The first foreign oil contract was signed in 2004. The salient fact is that this contract was signed by the semi-autonomous Kurdistan Regional Government (KRG) with a little-known Norwegian company (Muttit, 2011, p. 127). The parties to this contract, brokered clandestinely by American diplomat Peter Galbraith, may indicate why the larger oil companies chose not to participate. The Iraqi national government has declared such contracts unconstitutional under a 1967 law requiring parliamentary approval for any oil contracts. Any company signing an oil contract with the KRG is banned from operating in the rest of the country (O’Sullivan, 2011, p. 11). [Interestingly, the author of this paper, Meghan O’Sullivan, worked as head of Iraq policy at the National Security Council. After her resignation, she signed a contract to consult with Hess executives on oil policy and Hess signed an oil contract with KRG (Coll, 2012, pp. 568-571).] No firms partaking in such contracts have been prosecuted (Coll, 2012, p. 569).
Instead, many oil companies chose to sign bilateral contracts with the national Iraqi government to provide relatively modest services along the lines of those initially opposed by Bremer, who favored more drastic steps toward full privatization. Chevron signed the first, in June 2004, in order to provide technical assistance on the extraction of oil from previously undeveloped fields. Unlike the naked privatization schemes proposed by Bremer, Allawi (Schwartz, 2008, p. 60) and others, there may have been some benefits to the Iraqi people from such agreements, since Iraqi technology was far behind global advances due to years of war and sanctions (Yergin, 2011, pp. 151-152). Within a year, roughly thirty oil companies had jointly signed a relatively modest – and legal – contracts to provide training worth about $20 million to Iraqis (Coll, 2012, p. 563), which had the mutual benefit of allowing seismic exploration and other intelligence gathering. Unlike larger contracts, there was little to lose if the Iraqi government collapsed (Muttit, 2011, pp. 144-145).
As larger privatization ploys failed, the US turned to structural adjustment under the auspices of ‘debt relief.’ Of course, the IMF faced the same resistance that the CPA and the later American puppet government had. Due to the dual prongs of union resistance in the south and violent resistance in the non-Kurdish north, rewriting Iraq’s oil laws proceeded at what, to the oil companies, must have seemed like an exceedingly slow pace (Schwartz, 2008, pp. 61-67). The Iraqi government ultimately signed a series of contracts with the IMF with the conditions that the Iraqi oil sector move towards privatization (see “The IMF in Iraq”).
An eerily similar agreement, the International Compact for Iraq, was reached at the United Nations in 2007. In exchange for debt relief and a $2.5 billion loan from the World Bank, the Iraqi government agreed to develop an oil law favorable to foreign direct investment. As if the Mafioso implications were not clear enough, sources in al-Maliki’s office reported that the US threatened to withdraw support for his status as prime minister if he refused to pass such an agreement. The message was reinforced by a US Congressional resolution calling for passage of an amenable oil law (Muttitt, 2011, pp. 243-246).
Yet progress on an oil law continued to stall, thanks to resistance from virtually all levels of Iraqi society, including parliament. Perhaps drawing conclusions from the prior successful manipulation of al-Maliki, General Ray Odierno, commander of US forces in Iraq, issued a warning that, if Iraqis continued to prevent their national wealth from being stolen, the Americans would implode the entire Iraqi government. Reflecting the dependency that had been created over the past five years, these measures included:
"An end to $6.3 billion in aid and $10 billion a year in arms sales. The US would also stop sharing intelligence, providing air defence [sic], protecting the coast and oil export terminals, guarding the borders and training the military. It would no longer maintain the military hardware it had supplied, nor provide secure air transit to Iraqi officials. It would stop operating air traffic control and thereby close down Iraqi airspace. It would not hand over the Iraqi prisoners it held, and it would stop employing 200,000 Iraqis."
The agreement to auction off oil fields and remove US troops was signed within one month (Muttitt, 2011, pp. 290-291).
With the threat and use of force to create a pliant government and make a formerly self-sufficient economy utterly reliant on outsiders, the stage had been set for contracts to be signed with the oil giants. In symbolism indicative of the haughtiness and contempt of the war’s architects, the first non-Kurdish oilfields went up for auction on June 29, 2009 (International Resource Journal, 2009), the very day that American combat troops officially withdrew from Iraqi cities in accordance with the Status of Forces agreement (Rubin, 2009). This day also marked the first time ExxonMobil employees had entered the country since before the invasion, having preferred to meet with Iraqi officials outside of Iraq (Coll, 2012, p. 558).
In the auctions held since 2008, oil companies have made out like robber barons, though not quite as handsomely as they would have liked. Baker, Ismael, & Ismael (2010, p. 19) quote a study from Oil and Gas Journal to the effect that “Western oil companies estimate that they can produce a barrel of Iraqi oil for less than $US 1.50 and possibly as little as $US 1.’” The oil giants, on the other hand, offered initial bids of at least $4 and settled them at approximately $2 per barrel of pure profit (Muttitt, 2009, p. 4). For just one oil field, this could mean estimated profits of tens of billions of dollars and a 19 percent return on investment, according to Deutsche Bank. Furthermore, this oil can be booked on the companies’ reserve sheets, boosting the favored measure for oil company SEC and investor filings, and revenue to pay Kuwaiti reparations will not be scraped off the top (Coll, 2012, p. 574). As of the date of this writing, sixty percent of Iraq’s oil reserves have been sold. Such terms will lead to an estimated $74 to $194 billion in revenue for multinational corporations over the contracts’ twenty-year lifespan (Muttitt, 2009, p. 4). As if this weren’t enough, the American government invested $4 billion of taxpayer money to reconstruct Iraq’s oil sector. By 2010, this oil was flowing to supertankers on the Persian Gulf (Coll, 2012, pp. 559, 575). This would seem less egregious than full privatization but is missing the larger picture :the oil companies had met all of their objectives.
An oft-repeated point, particularly by apologists for American state violence, is that American interests did not win or even bid on contracts to drill most of Iraq’s oil fields (Walt, 2009). This is correct but misleading. American or British partnerships won the rights to four of the five largest fields in Iraq, with the lone exception being Russia and Norway’s contract on the West Qurna-2 field, the third-largest in Iraq (Halperin, 2011, p. 213-214). In addition to siphoning off Iraqi oil profits for foreign oil corporations, the occupation also expropriated petrodollars directly, as discussed in later posts.
References
Baker, Raymond, Shereen Ismael and Tareq Ismael (ed.). 2010. Cultural Cleansing in Iraq: Why Museums Were Looted, Libraries Burned and Academics Murdered. Pluto Press.
Coll, Steve. 2012. Private Empire: ExxonMobil and American Power. Penguin Press.
Halperin, Sandra. 2011. “The Political Economy of Anglo-American War: The Case of Iraq.” International Politics 48(2/3), pp. 207-228.
International Resource Journal. 2009. “Iraq Oil Auctions.” http://www.internationalresourcejournal.com/features/oct09_features/iraq_oil_auctions.html.
Muttitt, Greg. 2011. Fuel on the Fire: Oil and Politics in Occupied Iraq. Bodley Head: Random House.
O’Sullivan, Meghan. 2011. “Iraqi Politics and Implications for Oil and Energy.” Harvard Kennedy School Faculty Research Working Paper Series.
Rubin, Alissa J. July 1, 2009. “Iraq Marks Withdrawal of US Troops from Cities.” New York Times.
Schwartz, Michael. 2008. War without End: The Iraq War in Context. Haymarket Books.
Walt, Vivienne. December 19, 2009. “US Companies Shut Out as Iraq Auctions Its Oil Fields.” Time Magazine.
Yergin, Daniel. 2011. The Quest: Energy, Security, and the Remaking of the Modern World. Penguin Press.
