Dying For McDonalds In Iraq

MADRID, OCTOBER 23: In London last October 13, an investor’s conference entitled "Doing Business inIraq: Kickstarting the Private Sector" was agog with reports that McDonalds, among other corporations, maybegin selling BigMacs and fries in Iraq by next year. Attracting up to 145 multinational prospectors, theLondon conference was held less than a month after the US announced its economic masterplan for Iraq, ablueprint which The Economist heralded as a "capitalist dream" that fulfills the "wish list ofinternational investors."

Whether Ronald McDonald cuts the ribbon in time and makes the dream come true, however, will depend to alarge extent on the outcome of a US-convened donor’s conference that opens here today.

As the US struggles against the popular resistance in Baghdad, the US battles its cash-flow woes in thisbalmy Spanish capital. Behind closed doors at the Campo de las Naciones, representatives of creditor countriesand the multilateral financial institutions will be meeting for the next two days to determine how and whenMcDonalds’ and other multinational corporations will finally be able to open their doors in Iraq.

In exchange for allowing the entry of their corporations to Iraq, rich creditor nations will be pledginghundreds of millions of dollars to finance the occupation in order to make sure that it goes on unhampered –long enough for the Golden Arches to rise by the Tigris and the Euphrates.

Those who will pay the price for the burger and fries, however will have no seat at the table.

What's At Stake?

In this donor’s conference, the US will be asking the "international community" to finance anoccupation it could no longer afford on its own.

At first, the US was hoping that Iraqi oil revenues and assets as well as its own taxpayers’ money wouldbe enough. "We are dealing with a country that can really finance its own reconstruction and relativelysoon," Defense Undersecretary Wolfowitz confidently told the US Congress before the war, assured that Iraq’soil would be able to rake in as much $50 billion to $100 billion in the next two years.

Regular sabotage of oil pipelines by the Iraqi resistance as well as the reluctance of a cautious oilindustry to start their operations has all but shattered these initial plans by causing severe cash-flowproblems and a palpable budget crisis. Edward Chow, a former international executive with Chevron and now ananalyst with the Carnegie endowment, predicts: "Costs will far exceed what oil revenues will reap in theshort-term and the long-term. "

This has forced the Bush administration to reluctantly turn to US taxpayers with an $87 billion budgetrequest that had to surmount unexpected resistance from the Bush-controlled Congress. When it was finallyapproved, the funding came out with an embarrassing twist: that the money to be spent will have to beexchanged with IOUs and not just sweet thank-yous.

Taking all the money from the Iraqis’ and the American taxpayers’ pockets would have allowed the US tounilaterally determine which corporations would get all the contracts for what – at more than $100 billionand counting – has been deemed the largest post-war rebuilding business opportunity since World War II. Withthe disappointing oil revenues dashing expectations and with US taxpayers reluctant to part with their money,however, the US has been forced to give up its exclusive claim over the post-war reconstruction bonanza.

'A Way To Get In On The Ground Floor'

Armed with the latest 15-0 UN resolution legitimizing the occupation, the US will be turning to the otherrich creditor nations and the multilateral lending agencies with one enticement in exchange for their cash: apiece of the action.

"We’re telling them that that this is not just about writing checks or sending troops, but about havinga stake in Iraq so their government agencies and humanitarian groups are involved in a sector when a newgovernment is in power in Iraq," a high ranking US official recently disclosed. "It’s a way to get in onthe ground floor. That’s the selling point. "

Indeed, the well-heeled representatives with fat pockets and blank checks who will be trooping to the Campotoday will not be pledging their money for nothing. As a recent Financial Times editorial put it, "Washingtonis in a mess in Iraq, and needs help from its friends. The friends are prepared to assist but they will demanda price. "

The price comes in the form of a long sought-for guarantee giving the donor countries a crack at themulti-billion dollar business opportunities in Iraq – an access to the ground floor where the action is.With the recent announcement of plans to sell all but a few of Iraq’s crown jewels for dirt- cheap prices,other countries can’t afford to miss the post-war garage sale. If they don’t want to be locked out, theybetter pay the entrance fee to be collected personally by Coalition Provisiaonal Authority head Paul Bremerand US Secretary of State Colin Powell here in Madrid.

So Who Pays?

The amounts to be pledged at this donors’ conference could therefore be seen as an investment withexpected returns. How big or small that investment will be depends on what each donor thinks the prospects forprofits will be. This in turn depends on how big a piece of the pie the US is willing to give up. Those whocame to Madrid will need to report back to their capitals with an answer to the question: was the donationworth every cent?

