Monday, December 26, 2005

IMF Approves Loan for Iraq: Let the Oil Drilling Begin

By Josh Frank

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Posted 12/26 | Add a Comment

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  1. Josh, Thanks for writing this article. This is an important news story that has been ignored by the corporate media. Iraq’s involvement with the IMF has killed any possibility of a democratic system there. The USA has “central americanized” Iraq.

    Posted by rosemarie jackowski from  on  12/27  at  03:38 PM

  2. I don’t think you’ve got the facts right here.  You mention Iraq’s “ever increasing debt,” but it’s just the opposite.

    Prior to Iraq’s invasion of Kuwait, Iraq already owed well over $30 billion to foreign creditors.  That debt never went away, and this fall it was $38.9 billion.  Of this amount, George Bush recently forgave the entire $4.1 billion that was owed to American companies.  The U.S. will pay this instead.  With U.S. and French pressure, the other creditors have agreed to forgive 80% of the $38.9 billion in debt.

    So Iraq’s debt drops from $38.9 to $7.7 billion (most of the remaining debt is owed to Russia), and then it borrows $685 million more from the IMF. That doesn’t sound so bad.

    As for efforts to increase Iraq’s oil output, that also doesn’t sound so bad.  Iraq has only one major industry, oil.  While it would be good for Iraq to diversify, that is a long term goal.  In the next 10 years, if Iraq wants to improve the lives of its people, it will do so mainly by pumping more oil.

    In short, I don’t see anything nefarious here.  Saudi Arabia, the world’s largest oil exporter, makes about $25 billion in revenue (not profit) a year from oil.  The U.S. has already spent more than $200 billion on Iraq.  Anyone who thinks the U.S. has spent $200 billion on Iraq in the hopes of making a profit hasn’t looked at the numbers.  Even if the U.S. simply appropriated all the oil pumped in Iraq (it isn’t doing this), it would still take decades just to break even.

    Posted by an observer from  on  12/30  at  11:30 AM

  3. I also disagree with Ms. Jackowski’s comment.

    (1) News of the IMF deal and the debt forgiveness are ALL OVER the “corporate media.” The so called corporate media has done an excellent job covering this.

    (2) I don’t see how shedding $30+ billion in debt and getting some assistance to increase oil output has killed any possibility of creating a democracy in Iraq.  How is it impeding democracy? 

    Note that to answer this, you would have to say something specific about Iraq.  Comments about U.S. global domination or what has happened in Central America have nothing to do with it.  How does the IMF loan preclude democracy in Iraq?


    You people (the people who write on this site) have a lot of passion, but often fall short on facts and specifics.

    Posted by an observer from  on  12/30  at  11:40 AM

  4. Observer, thanks for the comments. You mention that George Bush forgave part of the debt and took the money from taxpayers to pay back the corporations. That happens a lot. Somehow the money often winds up in the greedy hands of the corporate bosses. I think of the IMF as just a very large money laundering scheme.

    You also say that “we often fall short on the facts”. I got some of my facts from reading books such as WAR IS A RACKET by Smedley Butler and others who had first hand knowledge.  More recently I had a conversation with John Perkins. It is published on this site.  Maybe it is those who support the WTO, IMF, World Bank, etc who are short on the real facts.

    You ask how large debt to the IMF can impede democracy. Does a debt to the IMF give control and power to the IMF and therefore disenfranchise the people of the debtor nation?  Also, if the USA really wanted democracy in Iraq would the CPA have imposed 100 Orders on the people of Iraq. Many of these orders were written to benefit US corporations...such as Iraqi Order 81 which was written to benefit Monsanto and other corporations. Is it your position that the loans to Iraq will be handled differently than history shows?

    Posted by rosemarie jackowski from  on  12/30  at  03:15 PM

  5. So I went out and read order 81.  I had not heard of it before, so thank you. 

    It was interesting.  Again, however, I didn’t see anything so awful.  It was a basic set of patent laws for a country that didn’t have adequate patent protection.  You’re correct that one section specifically covered patented seeds, but similar provisions can be found in other countries including the U.S. and European Union.

    Patent law is a good thing.  To paraphrase Douglass North, when society rewards behavior that’s good for society, everyone benefits.  And as he has shown, patent law is essential to economic success.  If you want people to do research, invent new things and improve existing processes, you have to reward them.

    If a country has inadequate patent and copyright laws, no one will sell their products there.  No one will do business there.  No one except the government will do research there.  Why should they lose their patent?  This includes Monsanto.