History of the Iraq War, Part IX: Iraqi Resistance and Oil Unions
Coalition Provisional Authority head Paul Bremer’s tenure from 2003-4 included steps designed to facilitate the privatization of Iraqi oil. Initially, he permitted continued oil extraction by the Iraqi national oil companies while attempting to transfer control over auxiliary services (refining, shipping, marketing) to Halliburton (Schwartz, 2008, pp. 58-59).
This led to the first case of successful resistance to the occupation by Iraqi oil workers, on June 20, 2003, and dramatically illustrates the growing power that Iraqi unions, using both strikes and the threat of violence, had over the flow of oil and, hence, the American government. In the build-up to this event, workers at the Basra refinery in southern Iraq had not received their wages for two months. In response, that morning (Muttitt, 2011, p. 89):
"Around 100 workers arrived at Basra refinery and, rather than going to work, placed a crane across the access road in protest, preventing vehicles getting in or out. It did not take long for Coalition troops to arrive, and several armoured [sic] vehicles accompanied the next convoy of tankers. The soldiers threatened to shoot. Some workers tore off their shirts. ‘Shoot!’ they shouted, pointing at their chests. Others ducked under the tankers. At first their aim was simply to stop the trucks driving off, but as the tension escalated, some of them took out their cigarette lighters and threatened to set fire to the tankers. The military offered to negotiate. Throughout his discussions with a British general, the refinery director kept in touch with union leaders by radio. By noon the problem was resolved: salaries would be paid within 24 hours."
That day, membership in the union increased from 100 to 3,000, and grew to 23,000, or half of the national oil industry, within two years (Muttitt, 2011, p. 148). The offending contract transferring supporting services to Halliburton was voided. As if to reinforce the power of resistance centered on the oil industry, another strike at the Basra refinery in 2007 saw al-Maliki send in troops and armored vehicles, then withdraw them and accede to the unionists’ demands in face-to-face negotiations with the union leader (Blanchard, 2009, p. 14).
It is hard to imagine that the lessons of this showdown were lost to either American corporate boardrooms or the Iraqi resistance, who began attacks on oil infrastructure in the north. By June 2004, production of 1.6 million barrels of oil per day had dwindled to zero (Yergin, 2011, pp. 157-158), leading to the patrolling of pipelines by American snipers and attack helicopters (Klare, 2004, pp. 101-102).
Nevertheless, ‘counterinsurgency’ death squads and the machinations of the puppet Iraqi government gradually wore down union effectiveness. Having seen that generalized repression of oil workers did not work, the American military turned to assassinations of union and other Iraqi leaders. In a heroic series of essays collected by Baker, Ismael, & Ismael (2010), Iraqi exiles and sympathizers document the destruction of the intellectual class in Iraq. The authors plausibly argue that because of the sophistication of the attacks and the ‘failure’ of any of the perpetrators to be brought to justice, these attacks were likely orchestrated by American intelligence. The targeted killing of union leaders is another facet of the decapitation of the Iraqi state apparatus (Muttitt, 2011, pp. 234-235), one consistent with the death squads deployed against unions in other American spheres of influence, such as a Ford factory in Argentina (Klein, 2007, p. 108), as well as instilling reliance on foreign technicians to operate the Iraqi oil sector.
The efforts by Oil Minister Shahristani to crush Iraqi oil unions were no less subtle. He ordered the arrest of two prominent union leaders under Saddam’s 1987 law prohibiting union organization in the public sector, one law that Bremer was happy to keep on the books, and arrested another for sedition (Gentile, 2010). Shahristani’s favored tactic was to transfer union leaders (who were, after all, employed by the government) from their relatively peaceful sectors to areas of the country in the midst of a civil war (Muttitt, 2011, pp. 333-335).
Resistance from so-called ‘insurgents’ was a potent deterrent to the stability necessary for foreign investment and profits. However, large-scale violence of itself does not preclude resource extraction – and in fact is often the cause of violence. The wealth of multinational oil companies allows them to employ private mercenary forces, often in concert with co-opted national governments (Ferguson, 2005, p. 379). For foreign oil companies to operate in Iraq required not pacification, but rather security at oilfields and infrastructure often far removed from the centers of upheaval.
References
Baker, Raymond, Shereen Ismael and Tareq Ismael (ed.). 2010. Cultural Cleansing in Iraq: Why Museums Were Looted, Libraries Burned and Academics Murdered. Pluto Press.
Blanchard, Christopher M. 2009. “Iraq: Oil and Gas Legislation, Revenue Sharing and US Policy.” Congressional Research Service.
Ferguson, James. 2005. “Seeing Like an Oil Company: Space, Security, and Global Capital in Neoliberal Africa.” American Anthropologist 107(3), pp. 377-382.
Gentile, Carmen. 2010. “Union Leaders Taken to Court for Oil Sector Dissent.” Iraq Oil Report. http://www.iraqoilreport.com/politics/oil-policy/union-leaders-taken-to-court-for-oil-sector-dissent-4698/.
Klare, Michael. 2004. Blood and Oil: The Dangers and Consequences of America’s Growing Dependency on Imported Petroleum. Holt Books.
Klein, Naomi. 2007. The Shock Doctrine: The Rise of Disaster Capitalism. Metropolitan Books.
Muttitt, Greg. 2011. Fuel on the Fire: Oil and Politics in Occupied Iraq. Bodley Head: Random House.
Schwartz, Michael. 2008. War without End: The Iraq War in Context. Haymarket Books.
Yergin, Daniel. 2011. The Quest: Energy, Security, and the Remaking of the Modern World. Penguin Press.
This led to the first case of successful resistance to the occupation by Iraqi oil workers, on June 20, 2003, and dramatically illustrates the growing power that Iraqi unions, using both strikes and the threat of violence, had over the flow of oil and, hence, the American government. In the build-up to this event, workers at the Basra refinery in southern Iraq had not received their wages for two months. In response, that morning (Muttitt, 2011, p. 89):
"Around 100 workers arrived at Basra refinery and, rather than going to work, placed a crane across the access road in protest, preventing vehicles getting in or out. It did not take long for Coalition troops to arrive, and several armoured [sic] vehicles accompanied the next convoy of tankers. The soldiers threatened to shoot. Some workers tore off their shirts. ‘Shoot!’ they shouted, pointing at their chests. Others ducked under the tankers. At first their aim was simply to stop the trucks driving off, but as the tension escalated, some of them took out their cigarette lighters and threatened to set fire to the tankers. The military offered to negotiate. Throughout his discussions with a British general, the refinery director kept in touch with union leaders by radio. By noon the problem was resolved: salaries would be paid within 24 hours."
That day, membership in the union increased from 100 to 3,000, and grew to 23,000, or half of the national oil industry, within two years (Muttitt, 2011, p. 148). The offending contract transferring supporting services to Halliburton was voided. As if to reinforce the power of resistance centered on the oil industry, another strike at the Basra refinery in 2007 saw al-Maliki send in troops and armored vehicles, then withdraw them and accede to the unionists’ demands in face-to-face negotiations with the union leader (Blanchard, 2009, p. 14).
It is hard to imagine that the lessons of this showdown were lost to either American corporate boardrooms or the Iraqi resistance, who began attacks on oil infrastructure in the north. By June 2004, production of 1.6 million barrels of oil per day had dwindled to zero (Yergin, 2011, pp. 157-158), leading to the patrolling of pipelines by American snipers and attack helicopters (Klare, 2004, pp. 101-102).
Nevertheless, ‘counterinsurgency’ death squads and the machinations of the puppet Iraqi government gradually wore down union effectiveness. Having seen that generalized repression of oil workers did not work, the American military turned to assassinations of union and other Iraqi leaders. In a heroic series of essays collected by Baker, Ismael, & Ismael (2010), Iraqi exiles and sympathizers document the destruction of the intellectual class in Iraq. The authors plausibly argue that because of the sophistication of the attacks and the ‘failure’ of any of the perpetrators to be brought to justice, these attacks were likely orchestrated by American intelligence. The targeted killing of union leaders is another facet of the decapitation of the Iraqi state apparatus (Muttitt, 2011, pp. 234-235), one consistent with the death squads deployed against unions in other American spheres of influence, such as a Ford factory in Argentina (Klein, 2007, p. 108), as well as instilling reliance on foreign technicians to operate the Iraqi oil sector.