What they won’t be eager to tell the folks back home, however, is where the money they just donated camefrom and to whom it is being given. In the next two days, representatives to this meeting will beat theirchests and package their donations as acts of charity towards those poor and war-ravaged Iraqis.

The rhetoric about helping Iraqis rebuild their country will hopefully drown out the fact that the peoplewho will be paying for the occupation will not be the same people who will be profiting from it. The moneythat participants to this donor’s conference will be bringing to the table are not theirs to give away.

Hence, as the conference opens, it will be important to come up with a simple – though perhaps notexhaustive – list of those who will pay for the reconstruction of Iraq as opposed to those who will gainfrom it. Those who will be made to pay are often not aware what their money is being used for and – as theopposition to the war by majorities in almost all countries indicate – will most likely object if they onlyknew. Those who will profit, however, will have the most to gain from keeping the transactions in the dark.

The Iraqis: Paying With Their Future

First, the Iraqis. All of the past and future revenues from the sale of their oil as well as all of theirformer government’s assets deposited anywhere in the world have been turned over to the UN SecurityCouncil-created but US- controlled Development Fund for Iraq.

What will be paid to US-chosen contractors such as Halliburton and Bechtel – at a price set by thesecontractors themselves – will be paid out of this Fund. Not only that, the Fund will also be used by the USExport and Import Bank for extending credit to any US company that hopes to start business in Iraq or thatwishes to buy any of the formerly Iraqi-owned corporations that will be sold off by the US as part of Iraq’smassive privatization scheme.

The Iraqis will therefore be paying American corporations for rebuilding the bridges, the hospitals, theschools, the irrigation systems, the power grids and almost everything else which the US – as prodded on bythese corporations – destroyed. They will also be paying US investors to take over the corporations that theIraqi 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 theirmoney will be spent for bringing the pieces together. When some members of the US-installed Iraqi GoverningCouncil (IGC) tried to make a fuss over what they think were unreasonably priced purchases two weeks ago, forinstance, they were promptly reminded about their place in the occupation’s pecking order.

"If we had voted [on the spending decisions], we would have rejected it," one IGC member was quoted. Hewas all too aware, of course, that the IGC members would never have been allowed to vote against those who putthem in power.

Those who are hoping for at least a little prudence in the way that the Fund will be used can take comfortfrom what a lawyer for companies hoping to strike gold in Iraq recently said. According to Washington lawyerRobert Kyle, the Fund will be "subject to a less formal approach in their allocation than those from USAIDwhich used [US] taxpayers’ money. "

By "less formal," the lawyer must have meant spending $6,000 for a mobile phone that normally costs$495 only per set, $33,000 for a pickup truck that normally costs half that, and $55,000 for a prison bed thatusually costs only $14,000 – as current details provided in Bush’s budget request for Iraq shows whencompared with actual market prices of these items.

And it’s not just their present income with which the Iraqis are paying the Americans to occupy andreconstruct their country. Even their future is being mortgaged. Just last week, the US Senate voted toconvert the $10 billion that will be used on Iraq from grants to loans. Should the World Bank and theInternational Monetary Fund decide to lend money to Iraq, they will also come with strings attached in theform of the economic conditionalities to be imposed by these banks.

In other words, the Iraqis will be forced to borrow money from the US and the international banks withouttheir consent– and at interest rates and with conditions that they did not agree with – in order to spendon things over which they have no say whatsoever.

It’s a small price to pay for being liberated.

The Taxpayers Paying With Their Days' Work

But since the Iraqis’ oil and assets are currently insufficient, the US Congress had also justreluctantly passed Bush’s request for $87 billion, around 78% of which will be spent for military costsalone. Senator Tom Daschle came out of the session stressing that US taxpayers could not "go on shoulderingthis burden virtually alone. "

Meanwhile, every American will now be giving away $300 each for the continued control of Iraq. According toindependent estimates, this total amount is more than enough to wipe all of the budget deficits now plaguing anumber of state governments; enough to pay for all of the country’s unemployment benefits for two year;seven times what the US federal government spends for low-income schools and ten times the total spent forenvironmental protection.

The donor’s conference here, however, is really an attempt to shift the burden from American taxpayers tosay, Japanese, British, Spanish, French, German, Canadian, Kuwaiti, and other rich nation’s taxpayers. Japanis said to be donating up to $5 billion to the pot, Britain, $835 million, Spain $300 million, the EuropeanUnion $230 million, and Canada about $200 million.

These amounts will not come out of nowhere. Giving these millions to the occupation means squeezing offsome health care expenditures there, bumping off some educational items here, maybe cutting away some housingfunds there, eliminating some unemployment benefits a little here, etc.

