Abstract

Big Bucks in Iraq

The author claims that the Bush administration is pursuing economic policies in Iraq that will benefit large U.S. corporations, at the expense of local businesses. In early October, Iraq's US-appointed Governing Council awarded the country's first mobile phone licenses to three companies from the Middle East. The decision was widely interpreted as a signal that Paul Bremer's Coalition Provisional Authority (CPA) was expanding its contracting base beyond US corporations like Bechtel and Halliburton to give local companies a break. But any concerns about a US shutout from Iraq's telecom market were grossly exaggerated. The biggest winner in Iraq's largest foreign investment deal since the US invasion turned out to be Motorola, the US electronics giant. The story illustrates how the financial and trade policies the Bush Administration is pursuing in Iraq are not only benefiting well-connected US corporations but are also slowly integrating Iraq into the global economy and transforming its largely state-run economy into a captive market for foreign multinationals. The effect of Iraq's new foreign investment law for the medium and small-sized Iraqi business could be very detrimental and could result in even more concentration of capital in Iraq. When ideology drives policy, as it does in Iraq, pragmatism is swept aside and generals and bureaucrats hop to the beat of the Commander in Chief. Unfortunately, the outcome is likely to be more bloodshed, more chaos and more deals for American companies like Motorola.