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Privatized Iraq

Imposed economic and social policies raise human rights questions

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The disaster that is the ongoing occupation of Iraq is much more than the war that plays nightly across U.S. television screens. The violence of grinding poverty, exacerbated by economic sanctions after the first Gulf War, has been deepened by the U.S. invasion. Every day the economic policies of the occupying authorities—which remain in effect despite the appointment of an interim goverment—create more hunger among Iraq's working people, transforming them into a pool of low-wage, semi-employed labor, desperate for jobs at almost any price.

While the effects of U.S. policy on daily life go largely unseen in the U.S. media, anyone walking the streets of Baghdad can witness them. Children sleep on sidewalks. Buildings that once housed many of the city's four million residents remain burned-out ruins.  Rubble fills the broad boulevards, while the air turns gritty and brown as thousands of vehicles kick up the resulting dust. Sewage still pours into the Tigris River, and those who must depend on it for drinking or cooking continue to get sick.

These conditions are the symptoms of an occupation policy with an economic purpose: the free-market transformation of Iraq. While most Iraqis view this as a basic violation of human rights, the United States does not even recognize that human rights include these economic and social conditions.

Occupation and Privatization
Iraqis have lost control of their own economy and country. This is far more than a symbolic loss. Yet symbols are an important element in understanding this reality, and nothing could have been more symbolic than how the occupation authorities treated the legacy of Iraq's nationalist, progressive and anti-colonial past.

Since 1958, July 14 has been Iraq's National Day.  Last year, under the occupation, it was declared a "Saddam-era holiday" and banned. Occupation authorities stated that the people of Iraq should instead celebrate the day of the fall of the Hussein regime, which is also the day the occupation began. While most Iraqis were glad to see Saddam go, many view the banning of National Day as not just an insult but a sign of the occupier's true intentions.

For progressive Iraqis, June 14 recalls their anti-colonial history. Nineteen fifty-eight was the year nationalists and radicals threw out the monarchy imposed by the British after World War One. Over the next five years of relative freedom and democracy, Iraqis began building a nationalized, planned economy, based on its oil wealth. Hundreds of factories were built, making it the most industrialized country in the Middle East. The Iraqi government organized a national health care system and treated education as a right. Women were represented in professions in percentages larger than in any other Middle Eastern country. Even after that government was overthrown in 1963 (by a coup in which the Central Intelligence Agency played a role), those popular reforms were continued under the Baathist regimes that followed.

A lynchpin in that reform plan was a new deepwater port, Umm Qasr, constructed on the Persian Gulf. From the piers of Umm Qasr, Iraq began to ship the goods from factories to buyers throughout the region. The port became a symbol of progress and independence.

Today Umm Qasr is war booty. It was the first Iraqi enterprise to be turned over, not just to a private owner but to a foreign one. Even before U.S. troops reached Baghdad, the Bush administration gave a $4.8 million contract for operating the port to Stevedoring Services of America (now known as SSA Marine), a politically connected firm handling cargo around the world.  Privatizing Umm Qasr was a step in the transformation of the Iraqi economy, from one based on nationalization and production for an internal domestic market to one based on ownership by transnational corporations. To Iraqis, instead of a symbol of national pride, Umm Qasr now represents a new era of foreign domination.

Following the revolution of 1958, a thousand long-shore workers labored on Umm Qasr's docks. Even in the heady days of Arab nationalism, however, they still had no guarantees for their rights and jobs.  At first, subcontracting companies were allowed to hire dockers out of a crowd in a daily shapeup. But workers rebelled. After winning recognition for their union, they demanded and won a hiring system under their control, and a daily guaranteed wage.

Today, those achievements seem like a distant dream. Umm Qasr is an object lesson in the privatization of Iraq.  Its fate will have a profound effect on the degree to which any future Iraqi government will be able to control the country’s economy.  It is a bellwether for the destiny of hundreds of thousands of other workers in formerly state-owned enterprises throughout Iraq’s economy.

The free trade ideology of the Bush administration sees the occupation of Iraq as a beachhead into the Middle East and south Asia.  Its first objective is the transformation of the state-dominated economy of what was once one of the region’s wealthiest countries. A free-market Iraq will then set new ground rules for the rest of the region.

On September 19, 2003, the Coalition Provisional Authority (CPA) published Order No. 39, which permits 100 percent foreign ownership of businesses (except for the oil industry) and repatriation of profits. Iraqi workers look at the prospect of such privatization with dread. "A worker starting here today has a job for life, under the old system," says Dathar Al-Kashab, manager of Baghdad's Al Daura oil refinery, "and there's no law which permits me to lay him off. But if I put on the hat of privatization, I'll have to fire 1,500 [of the refinery's 3,000] workers.  In America when a company lays people off, there's unemployment insurance, and they won't die from hunger. If I dismiss employees now, I'm killing them and their families."