Every cent spent for corporations to do business in Iraq is a cent not spent somewhere else. It’s a smallprice to pay for being protected from terrorists and their weapons of mass destruction.

The Soldiers And The Civilians: Paying With Their Lives

But while the American and the rich countries’ taxpayers are contributing cash, others are paying withtheir lives. According to various estimates, as many as 10,000 up to 30,000 Iraqi civilians have died; 106American soldiers and scores of allied troops have been killed during the war and pacification.

With no less than the chairman of the US joint chiefs of staff admitting that the US military is nowoverstretched, the US has been pleading with other countries to pledge non-monetary contributions to Iraq inthe form of warm bodies that will attempt to stabilize the occupied country and make it safe for corporationslike McDonalds’. Once in Iraq, these soldiers and neo- Gurkhas will be moving targets for Iraqis who – forsome incomprehensible reason – are mad enough to resent being colonized and mad enough to fight back.

Interestingly, with a few notable exceptions, most of those who are being asked to pack their bags and goto Iraq are those who’d give anything and go anywhere for a job. Over the last few weeks, the US has beencourting mostly countries from the South such as India, Pakistan, Bangladesh, Fiji, the Philippines, Thailand,El Salvador, Honduras, Nicaragua, etc to deploy more troops to Iraq so that their weary soldiers can go homeand fight another day – in a different part of the world.

These soldiers are happy to go to Iraq because the per diem there would be so much more than what they’dget staying at home. Domestically, one of the strongest arguments for fielding them to Iraq is the promise ofdollar- denominated remittances to be sent home. These gun-strapped and cash-strapped governments are happy tosend their boys away in exchange for more military aid from and stronger military ties with the United States.

Senator Edward Kennedy has asserted that the US has been bribing foreign governments to induce them to goagainst domestic popular opinion against the war. He says that up to half of the $4 billion that the US spendsmonthly on Iraq could not be accounted for by the Congressional Budget Office.

In this occupation, what the US is asking for from different countries interestingly reflects internationalrealities as well: capital from the North, cheap labor from the South. The ultimate price per hour isapparently cheaper in developing countries than in the developed ones.

Who Profits?

Smiling McDonalds attendants may start ushering in customers to their branch in Iraq next year – but onlyafter Bechtel had switched back the lights, Halliburton had rebuilt the bridges, Flour had paved the roads,MCI had set up the mobile network system, Research Triangle Institute had trained the managers andbureaucrats, Abt Associates had restored the hospitals, the military-industrial complex and the private armieshad restored security, and the multinational Gurkha force had pacified the resistance.

The Iraqis and the taxpayers who are bankrolling the occupation better not know to whom they’re beingmade to give their checks. Bechtel sold chemical weapons to Saddam Hussein back in the 80s and had beenaccused of gross overpricing in Massachusetts and Bolivia. MCI was involved in history’s biggest accountingscandal and has totally no experience building cell networks. Halliburton had been accused of inflating costsand had even settled a number of fraud charge. Dyncorp had been accused of covering up sex trafficking. Flourfaces a multibillion dollar lawsuit for exploiting black workers and making security guards wear Ku Klux Klanrobes to attack their workers.

The business records of the recipients are less than flattering. According to well-documented reportsummarizing the histories of those that had been awarded contracts, they are riddled with "cost overruns,accounting irregularities, financial dereliction, fraud, bankruptcy, overcharging, price gouging,profiteering, wage-cheating, deception, corruption, health and safety violations, worker and communityexploitation, human and labor rights abuses, union-busting, strike-breaking, environmental contamination,ecological irresponsibility, malpractice, criminal prosecutions, civil law suits, privatization of publicresources, collusion with dictators, trading with regimes in violation of international sanctions,drug-running, prostitution, excessive executive compensation, and breach of fiduciary duty to shareholders andthe public. "

Lest those donor countries angling for deals on behalf of their own corporations be misled: This is not thelist of requirements for interested contractors and subcontractors hoping to do business in Iraq.

To be discussed here in Madrid today and tomorrow is the direction that the occupation takes. At stake isthe future of the "capitalist dream" of multinational corporations like McDonalds in Iraq. If the money’snot enough, the occupation forces might simply pack up in a few months. If the lending nations cough up enoughcash, they could only have ensured that they’d get a bang for their buck.

If this happens, then those financing the continued occupation – the Iraqis, the taxpayers, the soldiers,and the civilians – must at least be treated to a complimentary combo meal of Big Mac, Coke, and fries whenthe Baghdad franchise opens. They must be dying for a taste of freedom.

Courtesy,Znet