Kevin Drum asked, “Who owns Iraq’s oil?”
The Iraqi gov’t. Unlike most everything else that was privatised, in what appears to be a violation of the fourth Geneva Convention, this arrangement assists the kind United States in its management of sales and allocation of revenues for reconstruction as it sees fit.
No money, no play: US on the brink in Iraq
A few weeks after President George W Bush announced the end of “major hostilities” in Iraq, the US managed to pass UN Resolution 1483, which created the so-called UN Development Fund. Under this fund, all of Iraq’s past and future oil revenues, as well as all the assets of the former Iraqi government located anywhere in the world, would be placed under the direct control of the US, as overseen by the IMF and the WB – two institutions in which the US has considerable voting power.
The resolution passed the UN Security Council because the US assured Russia, France and China that all contracts entered into by their firms under the UN Oil-for-Food program during the sanctions regime would be honored by the occupation authority and any subsequent interim government. [2]
Dying for a McDonald’s in Iraq
What will be paid to US-chosen contractors such as Halliburton and Bechtel – at a price set by these contractors themselves – will be paid out of this fund. Not only that, the fund will also be used by the US Export and Import Bank for extending credit to any US company that hopes to start business in Iraq or that wishes to buy any of the formerly Iraqi-owned corporations that will be sold off by the US as part of Iraq’s massive privatization scheme.
The Iraqis will, therefore, be paying American corporations for rebuilding the bridges, the hospitals, the schools, the irrigation systems, the power grids and almost everything else which the US – as prodded on by these corporations – destroyed. They will also be paying US investors to take over the corporations that the Iraqi people previously collectively owned, but which will now be sold off without their authorization.
Just as they had no say over the bombing of their country, however, so will they have no say over how their money will be spent for bringing the pieces together.
SVETLANA TSALIK, stsalik@sorosny.org, www.iraqrevenuewatch.org
Tsalik is director of the Revenue Watch program at the Open Society Institute, which includes Iraq Revenue Watch. She said today: “Under the Coalition Provisional Authority, $9.3 billion in crude oil export revenues, $8.1 billion in leftover UN Oil-for-Food Program funds and other funds have been transferred into the Development Fund for Iraq, the main repository for Iraq’s oil revenues. To date, the CPA has spent over $8 billion in DFI funds on infrastructure, administration, security and other projects, without any independent monitoring or supervision…. Since the IAMB (International Advisory and Monitoring Board), created by a UN Security Council Resolution in May 2003, began work in December, it has expressed concern over the use of DFI funds to pay for a contract awarded to Halliburton with no competitive bidding…. The CPA had been reluctant to hand over broad auditing authority to the IAMB — whose members consist of the UN, the World Bank, the International Monetary Fund, and the Arab Development Fund — but finally agreed to such a provision in October. [Currently] it has less than two months to account for billions of Iraqi funds spent by the Coalition Provisional Authority…. An examination of the minutes of IAMB meetings reveals gaps in the CPA’s management of Iraq’s oil and the continuing exclusion of Iraqis in the oversight of their oil revenues….”