The efforts by Oil Minister Shahristani to crush Iraqi oil unions were no less subtle. He ordered the arrest of two prominent union leaders under Saddam’s 1987 law prohibiting union organization in the public sector, one law that Bremer was happy to keep on the books, and arrested another for sedition (Gentile, 2010). Shahristani’s favored tactic was to transfer union leaders (who were, after all, employed by the government) from their relatively peaceful sectors to areas of the country in the midst of a civil war (Muttitt, 2011, pp. 333-335).
Resistance from so-called ‘insurgents’ was a potent deterrent to the stability necessary for foreign investment and profits. However, large-scale violence of itself does not preclude resource extraction – and in fact is often the cause of violence. The wealth of multinational oil companies allows them to employ private mercenary forces, often in concert with co-opted national governments (Ferguson, 2005, p. 379). For foreign oil companies to operate in Iraq required not pacification, but rather security at oilfields and infrastructure often far removed from the centers of upheaval.
References
Baker, Raymond, Shereen Ismael and Tareq Ismael (ed.). 2010. Cultural Cleansing in Iraq: Why Museums Were Looted, Libraries Burned and Academics Murdered. Pluto Press.
Blanchard, Christopher M. 2009. “Iraq: Oil and Gas Legislation, Revenue Sharing and US Policy.” Congressional Research Service.
Ferguson, James. 2005. “Seeing Like an Oil Company: Space, Security, and Global Capital in Neoliberal Africa.” American Anthropologist 107(3), pp. 377-382.
Gentile, Carmen. 2010. “Union Leaders Taken to Court for Oil Sector Dissent.” Iraq Oil Report. http://www.iraqoilreport.com/politics/oil-policy/union-leaders-taken-to-court-for-oil-sector-dissent-4698/.
Klare, Michael. 2004. Blood and Oil: The Dangers and Consequences of America’s Growing Dependency on Imported Petroleum. Holt Books.
Klein, Naomi. 2007. The Shock Doctrine: The Rise of Disaster Capitalism. Metropolitan Books.
Muttitt, Greg. 2011. Fuel on the Fire: Oil and Politics in Occupied Iraq. Bodley Head: Random House.
Schwartz, Michael. 2008. War without End: The Iraq War in Context. Haymarket Books.
Yergin, Daniel. 2011. The Quest: Energy, Security, and the Remaking of the Modern World. Penguin Press.
History of the Iraq War, Part VIII: Invasion and Initial Steps to Oil Privatization
The American oil industry was front and center in planning to ‘reconstruct’ the Iraqi oil industry after the war. Former Shell CEO Philip Carroll was brought on board in 2002 and encouraged planners to craft an orderly transition of power over the Iraqi oil sector. In early 2003, before the invasion, he committed to heading American efforts at the nominally Iraqi oil ministry (Yergin, 2011, p. 141) and was joined by a number of other American corporate oil officers (Juhasz, 2008, p. 3460.
Yet the decision to go to war might not have been as clear-cut as some commentators have suggested. Within the American oil industry, there was some tactical debate over the wisdom of the invasion. Make no mistake about it, oil executives care about profits – not the law, weapons of mass destruction, protect human rights, or any other obfuscation. ExxonMobil chief Lee Raymond pushed the Bush administration for stability conducive to investment (Coll, 2012, p. 248). A related concern was the status of Iraqi oil revenues: oil giants wanted control over reserves, an important metric for investors, while the current scheme ran oil revenues through UN-administered accounts to pay for Kuwaiti reparations and the Oil-for-Food Program (Coll, 2012, p. 564). As BP CEO Sir John Browne put it (Yergin, 2011, p. 147):
"You know what I’ll say to the first person in our company who comes to us with a proposal to invest a billion dollars in Iraq? I’ll say, ‘Tell us about the legal system, tell us about the political system. Tell us about the economic system and about the contractual and fiscal systems, and tell us about arbitration. And tell us about security, and tell us about the evolution of the political system. Tell us about all those things, and then we’ll talk about whether we’re going to invest or not.’"
These debates were moot once the bombs started falling and protection of oil facilities became a primary focus of American military force. Prior to the invasion, “US airships patrolled the pipelines and other vulnerable installations to prevent sabotage” (Schwartz, 2008, p. 51), while US Marines seized control of the Rumaila oil field in southern Iraq less than 24 hours into the invasion (Klare, 2004, pp. 100-101). At the onset of the 2003 invasion, while the US military was unleashing a terrorist bombing of the peaceful city of Baghdad and allowing Iraq’s social structure, including hospitals, schools, ministries, and libraries, to be burned and torn to shreds, and even did nothing to prevent looting of weapons depots, a nuclear research laboratory and a former chemical weapons complex (Muttitt, 2011, p. 53), full protection was given to “the Oil Ministry, oil facilities, and oil infrastructure” (Juhasz, 2008, p. 351). If the ultimate goal was to ensure viability of the oil sector, selective protection of these buildings and pipelines while the country crumbled to ashes around it was shortsighted. The oil sector relied on the function of the larger economy, such as electricity, water, computers, skilled workers, and even a police force that Saddam’s government had set up just for the industry (Yergin, 2011, p. 155).
After the fall of Baghdad, instead of allowing competent Iraqi technocrats to continue their work, “representatives of US oil companies ran Iraq’s oil ministry immediately following the invasion and held high-level oversight roles thereafter. Executives of ConocoPhillips, ExxonMobil, Chevron, Shell, and BP each took a turn guiding Iraq’s oil industry” (Juhasz, 2008, p. 346). Interestingly, if ConocoPhillips is replaced with Total, this is the same oligopoly that controlled Iraq’s oil after World War I (Baker, Ismael, & Ismael, 2010, p. 20). Despite these clear signals of American designs, the oil sector was not privatized for many years, and then, only partially.
It was not for lack of effort that oil was not privatized as quickly as the rest of the country’s industries, a conundrum lost on most commentators sympathetic to the ‘War for Oil’ theory. Juhasz (2008, pp. 344, 352-353), Schwartz (2008, pp. 52, 59-60) and Klare (2004, pp. 103-105) are all thorough scholars who nevertheless make the confused argument that Iraqi oil was not handed out to Western oil companies for three interconnected reasons: 1) Iraqi resistance, both violent and non-; 2) it is illegal under the Hague Conventions for an occupying government to drastically change the laws of the occupied country; 3) immediate privatization would risk raising the ire of the Iraqi public. The second argument is clearly disingenuous, as the entire war, along with Coalition Provisional Authority Paul Bremer’s economic laws, are themselves violations of international law (Falk, 2008), a fact that presumably will not cause oil profiteers to lose sleep. Since these authors’ books were published, dozens of contracts have been signed, all illegal under a still-in-force 1967 law that requires parliamentary approval of any oil contracts (O’Sullivan, 2011, p. 8). The third argument fails to pass scrutiny in light of the US-led destruction of Iraq. Indeed, “shock and awe” was designed to terrify the population!
References
Baker, Raymond, Shereen Ismael and Tareq Ismael (ed.). 2010. Cultural Cleansing in Iraq: Why Museums Were Looted, Libraries Burned and Academics Murdered. Pluto Press.
Coll, Steve. 2012. Private Empire: ExxonMobil and American Power. Penguin Press.
Falk, Richard. The Costs of War: International Law, the UN, and World Order after Iraq. Routledge. 2008.
Juhasz, Antonia. 2008. The Tyranny of Oil: The World’s Most Powerful Industry – and What We Must Do to Stop It. Harper.
Klare, Michael. 2004. Blood and Oil: The Dangers and Consequences of America’s Growing Dependency on Imported Petroleum. Holt Books.