Loss of Jobs, Worker Rights
Unemployment in Iraq hovers around 70 percent, according to the country's new unions. There is no unemployment benefit or welfare system. There is a Union of the Unemployed, which has held marches and demonstrations demanding jobs and benefits. Its leader, Qasim Hadi, has been repeatedly arrested by the occupation troops. Meanwhile, the CPA set a new salary schedule for Iraqi workers. Order No. 30 on Reform of Salaries and Employment Conditions of State Employees lowered the bottom wage rate from $60 a month to $40, and eliminated all previous housing, food, family, risk and location subsidies.

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The U.S. occupation authority also maintained a 1987 law declaring that workers in state-owned enterprises (which included most Iraqi workers) had no right to organize unions or bargain. This is another gift to prospective new private owners of Iraqi enterprises. If workers there have no legal union, no right to bargain, and no contracts, then privatization and the huge job losses coming with it will face much less organized resistance.

On June 5, 2003, CPA head Paul Bremer put another weapon into the anti-union arsenal—Public Notice Number One, which prohibits "pronouncements and material that incite civil disorder, rioting or damage to property." The phrase can easily be interpreted to mean strikes or other organized labor protests. Anyone who violates the decree "will be subject to immediate detention by Coalition security forces and held as a security internee under the Fourth Geneva Convention of 1949"—in other words, as a prisoner of war.

On December 6, U.S. occupation forces arrested eight members of the executive committee of the Iraqi Federation of Trade Unions (IFTU), and took them into detention. Although they were released the following day, the organization was expelled from the building where they had their offices.

Jassim Mashkoul, director for internal communications for the IFTU, says that, "at the beginning, we thought our situation might be better after we got rid of Saddam Hussein. But it hasn't been." Many factory workers are less diplomatic. One worker at the state leather goods factory in Baghdad explained that, "we must change this law that says we don't have to right to a union. If the law doesn't change, we'll change it anyway, like it or not. We are the people."
Human Rights Violations
Many of these CPA decrees violate international human rights standards.  Conventions 87 and 98 of the International Labor Organization, guaranteeing freedom of association, makes the continued enforcement of the 1987 ban on unions illegal.  Convention 135, preventing retaliation against workers for union activity, makes the arrests of union leaders, and their expulsion from their offices, illegal as well.  The CPA refuses to comment on these violations. Yet in an especially Orwellian moment, George Bush declared in his January 2004 State of the Union speech that U.S. intervention in Iraq would promote the formation of “free trade unions” in the Middle East.

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Denying union rights are not the only way in which the economic rights of Iraqi people have come into question.  Protecting free universal health care and education, even if they were guaranteed only on paper for the last 20 years, is a critical human rights question to many workers. By pulling apart this system, and installing a free market system in its place, the occupation is demonstrating clearly that these collective rights, held by Iraqis as a people, are not human rights as it defines them.

But beyond the question of social benefits looms the even larger one about the nature of the Iraqi economy itself—who controls it and who will benefit from it.  When the port of Umm Qasr was turned over to Stevedoring Services of America, it was not viewed as a human rights question by many in the United States. Contracting out public services for the enrichment of private businesses, while bitterly opposed by U.S. public workers and those dependent on them, has only recently been defined by U.S. labor and anti-poverty activists in human rights terms.

In Iraq, where Umm Qasr was the nation's pride and a source of its wealth for decades, its conversion into a business for the benefit of a Seattle firm and its stockholders was a fundamental human rights violation.  By extension, so was the occupation itself, which has enforced privatization at gunpoint.

The United States does not recognize that human rights include economic and social rights, in part, because they are collective rights of groups, social classes and even nations. U.S. accusations against the regime of Saddam Hussein focus on his violation of the human rights of individuals—the assassination of the regime’s enemies, and the prohibition on political activity by individuals who dissented from its policies.  Most popular organizations in Iraq, whether on the Left or the Right, religious or secular, make the same accusations.  But they don’t confine the discussion of human rights within those limits.  For them, the occupation and the social conditions it imposes are human rights abuses as well.

For the Bush administration, limiting the discussion of human rights to the rights of individuals allows it to enforce in Iraq an economic model of its choosing, without acknowledging the consequences as potential violations of human rights. While U.S. contractors get rich from the billions of taxpayer dollars appropriated supposedly for Iraq’s reconstruction, the country’s national wealth—factories, refineries, mines, docks and other industrial facilities—has been readied for sale by the occupation bureaucracy, which has treated democracy and the unrestrained free market as one in the same. 

David Bacon is a writer and photographer specializing in labor and globalization issues. His book, The Children of NAFTA, was recently published by the University of California Press. He’s also completed a photodocumentary project on migration for the Rockefeller Foundation.