    I don’t know what the CPA has done with regard to Monsanto.  If the CPA said to farmers “You MUST buy Monsanto seed only,” that would be an abuse. If they said “America will provide you with free Monsanto seed if you want it, but you must obey these laws concerning the seed,” that might be an abuse.  Maybe they’re harming the competing local seed producers.  I honestly don’t know what they’ve done.  Without knowing more, it’s hard to say if anything bad has happened.

    Posted by An observer from  on  01/01  at  05:57 AM

  6. Good morning Observer, I agree that some protection must be provided with patents and copyrights; however, the 100+ Orders imposed on Iraq by us are evidence that the the USA does not honor Iraq’s sovereignty.  Order 81 is of particular concern because of the hardship it has placed on Iraqi farmers. US farmers are also suffering because of similar assaults by the government/corporate connection. In Vermont right now legislation is again being proposed to protect farmers. When a farmer is sued because a GMO seed is blown onto his farm, we all suffer. The natural food supply is threatened. Also there is a matter of justice. Aggression by US corporations is a world wide problem.

    Posted by rosemarie jackowski from  on  01/01  at  08:26 AM

  7. I agree, big corporations often cause problems.  That’s a big subject by itself.

    We should never have invaded Iraq.  It was the wrong thing to do, legally and morally.  It hasn’t done the U.S. any good either.  But it’s already been done.  Now the U.S. has to clean up its mess as best it can. 

    We’re doing some things right now.  We’ve pushed for a new (imperfect) constitution, democratic elections, debt relief.  We’ve spent tens of billions trying to rebuild, with more to come. 

    Rapid withdrawal isn’t the answer.  I think it would lead to civil war and the loss of tens of thousands of additional Iraqi lives.  What would emerge would probably be either a new brutal dictatorship or a failed state ruled by tribal leaders and warlords like Somalia. 

    In short, we’ve made a mess which can’t easily be fixed, but we seem to be doing a passable job trying to fix it now.  I don’t see any alternatives that are much better than the present course.

    Posted by An observer from  on  01/02  at  09:30 AM

  8. Hello again Observer. You say that we’ve spent billions trying to rebuild. I believe that the USA should give the billions to Iraq, instead the money is going to US corporations. This might just be the biggest money laundering scam in the history of the universe. Follow the money. Back in 1991, Col. Hackworth said that in war some people die, and some people get rich. What has been going on in Iraq is a perfect example of that.
    I believe that ALL US troops should be withdrawn from ALL foreign soil. At a recent meeting of my Chapter of Veterans for Peace that proposal was accepted.

    Posted by rosemarie jackowski from  on  01/02  at  11:21 AM

  9. You don’t think that will result in a horrible blood bath in Iraq?  I think they will die by the tens of thousands if the U.S. pulls out now without setting up something stable to take over.  And all the surrounding countries would be sending in weapons, money and (secretly) troops, sort of like the perennial bloody morass in Congo.

    Withdrawing now and leaving a power vacuum would create the perfect Hobbesian state of nature.  Lives would be nasty, brutish and short.

    I’d like to see us withdraw troops from a lot of places, but it’s not easy.  The Europeans screamed bloody murder when Rumsfeld said we would be closing some bases in Europe.  Everyone said we were punishing them.

    Posted by An observer from  on  01/02  at  09:54 PM

  10. Observer, I agree. The USA has certainly created a monster in Iraq but staying there and feeding the monster is not the answer. Some estimates are in the millions of people killed since the USA invaded in 1991. We are responsible for the bloodbath. No one knows for sure what will happen if the Occupation ended now. We do know what is happening while the Occupation continues.

    Yes, many in this country and also elsewhere enjoy the perceived economic advantages of military bases. Those screams to keep the bases are heard all over this country. I don’t believe that the military killing machine should be kept going because of economic motives. That would be like saying that killing your neighbor would be justified if it made you richer.

    This morning on Democracy Now, Amy interviewed John Perkins. Part 2 of the interview will be, maybe, tomorrow. Try to see or hear it. Perkins’ account of his time as an Economic Hit Man is something that all in the USA should know about. When I talked with him, I said that people all around the world should know about what he and others did, and continue to do. His answer to me was that those around the world already know. It is only those in this country who are kept in the dark.

    Posted by rosemarie jackowski from  on  01/03  at  10:12 AM

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