Muttitt, Greg. 2011. Fuel on the Fire: Oil and Politics in Occupied Iraq. Bodley Head: Random House.
O’Sullivan, Meghan. 2011. “Iraqi Politics and Implications for Oil and Energy.” Harvard Kennedy School Faculty Research Working Paper Series.
Schwartz, Michael. 2008. War without End: The Iraq War in Context. Haymarket Books.
Yergin, Daniel. 2011. The Quest: Energy, Security, and the Remaking of the Modern World. Penguin Press.
Yet the decision to go to war might not have been as clear-cut as some commentators have suggested. Within the American oil industry, there was some tactical debate over the wisdom of the invasion. Make no mistake about it, oil executives care about profits – not the law, weapons of mass destruction, protect human rights, or any other obfuscation. ExxonMobil chief Lee Raymond pushed the Bush administration for stability conducive to investment (Coll, 2012, p. 248). A related concern was the status of Iraqi oil revenues: oil giants wanted control over reserves, an important metric for investors, while the current scheme ran oil revenues through UN-administered accounts to pay for Kuwaiti reparations and the Oil-for-Food Program (Coll, 2012, p. 564). As BP CEO Sir John Browne put it (Yergin, 2011, p. 147):
"You know what I’ll say to the first person in our company who comes to us with a proposal to invest a billion dollars in Iraq? I’ll say, ‘Tell us about the legal system, tell us about the political system. Tell us about the economic system and about the contractual and fiscal systems, and tell us about arbitration. And tell us about security, and tell us about the evolution of the political system. Tell us about all those things, and then we’ll talk about whether we’re going to invest or not.’"
These debates were moot once the bombs started falling and protection of oil facilities became a primary focus of American military force. Prior to the invasion, “US airships patrolled the pipelines and other vulnerable installations to prevent sabotage” (Schwartz, 2008, p. 51), while US Marines seized control of the Rumaila oil field in southern Iraq less than 24 hours into the invasion (Klare, 2004, pp. 100-101). At the onset of the 2003 invasion, while the US military was unleashing a terrorist bombing of the peaceful city of Baghdad and allowing Iraq’s social structure, including hospitals, schools, ministries, and libraries, to be burned and torn to shreds, and even did nothing to prevent looting of weapons depots, a nuclear research laboratory and a former chemical weapons complex (Muttitt, 2011, p. 53), full protection was given to “the Oil Ministry, oil facilities, and oil infrastructure” (Juhasz, 2008, p. 351). If the ultimate goal was to ensure viability of the oil sector, selective protection of these buildings and pipelines while the country crumbled to ashes around it was shortsighted. The oil sector relied on the function of the larger economy, such as electricity, water, computers, skilled workers, and even a police force that Saddam’s government had set up just for the industry (Yergin, 2011, p. 155).
After the fall of Baghdad, instead of allowing competent Iraqi technocrats to continue their work, “representatives of US oil companies ran Iraq’s oil ministry immediately following the invasion and held high-level oversight roles thereafter. Executives of ConocoPhillips, ExxonMobil, Chevron, Shell, and BP each took a turn guiding Iraq’s oil industry” (Juhasz, 2008, p. 346). Interestingly, if ConocoPhillips is replaced with Total, this is the same oligopoly that controlled Iraq’s oil after World War I (Baker, Ismael, & Ismael, 2010, p. 20). Despite these clear signals of American designs, the oil sector was not privatized for many years, and then, only partially.
It was not for lack of effort that oil was not privatized as quickly as the rest of the country’s industries, a conundrum lost on most commentators sympathetic to the ‘War for Oil’ theory. Juhasz (2008, pp. 344, 352-353), Schwartz (2008, pp. 52, 59-60) and Klare (2004, pp. 103-105) are all thorough scholars who nevertheless make the confused argument that Iraqi oil was not handed out to Western oil companies for three interconnected reasons: 1) Iraqi resistance, both violent and non-; 2) it is illegal under the Hague Conventions for an occupying government to drastically change the laws of the occupied country; 3) immediate privatization would risk raising the ire of the Iraqi public. The second argument is clearly disingenuous, as the entire war, along with Coalition Provisional Authority Paul Bremer’s economic laws, are themselves violations of international law (Falk, 2008), a fact that presumably will not cause oil profiteers to lose sleep. Since these authors’ books were published, dozens of contracts have been signed, all illegal under a still-in-force 1967 law that requires parliamentary approval of any oil contracts (O’Sullivan, 2011, p. 8). The third argument fails to pass scrutiny in light of the US-led destruction of Iraq. Indeed, “shock and awe” was designed to terrify the population!
References
Baker, Raymond, Shereen Ismael and Tareq Ismael (ed.). 2010. Cultural Cleansing in Iraq: Why Museums Were Looted, Libraries Burned and Academics Murdered. Pluto Press.
Coll, Steve. 2012. Private Empire: ExxonMobil and American Power. Penguin Press.
Falk, Richard. The Costs of War: International Law, the UN, and World Order after Iraq. Routledge. 2008.
Juhasz, Antonia. 2008. The Tyranny of Oil: The World’s Most Powerful Industry – and What We Must Do to Stop It. Harper.
Klare, Michael. 2004. Blood and Oil: The Dangers and Consequences of America’s Growing Dependency on Imported Petroleum. Holt Books.
Muttitt, Greg. 2011. Fuel on the Fire: Oil and Politics in Occupied Iraq. Bodley Head: Random House.
O’Sullivan, Meghan. 2011. “Iraqi Politics and Implications for Oil and Energy.” Harvard Kennedy School Faculty Research Working Paper Series.
Schwartz, Michael. 2008. War without End: The Iraq War in Context. Haymarket Books.
Yergin, Daniel. 2011. The Quest: Energy, Security, and the Remaking of the Modern World. Penguin Press.
History of the Iraq War, Part VII: America's Quest for Iraqi Oil - Background (through 2003)
In contrast to Saudi Arabia, Iraq has not always been a malleable nation. From the discovery of oil in Iraq in 1927, Western oil companies were granted extraction rights, out of which they paid royalties to the Iraqi government. In 1927, the Iraq Petroleum Company was formed and divided among a cabal of French, American, British and Iranian corporations, providing an American foothold for the first time (Zalloum, 2007, pp. 26-32). This system ended when Iraq fully nationalized its oil in 1972 (Coll, 2012, p. 558). Over the following seven years, production increased from 1.5 to 3.5 million barrels a day (Muttitt, 2011, p. 18). During the Reagan administration, steps were taken toward rapprochement, with US companies permitted to market Iraqi oil, as a possible quid pro quo for military aid and sizable loans to help Iraq fight Iran. Marketing contracts with the big oil companies continued – both legally and illegally – under the sanctions regime and Oil-for-Food program, and remain today (Juhasz, 2008, pp. 326-329).
Sponeck discusses the impact of the sanctions at length in his dry and technical memoir describing the effects of the Oil-for-Food program, which he administered from 1998-2000. Iraqi oil proceeds were used by foreigners to administer initiatives that they deemed desirable. In this case, Iraqi oil funded 100% of the budget of the Oil-for-Food program and revenue was deposited in a trust account held at the Banque Nationale de Paris, which received the interest payments. Officials from permanent United Nations Security Council nations were then responsible for determining what goods (e.g., foods, medicines) would be purchased abroad for the Iraqi people using their money (Sponeck, 2006, pp. 11-13). The United States and Britain threatened use of their Security Council vetoes to prevent the lifting of sanctions (Halperin, 2011, p. 211). The pattern of resource extraction and paternalism will become familiar to the reader (see “Who Pays the Costs?” and “Who Reaps the Benefits?”).
