The Guardian 6 February, 2008

Iraq: Australia’s nice little earner

Australia’s involvement in the war in Iraq is one of the most controversial issues in the recent history of Australian foreign policy. However, there is a story of Australia’s involvement in Iraq that has not adequately been told, which relates directly to our military presence in the country.

The pursuit of financial gain has been a hallmark of Australia’s role as an occupier in Iraq.

This is the story of Australia’s interference as an occupying power in the Iraq economy and its political institutions interference that has advanced Australia’s commercial interests against the interests of the Iraqi people.

Almost a year after the 2003 invasion of Iraq, the 2004 Boxing Day tsunami generated an unprecedented outpouring of global compassion and humanitarian support.

Arguably, the human-made humanitarian crisis in Iraq is of equal, if not greater scope and intensity, yet much of Australia’s aid to Iraq has been used to advance Australian interests rather than to address the advancing humanitarian crisis.

Between April 21, 2003 and June 28, 2004, a series of aid funded officials were deployed into a Coalition Provisional Authority (CPA) in Iraq with an explicit mandate to rewrite Iraqi economic laws.

By funding CPA officials, especially in agriculture, Australia had direct responsibility for the removal of Iraq’s agricultural subsidies and protections and for seeking commercial advantage for Australian wheat growers in Iraq.

In the process, Australia flouted its international responsibilities and acted directly against the interests of Iraqi farmers.

It did so, despite the assurances given to Parliament on May 14, 2003 by Prime Minister John Howard that "we are not in the business of imposing a particular model of democracy on the Iraqi people… for only the Iraqi people are in a position to determine what is in their national interest".

Australia, along with the US and the UK formed the Coalition Provisional Authority (CPA).

The CPA was the official governing body of the military occupation until the hand-over of sovereignty to an Iraqi government, and had full executive, legislative and judicial authority over Iraq during this time.

The CPA was led by Paul Bremer, often referred to as the de-facto prime minister.

It is little known that Bremer’s history is as an executive of Henry Kissinger Associates, which has advised dictators such as Indonesia’s Suharto.

The CPA quickly introduced a radical, pro-corporate restructuring of the Iraqi economy.

Foreign corporations could own 100 percent of Iraqi industries and retain all the profits. Tariffs and import duties were rescinded, thus facilitating the flooding of the economy with cheap foreign products.

Australia benefited directly as a result, as Iraqi farmers would have no protection against increased wheat imports. Far from promoting Iraq’s own food security, as they repeatedly claimed, Australian officials paid by AusAID were focused on gaining ongoing wheat contracts.

As with the other Coalition of the Willing members, Australia’s actions regarding the CPA economic orders were clearly illegal.

International law states that an occupying power must re-establish and ensure as far as possible, public order and safety while respecting, unless absolutely prevented, the laws in force in the country.

In June 2003, the CPA announced that Iraq’s state-owned sector, with the exception of oil, would be privatised. It would be the CPA, not Iraqis, who would determine the selling price of these assets and how the income would be spent.

Further, CPA order 49 accomplished the dream of neo-liberal economists by creating a flat tax of 15 percent on individuals and corporations.

Herbert Docena, researcher for Focus on the Global South notes, "Doing away with the principle of progressive taxation, the idea that those who have more should contribute more, means that an Iraqi who earns $100 a month will have to pay the same percentage of tax as a corporation that earns $1 billion a month." While Iraqis were technically not prevented from buying or becoming shareholders once their state-owned industries were sold, few if any, could afford to do so.

The Iraqi economy was in a shambles after the invasion and subsequent looting, as well as more than ten years of sanctions and destruction from the first Gulf War.

The CPA also did the ground work for the long-term control of Iraq’s oil and ensured that its economic future and policies would be tied to the World Bank and IMF structural adjustment programs, including policies to eventually eliminate its food subsidies program upon which 60 percent of the population continues to depend for daily sustenance.

A key aspect of the macroeconomic policy devised with the strong input and support of Australians like Tony McDonald, funded through AusAID — was the CPA wage law which lowered public sector wages (more or less the whole country) from US$60 a month to US$40 while foreign workers were earning up to US$1,000 a day.

The CPA has failed to deliver on a large percentage of its restructuring commitments.

An audit conducted by the US found that only 49 of 136 projects that were originally pledged to improve Iraq’s water and sanitation would be finished.

Meanwhile, John Howard handpicked former Australian Wheat Board (AWB) chairman Trevor Flugge to be the co-head of the CPA’s Ministry for Agriculture.

He came to public attention as one of the alleged architects of the nearly AU$300 million of kickbacks paid to Saddam Hussein to guarantee wheat contracts under the UN Oil for Food program.

Significantly, Australia as co-head was directly responsible for the law which introduced a system of monopoly patent rights over seeds, facilitating future dominance of Iraq’s agriculture by Australia and the US.

Iraq is the ancient birthplace of agriculture, refining its wheat, legumes and other seed stock for years to suit local conditions, with a portion of each harvest kept as seed stock for the following year.

However, due to war, the seed stock has been depleted, and is now being replaced with seed developed by companies like Cargill and Monsanto.

It is illegal to plant those seeds without paying the patent owners a royalty.

With one stroke of the occupiers’ pen, 10,000 years of traditional knowledge and practice was swept away.

Under the Hussein regime, farming necessities were subsidised and land was leased from the government at a cheap rate. The crops were bought by the government at a fixed rate and then distributed free as flour to every family.

Flugge declared that the CPA would provide assistance in the form of technology and education and the market would take care of the rest.

Abu Ahmed Al-Hadithi, an Iraqi vegetable seller relates that "The cost of gas and food are going up so high that even if we make more now, everything costs more. So many vegetables are coming in from outside Iraq it means we have to sell ours for less, so I make less profit and my life is very difficult."

Australia flouted its international responsibilities and acted directly against the interests of Iraqi farmers

There is also a critical lack of farmers and labourers available, since most of the young men not killed by the invading or Iraqi troops are in jail or missing.

Australian aid has also funded the training of Iraqi police recruits and the military has been actively engaged in training the new Iraqi military.

Both the Iraqi police and the military have been directly linked to serious and widespread allegations of torture, kidnapping and extra-judicial killings.

The pursuit of financial gain has been a hallmark of Australia’s role as an occupier in Iraq.

A full audit of Australian aid spending, detailing the objectives and outcomes of Australian expenditure that supported the CPA should be made publicly available.

A growing body of research highlights the urgent need to ensure international aid is genuine in its assistance to recipient communities and their local and global environments and is not diverted to the domestic agendas of rich donor countries.

This is an edited version of a substantial report by Chris Doran for Aidwatch, and summarised for Adelaide Voices by Sue Shepherd

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