyond borders and cultures. The great problem lying here, of course, is not the presence of foreign ideas or the stamping out of local culture and traditions. There is other unintended consequence of this extensive reach for profits: the transference of he external costs to small or unindustrialized countries, reducing their ability to compete, overwhelming the local economies, and creating huge social disparities among the population.
Those that participate in the global play, a increasingly restricted minority, usually controlling economic and political power, where the great majority of the population is forced to accept whichever conditions there are in order to protect the interests of the global economy. That disparity is what creates a center-periphery structure, where there is a flow of capital and resources to the center, and a trickle of payments to the periphery. Political power, tightly held, also contributes to severe inequalities and discontent, often directed toward the country that is perceived as the "source" of all ills.
Imagine then what it is, then, to have the state run companies sold to the highest bidder, or to the one with better contacts in Washington DC.
Not only it has been shown time and time again, private companies fare particularly poor in providing basic services to unindustrialized countries, it would also run contrary to a basic tenet of respecting the other country’s values and people.
If not for the philosophical reasons, then for the practical ones, the USA must refrain from selling the assets of the invaded Iraq. Otherwise, it would be foolishly courting the anger of an already alienated population, and providing alibis and fanatics to its eager enemies.
Posted by Camilo at June 29, 2003 05:49 PMI was listening to NPR this morning and the Iraq tobacco factory held a vote for the new manager of the factory. The story went on to say that this was against the wishes of the American Iraqi Director (Governor?) but there was nothing he could do. The old manager was a Baath loyalist who was sent packing shortly before the fall of Iraq.
They also mentioned that this company in particular is probably going to be privatized and brought up to new standards (they are using 30-year-old equipment) and that many jobs would be lost. I am not against this, however I would also like to see to it that the prices reflect this transition and that they do not get lost jobs and price gouging. I think more than a few Iraqis would simply burn down the factory if companies could not follow basic capitalist guides and not use their power to manipulate.
Posted by: Stephen VanDyke at June 30, 2003 10:36 AMNPR also mentioned that general elections are more than a year away and thay America will have swooped in and bought up all the state-run businesses by then. If we get a healthy dose of unfettered capitalism I will be amazed, but I sense we will get more of a top-heavy socialist order that many Iraqis have already witnessed in their old regime and will not be pleased.
I for one hope that capitalism can redeem itself.
Posted by: Stephen VanDyke at June 30, 2003 10:39 AMI think this is amazingly foolish. In relatively stable countries, privatization of pulbic infrastructure has caused runaway prices on such basic commodities as water and electricity. The public infrastructure could be subsidized to work at a loss. Private comapanies need to make a profit. The result of this has been civil unrest, in a country that did not have it before.
So in a chaotic war-torn Iraq, we want to risk dramatically raising prices on the very basics for survival? How do we decide who owns the infrastructure now? How will we decide a fair selling price? Will public companies pass all of their rebuilding cost directly on to the consumer? This sounds a heck of a lot like cronyism. It also sounds like a good way to insure suffering, and the resultant massive riots and anti-Americanism. Throw in the millions of AK-47s in the country, and things could be really fun.
The idea that the free market is the first step towards democary is silly. A free market is a byproduct of a *democracy* which is what we should be trying to build. The free market does not come first. This market fundamentalism at its worst.
It sounds like a recipe for disaster. I hope it doesn’t turn out that way.
Posted by: Timothy Klein at June 30, 2003 02:19 PMPrivatization will result ultimately in chaos and poverty in Iraq as millions will not be able to earn a decent wage in Iraq from corporate owned industries, as people loose access to social services and bare necessities like water due to jacked up prices, and as the unemployed masses riot in the streets in response. The United States and its neo-mercantilist corporations have unleashed Armagedon in Iraq. America has no right nor obligation under international law to sell-off Iraq’s industry, resources and labor to the highest corporate bidder. What it is doing is completely illegal and unjust. The chaos is only just beginning.
Posted by: Steve at October 17, 2003 10:29 PM