The funding of the Gulf and Iraq wars presents illustrative contrasts. “Only the 1991 Gulf War stands as a direct example” of “extracting revenue to pay the costs of empire” (Rosen, 2003). Johnson (2000, p. 25) maintains that the Gulf War cost the American government nothing, and perhaps allowed it to extract a small profit. For example, Japan alone paid $13 billion and Saudi Arabia, Kuwait, the United Arab Emirates and Germany each chipped in more than $1 billion (Arrighi, 2005). Ironically, since Iraq was forced to pay and continues to pay reparations to Kuwait for its bellicosity, Iraq partially financed its own invasion (Sponeck, 2006, p. 175). In the current Iraq war, Japan has paid $1.5 billion, an order of magnitude lower than its commitments for the Gulf War when adjusted for inflation (Arrighi, 2005). In Arrighi’s conception, the American protection racket was no longer as effective at extortion due to the demise of the Soviet-Russian threat and the destructiveness of neoliberalism.
References
Arrighi, Giovanni. May/June, 2005. “Hegemony Unraveling – II.” New Left Review 33.
Coll, Steve. 2012. Private Empire: ExxonMobil and American Power. Penguin Press.
Halperin, Sandra. 2011. “The Political Economy of Anglo-American War: The Case of Iraq.” International Politics 48(2/3), pp. 207-228.
Johnson, Chalmers. 2000. Blowback: The Costs and Consequences of American Empire. Metropolitan Books.
Juhasz, Antonia. 2008. The Tyranny of Oil: The World’s Most Powerful Industry – and What We Must Do to Stop It. Harper.
Rosen, Stephen. Spring, 2003. “An Empire, If You Can Keep It.” National Interest.
Sponeck, H. von. 2006. A Different Kind of War: The UN Sanctions Regime in Iraq. Berghahn Books.
Zalloum, Abdulhay Yahya. 2007. Oil Crusades: American through Arab Eyes. Pluto Press.
Sponeck discusses the impact of the sanctions at length in his dry and technical memoir describing the effects of the Oil-for-Food program, which he administered from 1998-2000. Iraqi oil proceeds were used by foreigners to administer initiatives that they deemed desirable. In this case, Iraqi oil funded 100% of the budget of the Oil-for-Food program and revenue was deposited in a trust account held at the Banque Nationale de Paris, which received the interest payments. Officials from permanent United Nations Security Council nations were then responsible for determining what goods (e.g., foods, medicines) would be purchased abroad for the Iraqi people using their money (Sponeck, 2006, pp. 11-13). The United States and Britain threatened use of their Security Council vetoes to prevent the lifting of sanctions (Halperin, 2011, p. 211). The pattern of resource extraction and paternalism will become familiar to the reader (see “Who Pays the Costs?” and “Who Reaps the Benefits?”).
The funding of the Gulf and Iraq wars presents illustrative contrasts. “Only the 1991 Gulf War stands as a direct example” of “extracting revenue to pay the costs of empire” (Rosen, 2003). Johnson (2000, p. 25) maintains that the Gulf War cost the American government nothing, and perhaps allowed it to extract a small profit. For example, Japan alone paid $13 billion and Saudi Arabia, Kuwait, the United Arab Emirates and Germany each chipped in more than $1 billion (Arrighi, 2005). Ironically, since Iraq was forced to pay and continues to pay reparations to Kuwait for its bellicosity, Iraq partially financed its own invasion (Sponeck, 2006, p. 175). In the current Iraq war, Japan has paid $1.5 billion, an order of magnitude lower than its commitments for the Gulf War when adjusted for inflation (Arrighi, 2005). In Arrighi’s conception, the American protection racket was no longer as effective at extortion due to the demise of the Soviet-Russian threat and the destructiveness of neoliberalism.
References
Arrighi, Giovanni. May/June, 2005. “Hegemony Unraveling – II.” New Left Review 33.
Coll, Steve. 2012. Private Empire: ExxonMobil and American Power. Penguin Press.
Halperin, Sandra. 2011. “The Political Economy of Anglo-American War: The Case of Iraq.” International Politics 48(2/3), pp. 207-228.
Johnson, Chalmers. 2000. Blowback: The Costs and Consequences of American Empire. Metropolitan Books.
Juhasz, Antonia. 2008. The Tyranny of Oil: The World’s Most Powerful Industry – and What We Must Do to Stop It. Harper.
Rosen, Stephen. Spring, 2003. “An Empire, If You Can Keep It.” National Interest.
Sponeck, H. von. 2006. A Different Kind of War: The UN Sanctions Regime in Iraq. Berghahn Books.
Zalloum, Abdulhay Yahya. 2007. Oil Crusades: American through Arab Eyes. Pluto Press.
History of the Iraq War, Part VI: The US and Middle Eastern Oil
Oil is the lifeblood of industrial economies. Klare notes that “from 1860 until World War II, [the United States] was the world’s leading oil producer, easily supplying its own needs and often generating a surplus for export…During World War II, for example, the United States was able to extract enough oil from domestic fields to satisfy the massive requirements of its own forces and those of its major allies.” However, after the war, the United States began importing far greater quantities of oil, a trend that has continued unabated (Klare, 2004, pp. 9-10).
It has been recognized for at least one hundred years that global oil demand would outstrip and ultimately exhaust supply. The imperial powers have acted to control diminishing reserves. Chomsky (1996, p. 192) observes that:
The United States did not need Middle East oil for itself. Rather, the goal was to ensure that the enormous profits from the energy system flow primarily to the United States, its British client, and their energy corporations, not to the people of the region, and that oil prices stay within the range most beneficial to the corporate economy, neither too high nor too low.
American power could also be exerted by restricting Soviet access and controlling the tap for potential rivals like Japan that did not have America’s wealth of natural energy resources (Mercille, 2011, pp. 331-332). We will see in later sections that this conception of global affairs can explain American actions with respect to the Iraqi economy.
Current domestic production can no longer feasibly satisfy American consumption. The United States economy and its reliance on oil has mushroomed to an extent that full reliance on domestic production for current oil uses would deplete all known American oil reserves in just four years (Figure 5). If oil is to stay a bulwark of the American economy, the United States, with 1.6% of proven worldwide oil reserves, must look elsewhere (Klare, 2004, pp. 17-19). As Dick Cheney put it when he was president of Halliburton (Baker, Ismael, & Ismael, 2010, p. 18):
By 2010 we will need on the order of an additional 50 million barrels a day. So where is the oil going to come from? Governments and the national oil companies are obviously controlling about ninety percent of the assets. Oil remains fundamentally a government business. While many regions of the world offer great oil opportunities, the Middle East with two-third of the world’s oil and the lowest cost is still where the prize ultimately lies.
Juhasz argues “one needs only a map showing Big Oil’s overseas operations, the world’s remaining oil reserves, and the oil transport routes to track the realignment and predict future deployments of the US military.” For example, since 2001 the United States has built new military bases in Iraq, Kuwait, Qatar, Turkey, Afghanistan, Kyrgyzstan, Uzbekistan, Tajikistan and Pakistan (2008, p. 321).
Along with the United States in general, Western oil corporations also need to find additional sources of reserves. Juhasz (2008, p. 320) reports that “within ten to fifteen years, the major oil companies will have depleted their own reserves unless major changes occur. The Federal Trade Commission estimated in 2004 that ExxonMobil and ConocoPhillips would most likely run out of oil in 2017, Chevron in 2016, and Shell and BP in 2015.”
There are two methods by which the United States government and its corporations control Middle Eastern oil: it is bought or stolen. The historical Saudi-American alliance is the preeminent example of the former. The Western-Saudi dependency was initiated by the British in the years preceding World War I and assumed by the Americans as the sun set on the British Empire. Though oil was not discovered in Saudi Arabia until 1938, imperial interest began in earnest as exploration in other Middle Eastern countries yielded large wells (Yergin, 2011, p. 286). In 1933, Standard Oil of California garnered a sixty-year lease on what was then an unknown quantity of Saudi Arabian oil, signaling the increasing clout of American power in the region. The first presidential action concerning Saudi Arabia was the 1943 extension by Roosevelt to of lucrative Lend-Lease aid to the kingdom. Substantial military and other aid began to flow to Saudi Arabia and has continued unabated, since supplemented by high-tech weapons sales (Klare, 2004, pp. 26-55).
One should not pretend this relationship was based on altruism. Unlike Iraq, which previously got its weapons from Soviet bloc exporters, much of the oil money in Saudi Arabia is recycled to American defense contractors (Halperin, 2011, p. 210). Comparisons by Zalloum (2007, pp. 21-22) illustrate the effects of a century of exploitation:
"The combined revenue of all OPEC countries from oil in 2003 was about $240 billion, less than the revenue of Wal-Mart for the same year. The total assets of the 480 Arab financial institutions and banks of all the Arab countries, including the oil-producing states, in 2004 amounted to $780 billion, less than two-thirds of the assets of just one American bank, Citigroup. Most of the petrodollars were recycled back to Western banks and American Treasury bills."
In a broader cost-benefit formulation of finances before the Iraq War, “maintaining access to Persian Gulf oil requires about $50 billion of the annual US defense budget, including maintenance of one or more carrier task forces there, protecting sea lanes, and keeping large air forces in readiness in the area. But the oil we import from the Persian Gulf costs only a fifth that amount, about $11 billion per annum” (Johnson, 2000, p. 87). The World Bank gave more than $5 billion in subsidies to the global oil industry since 1992 (Juhasz, 2008, p. 392). Such oil imperialism is the modus operandi for the ‘agreements’ foisted on Iraq by force (see “Contracts at Gunpoint”).
References
Baker, Raymond, Shereen Ismael and Tareq Ismael (ed.). 2010. Cultural Cleansing in Iraq: Why Museums Were Looted, Libraries Burned and Academics Murdered. Pluto Press.
Chomsky, Noam. 1996. World Orders Old and New. Columbia University Press.
Halperin, Sandra. 2011. “The Political Economy of Anglo-American War: The Case of Iraq.” International Politics 48(2/3), pp. 207-228.
Johnson, Chalmers. 2000. Blowback: The Costs and Consequences of American Empire. Metropolitan Books.
Juhasz, Antonia. 2008. The Tyranny of Oil: The World’s Most Powerful Industry – and What We Must Do to Stop It. Harper.
Klare, Michael. 2004. Blood and Oil: The Dangers and Consequences of America’s Growing Dependency on Imported Petroleum. Holt Books.
Mercille, Julien. 2010. “The Radical Geopolitics of US Foreign Policy: The 2003 Iraq War.” GeoJournal 75, pp. 327-337.
Yergin, Daniel. 2011. The Quest: Energy, Security, and the Remaking of the Modern World. Penguin Press.
Zalloum, Abdulhay Yahya. 2007. Oil Crusades: American through Arab Eyes. Pluto Press.
It has been recognized for at least one hundred years that global oil demand would outstrip and ultimately exhaust supply. The imperial powers have acted to control diminishing reserves. Chomsky (1996, p. 192) observes that:
The United States did not need Middle East oil for itself. Rather, the goal was to ensure that the enormous profits from the energy system flow primarily to the United States, its British client, and their energy corporations, not to the people of the region, and that oil prices stay within the range most beneficial to the corporate economy, neither too high nor too low.
American power could also be exerted by restricting Soviet access and controlling the tap for potential rivals like Japan that did not have America’s wealth of natural energy resources (Mercille, 2011, pp. 331-332). We will see in later sections that this conception of global affairs can explain American actions with respect to the Iraqi economy.
Current domestic production can no longer feasibly satisfy American consumption. The United States economy and its reliance on oil has mushroomed to an extent that full reliance on domestic production for current oil uses would deplete all known American oil reserves in just four years (Figure 5). If oil is to stay a bulwark of the American economy, the United States, with 1.6% of proven worldwide oil reserves, must look elsewhere (Klare, 2004, pp. 17-19). As Dick Cheney put it when he was president of Halliburton (Baker, Ismael, & Ismael, 2010, p. 18):
By 2010 we will need on the order of an additional 50 million barrels a day. So where is the oil going to come from? Governments and the national oil companies are obviously controlling about ninety percent of the assets. Oil remains fundamentally a government business. While many regions of the world offer great oil opportunities, the Middle East with two-third of the world’s oil and the lowest cost is still where the prize ultimately lies.
Juhasz argues “one needs only a map showing Big Oil’s overseas operations, the world’s remaining oil reserves, and the oil transport routes to track the realignment and predict future deployments of the US military.” For example, since 2001 the United States has built new military bases in Iraq, Kuwait, Qatar, Turkey, Afghanistan, Kyrgyzstan, Uzbekistan, Tajikistan and Pakistan (2008, p. 321).
Along with the United States in general, Western oil corporations also need to find additional sources of reserves. Juhasz (2008, p. 320) reports that “within ten to fifteen years, the major oil companies will have depleted their own reserves unless major changes occur. The Federal Trade Commission estimated in 2004 that ExxonMobil and ConocoPhillips would most likely run out of oil in 2017, Chevron in 2016, and Shell and BP in 2015.”
There are two methods by which the United States government and its corporations control Middle Eastern oil: it is bought or stolen. The historical Saudi-American alliance is the preeminent example of the former. The Western-Saudi dependency was initiated by the British in the years preceding World War I and assumed by the Americans as the sun set on the British Empire. Though oil was not discovered in Saudi Arabia until 1938, imperial interest began in earnest as exploration in other Middle Eastern countries yielded large wells (Yergin, 2011, p. 286). In 1933, Standard Oil of California garnered a sixty-year lease on what was then an unknown quantity of Saudi Arabian oil, signaling the increasing clout of American power in the region. The first presidential action concerning Saudi Arabia was the 1943 extension by Roosevelt to of lucrative Lend-Lease aid to the kingdom. Substantial military and other aid began to flow to Saudi Arabia and has continued unabated, since supplemented by high-tech weapons sales (Klare, 2004, pp. 26-55).
One should not pretend this relationship was based on altruism. Unlike Iraq, which previously got its weapons from Soviet bloc exporters, much of the oil money in Saudi Arabia is recycled to American defense contractors (Halperin, 2011, p. 210). Comparisons by Zalloum (2007, pp. 21-22) illustrate the effects of a century of exploitation:
"The combined revenue of all OPEC countries from oil in 2003 was about $240 billion, less than the revenue of Wal-Mart for the same year. The total assets of the 480 Arab financial institutions and banks of all the Arab countries, including the oil-producing states, in 2004 amounted to $780 billion, less than two-thirds of the assets of just one American bank, Citigroup. Most of the petrodollars were recycled back to Western banks and American Treasury bills."
In a broader cost-benefit formulation of finances before the Iraq War, “maintaining access to Persian Gulf oil requires about $50 billion of the annual US defense budget, including maintenance of one or more carrier task forces there, protecting sea lanes, and keeping large air forces in readiness in the area. But the oil we import from the Persian Gulf costs only a fifth that amount, about $11 billion per annum” (Johnson, 2000, p. 87). The World Bank gave more than $5 billion in subsidies to the global oil industry since 1992 (Juhasz, 2008, p. 392). Such oil imperialism is the modus operandi for the ‘agreements’ foisted on Iraq by force (see “Contracts at Gunpoint”).
References
Baker, Raymond, Shereen Ismael and Tareq Ismael (ed.). 2010. Cultural Cleansing in Iraq: Why Museums Were Looted, Libraries Burned and Academics Murdered. Pluto Press.
Chomsky, Noam. 1996. World Orders Old and New. Columbia University Press.
Halperin, Sandra. 2011. “The Political Economy of Anglo-American War: The Case of Iraq.” International Politics 48(2/3), pp. 207-228.
Johnson, Chalmers. 2000. Blowback: The Costs and Consequences of American Empire. Metropolitan Books.
Juhasz, Antonia. 2008. The Tyranny of Oil: The World’s Most Powerful Industry – and What We Must Do to Stop It. Harper.
Klare, Michael. 2004. Blood and Oil: The Dangers and Consequences of America’s Growing Dependency on Imported Petroleum. Holt Books.
Mercille, Julien. 2010. “The Radical Geopolitics of US Foreign Policy: The 2003 Iraq War.” GeoJournal 75, pp. 327-337.
Yergin, Daniel. 2011. The Quest: Energy, Security, and the Remaking of the Modern World. Penguin Press.
Zalloum, Abdulhay Yahya. 2007. Oil Crusades: American through Arab Eyes. Pluto Press.
History of the Iraq War, Part V: American Military Strength
‘To those with a hammer, every problem looks like a nail.’
Boswell (2004, p. 519) maintains that diminishing economic productivity is the cause of imperial wars that benefit the United States and not its allies. American military power, technology and expenditures are unparalleled. In conventional warfare capability, America stands alone, with military budgets at approximately 47% of global expenditures (Hossein-Zadeh, 2006, p. 14), up from a ‘low’ of 35% in the first half of 2001 (Greenberg, 2011), in addition to maintaining 60% of total sea power (Boswell, 2004, p. 518).
Just as no analysis of the Vietnam War would be complete without discussion of the Domino Theory, one should not dismiss the potency of a post-Cold War ‘demonstration effect.’ Launching an expeditionary force to destroy a diplomatically isolated country has potent geopolitical ramifications. For a country that seeks to create and dominate the global economy, nations outside of the world system represent a threat. As Biglaiser and DeRouen (2007) argue in their study of 126 countries that were subject to American military intervention, promotion of the free market and investor rights for American companies is a primary factor behind use of the American military. Worldwide, there are US troops in more than one hundred and fifty countries (Department of Defense, 2009).
The destruction of Iraq served as a symbol. Adams and Osho (2006, p. 23) remind us that “in late 2000, Iraq began selling its oil for Euros. Iran soon followed suit and converted the majority of its central bank reserve funds to euros [sic]. By late 2002, North Korea also started adopting the Euro as its standard currency of trade.” In 2000, the $10 billion fund used to administer the Oil-for-Food Program and pay reparations to Kuwait was shifted from an American to a French bank (Halperin, 2011, p. 213). By isolating, punishing and killing Saddam Hussein and the Iraqi people over two decades, the United States government could send a message to other states in the ‘axis of evil’ that sought to frustrate American geopolitical aims (Mercille, 2010, pp. 332-334).
We would fully expect that in the absence of economic or diplomatic power to mold Iraq, the United States will use its comparative advantage: force (Coyne & Pellillo, in press).
References
Adams M, Osho G. 2006. “Policy Implications of the War in Iraq and Its Influence on the Global Market: A Public Affairs Perspective.” International Business & Economics Research Journal 5(10), pp. 21-25.
Biglaiser, Glen and Karl DeRouen. 2007. “Following the Flag: Troop Deployment and U.S. Foreign Investment.” International Studies Quarterly 51, pp. 835-854.
Boswell, Terry. 2004. “American World Empire or Declining Hegemony.” Journal of World-Systems Research 10(2), pp. 516-524.
Coyne, Christopher and Adam Pellillo. In press. “Economic Reconstruction amidst Conflict: Insights from Afghanistan and Iraq.” Defence and Peace Economics.
Department of Defense. 2009. “Active Duty Military Personnel Strengths by Regional Area and by Country.” http://siadapp.dmdc.osd.mil/personnel/MILITARY/history/hst0712.pdf.
Greenberg, Maurice R. “Trends in US Military Spending.” Council on Foreign Relations.
Halperin, Sandra. 2011. “The Political Economy of Anglo-American War: The Case of Iraq.” International Politics 48(2/3), pp. 207-228.
Hossein-Zadeh, Ismael. 2006. The Political Economy of US Militarism. Palgrave MacMillan.
Mercille, Julien. 2010. “The Radical Geopolitics of US Foreign Policy: The 2003 Iraq War.” GeoJournal 75, pp. 327-337.
Boswell (2004, p. 519) maintains that diminishing economic productivity is the cause of imperial wars that benefit the United States and not its allies. American military power, technology and expenditures are unparalleled. In conventional warfare capability, America stands alone, with military budgets at approximately 47% of global expenditures (Hossein-Zadeh, 2006, p. 14), up from a ‘low’ of 35% in the first half of 2001 (Greenberg, 2011), in addition to maintaining 60% of total sea power (Boswell, 2004, p. 518).
Just as no analysis of the Vietnam War would be complete without discussion of the Domino Theory, one should not dismiss the potency of a post-Cold War ‘demonstration effect.’ Launching an expeditionary force to destroy a diplomatically isolated country has potent geopolitical ramifications. For a country that seeks to create and dominate the global economy, nations outside of the world system represent a threat. As Biglaiser and DeRouen (2007) argue in their study of 126 countries that were subject to American military intervention, promotion of the free market and investor rights for American companies is a primary factor behind use of the American military. Worldwide, there are US troops in more than one hundred and fifty countries (Department of Defense, 2009).
The destruction of Iraq served as a symbol. Adams and Osho (2006, p. 23) remind us that “in late 2000, Iraq began selling its oil for Euros. Iran soon followed suit and converted the majority of its central bank reserve funds to euros [sic]. By late 2002, North Korea also started adopting the Euro as its standard currency of trade.” In 2000, the $10 billion fund used to administer the Oil-for-Food Program and pay reparations to Kuwait was shifted from an American to a French bank (Halperin, 2011, p. 213). By isolating, punishing and killing Saddam Hussein and the Iraqi people over two decades, the United States government could send a message to other states in the ‘axis of evil’ that sought to frustrate American geopolitical aims (Mercille, 2010, pp. 332-334).
We would fully expect that in the absence of economic or diplomatic power to mold Iraq, the United States will use its comparative advantage: force (Coyne & Pellillo, in press).
References
Adams M, Osho G. 2006. “Policy Implications of the War in Iraq and Its Influence on the Global Market: A Public Affairs Perspective.” International Business & Economics Research Journal 5(10), pp. 21-25.
Biglaiser, Glen and Karl DeRouen. 2007. “Following the Flag: Troop Deployment and U.S. Foreign Investment.” International Studies Quarterly 51, pp. 835-854.
Boswell, Terry. 2004. “American World Empire or Declining Hegemony.” Journal of World-Systems Research 10(2), pp. 516-524.
Coyne, Christopher and Adam Pellillo. In press. “Economic Reconstruction amidst Conflict: Insights from Afghanistan and Iraq.” Defence and Peace Economics.
Department of Defense. 2009. “Active Duty Military Personnel Strengths by Regional Area and by Country.” http://siadapp.dmdc.osd.mil/personnel/MILITARY/history/hst0712.pdf.
Greenberg, Maurice R. “Trends in US Military Spending.” Council on Foreign Relations.
Halperin, Sandra. 2011. “The Political Economy of Anglo-American War: The Case of Iraq.” International Politics 48(2/3), pp. 207-228.
Hossein-Zadeh, Ismael. 2006. The Political Economy of US Militarism. Palgrave MacMillan.
Mercille, Julien. 2010. “The Radical Geopolitics of US Foreign Policy: The 2003 Iraq War.” GeoJournal 75, pp. 327-337.
History of the Iraq War, Part IV: American Diplomatic Decline (1955-present)
The United Nations and Global Power
The shifting balance of global power away from the United States may explain the perception of an American pivot to a more unilateral and bellicose foreign policy, particularly in Iraq. The UN was formed in 1945 ostensibly to prevent future disastrous wars, but it has not functioned this way (Kagan, 2004). Rather, one could argue that the UN was meant to ensure the continuance of the status quo, with America at peak geopolitical power (Wallerstein, 2000, p. 259). Therefore, the UN is foremost a political body (Arrighi, 2005), in whose actions one can ascertain the relative influence of nations. A brief history of power distribution in the United Nations is necessary to demonstrate this point.
After the rush of post-1945 decolonization, most of the world’s people and countries were part of the Third World. Reflecting changing membership, the UN General Assembly became staunchly anti-colonial. Third World leaders used it as a forum to petition against colonialism and in 1960, the UN passed a resolution that called for “the end of colonialism in all its manifestations” (Emerson, 1965, pp. 495-496). The undemocratic structure of the UN Security Council also came under attack (Senghor, 1961, p. 325; Nkrumah, 1960, pp. 316-317). Partly because of Third World activism, in 1965 the Security Council was expanded from ten to fifteen countries, even as the five most powerful retained their vetoes. Despite ultimately impotent resolutions, the resulting change in UN power weakened American diplomatic leverage.
Quantifying Declines in American Diplomatic Power
The record of Security Council vetoes reflects changing global power dynamics and waning American influence. There have been striking variations in Security Council vetoes during different time periods. Chomsky (2004, pp. 29-30) observes “since the 1960s the US has been far in the lead in vetoing Security Council resolutions on a wide range of issues, even those calling on states to observe international law.” Declining American diplomatic power may provide some explanation as to why the United States government is perceived to have engaged in historically severe imperialism in its occupation of Iraq.
In the General Assembly, two recent UN votes depict the lack of American diplomatic control over a seemingly uncontroversial vote. Israel and the Federated States of Micronesia joined the US in abstaining from voting for a resolution on the Prevention of Outer Space Arms Race (globalissues.org, 2007). The Unclassified National Space Policy (2006, p. 1) explains that America is “committed to the exploration and use of outer space by all nations for peaceful purposes, and for the benefit of all humanity. Consistent with this principle, ‘peaceful purposes’ allow U.S. defense and intelligence-related activities in pursuit of national interests.” In 2008, America joined Zimbabwe in voting against creating a new UN Arms Trade Treaty, perhaps because America controls almost forty percent of the world’s arms trade (Baum, 2008).
At the least, diplomacy is necessary as a façade to placate those who might object to American unilateralism (Rosen, 2003). For countries with a powerful military, decreasing diplomatic power often leads to increasing violence.
References
Arrighi, Giovanni. May/June, 2005. “Hegemony Unraveling – II.” New Left Review 33.
Baum, Geraldine. November 1, 2008. “US Opposes Arms Trade Treaty.” The Los Angeles Times.
Chomsky, Noam. 2004. Hegemony or Survival: America’s Quest for Global Dominance. Holt Books.
Emerson, Rupert. 1965. “Colonialism, Political Development, and the UN.” International Organization 19(3), pp. 484-503.
GlobalIssues.org. January 21, 2007. “Militarization and Weaponization of Outer Space.” http://www.globalissues.org/article/69/militarization-and-weaponization-of-outer-space.
Kagan, Robert. March, 2004. “America’s Crisis of Legitimacy.” Foreign Affairs 83(2):65-87.
Nkrumah, Kwame. 1960. Speech to the United Nations. In M. Cook. 1964. On African Socialism. Praeger Press.
Rosen, Stephen. Spring, 2003. “An Empire, If You Can Keep It.” National Interest.
Senghor, Léopold. 1961. Nation et voies africaines du socilisme. Trans. M. Cook. 1964. On African Socialism. Praeger Press.
Unclassified National Space Policy. August 31, 2006. http://www.ostp.gov/galleries/default-file/Unclassified%20National%20Space%20Policy%20--%20FINAL.pdf.
Wallerstein, Immanuel. 2000. “The Three Instances of Hegemony in the History of the Capitalist World-Economy,” pp. 253-262 in The Essential Wallerstein. New Press.
The shifting balance of global power away from the United States may explain the perception of an American pivot to a more unilateral and bellicose foreign policy, particularly in Iraq. The UN was formed in 1945 ostensibly to prevent future disastrous wars, but it has not functioned this way (Kagan, 2004). Rather, one could argue that the UN was meant to ensure the continuance of the status quo, with America at peak geopolitical power (Wallerstein, 2000, p. 259). Therefore, the UN is foremost a political body (Arrighi, 2005), in whose actions one can ascertain the relative influence of nations. A brief history of power distribution in the United Nations is necessary to demonstrate this point.
After the rush of post-1945 decolonization, most of the world’s people and countries were part of the Third World. Reflecting changing membership, the UN General Assembly became staunchly anti-colonial. Third World leaders used it as a forum to petition against colonialism and in 1960, the UN passed a resolution that called for “the end of colonialism in all its manifestations” (Emerson, 1965, pp. 495-496). The undemocratic structure of the UN Security Council also came under attack (Senghor, 1961, p. 325; Nkrumah, 1960, pp. 316-317). Partly because of Third World activism, in 1965 the Security Council was expanded from ten to fifteen countries, even as the five most powerful retained their vetoes. Despite ultimately impotent resolutions, the resulting change in UN power weakened American diplomatic leverage.
Quantifying Declines in American Diplomatic Power
The record of Security Council vetoes reflects changing global power dynamics and waning American influence. There have been striking variations in Security Council vetoes during different time periods. Chomsky (2004, pp. 29-30) observes “since the 1960s the US has been far in the lead in vetoing Security Council resolutions on a wide range of issues, even those calling on states to observe international law.” Declining American diplomatic power may provide some explanation as to why the United States government is perceived to have engaged in historically severe imperialism in its occupation of Iraq.
In the General Assembly, two recent UN votes depict the lack of American diplomatic control over a seemingly uncontroversial vote. Israel and the Federated States of Micronesia joined the US in abstaining from voting for a resolution on the Prevention of Outer Space Arms Race (globalissues.org, 2007). The Unclassified National Space Policy (2006, p. 1) explains that America is “committed to the exploration and use of outer space by all nations for peaceful purposes, and for the benefit of all humanity. Consistent with this principle, ‘peaceful purposes’ allow U.S. defense and intelligence-related activities in pursuit of national interests.” In 2008, America joined Zimbabwe in voting against creating a new UN Arms Trade Treaty, perhaps because America controls almost forty percent of the world’s arms trade (Baum, 2008).
At the least, diplomacy is necessary as a façade to placate those who might object to American unilateralism (Rosen, 2003). For countries with a powerful military, decreasing diplomatic power often leads to increasing violence.
References
Arrighi, Giovanni. May/June, 2005. “Hegemony Unraveling – II.” New Left Review 33.
Baum, Geraldine. November 1, 2008. “US Opposes Arms Trade Treaty.” The Los Angeles Times.
Chomsky, Noam. 2004. Hegemony or Survival: America’s Quest for Global Dominance. Holt Books.
Emerson, Rupert. 1965. “Colonialism, Political Development, and the UN.” International Organization 19(3), pp. 484-503.
GlobalIssues.org. January 21, 2007. “Militarization and Weaponization of Outer Space.” http://www.globalissues.org/article/69/militarization-and-weaponization-of-outer-space.
Kagan, Robert. March, 2004. “America’s Crisis of Legitimacy.” Foreign Affairs 83(2):65-87.
Nkrumah, Kwame. 1960. Speech to the United Nations. In M. Cook. 1964. On African Socialism. Praeger Press.
Rosen, Stephen. Spring, 2003. “An Empire, If You Can Keep It.” National Interest.
Senghor, Léopold. 1961. Nation et voies africaines du socilisme. Trans. M. Cook. 1964. On African Socialism. Praeger Press.
Unclassified National Space Policy. August 31, 2006. http://www.ostp.gov/galleries/default-file/Unclassified%20National%20Space%20Policy%20--%20FINAL.pdf.
Wallerstein, Immanuel. 2000. “The Three Instances of Hegemony in the History of the Capitalist World-Economy,” pp. 253-262 in The Essential Wallerstein. New Press.
Subscribe to:
Posts (Atom)