Becca Fisher | ukwatch.net

Naomi Klein's The Shock Doctrine

Ellie Keen — Thu, 01 May 2008 21:42:31 +0000

Naomi Klein is at her best in explaining the relentless onslaught of neoliberal policies all over the world, and their genesis in academic circles in the USA, particularly surrounding the economist Milton Friedman. Her basic thesis is that the doctrine of neoliberalism has come to dominate the world by using periods of massive public disorientation following collective shock – wars, terrorist attacks, natural disasters – to push through unpopular neoliberal reforms. However, this thesis is not without its flaws.

Klein’s strongest insight is the analogy between psychological damage through torture, and physical damage through neoliberalism. She quotes CIA manuals on torture practices and draws illuminative parallels with neoliberalism: ‘Like the terrrorized prisoner who gives up the names of comrades and renounces his faith, shocked societies often give up things they would otherwise fiercely protect.’ This is a novel and instructive analogy – and goes some way to highlighting the close connections between psychological and physical damage that are neglected by so many other commentators. However, this analogy could be usefully applied much further. For Klein the ‘disaster capitalists’ lie in wait, ready to jump onto ‘disasters’ when they emerge. While this is no doubt the case for ‘natural’ disasters, most disasters are not natural, but are an intrinsic parts of the economic, political and social system we live in, and are increasingly frequent as neoliberalism extends its reach across the world. I would argue for a greater degree of culpability of neoliberalism and its advocates for creating the shocks in the first place – a culpability akin to that of the torturer. Yet Klein shies away taking her own analogy to its logical conclusion. For torture is not merely about the creation of sudden terror, but the normalisation and generalisation of states of fear amongst all who would resist. Similarly neo-liberal ‘shocks’ are merely particular moments in a much longer-term and more generalised attempt to control populations, by normalising fear and insecurity so much that they become part of our everyday experience. This seems to betray an overly narrow framework behind Klein’s analysis; she does not seem to take into account the wider dimensions of how power as a whole operates within a political, social and economic system, wider than just neoliberalism or corporations. This makes the book, despite its 466 pages, feel disappointingly partial, and limited in its analytical and historical scope.

For Klein, neoliberalism is basically the rule of the market and corporations over the state, and therefore over the people. In this scenario, corporations and the state are in direct competition with each other, which leads her to neglect the role of states and state power in facilitating elite power using the market, and more recently, using neoliberalism. This makes her explanation of neoliberalism’s dominance seem incomplete; arguing, as she does, that it is based on the power of opportunistic shock, rather than other, more historically embedded mechanisms. Not everyone has been ‘shocked’ into submission to neoliberalism. There have also been a host of other, often more hidden and insidious attempts to make people give up what it is in their interests to hold onto. These include ideological apparatuses such as education, control of the media, knowledge and information, think-tanks, the co-option of civil society, and repressive apparatuses such the police, the courts, governments, prisons etc. The power of corporations is enabled by a host of power mechanisms, stemming from a relationship of mutual benefit between elites, but this isn’t evident in Klein’s analysis.

Her oversight ensures that she does not analyse the wider context of the shock doctrine she dissects. For Klein, the use of shock is a sign of strength of the neoliberal project. However, it can also be argued to be a sign of weakness. Liberalism is no longer enough to keep populations in check and keep economic growth rising, so a more extreme form has emerged, one which it is increasingly difficult to secure consent for.

Iraq is a case in point: a country which had to be deliberately ‘shocked and awed’ into submission, making the companies and states behind it extremely unpopular, and unleashing a powerful Iraqi resistance, which puts the entire mission in jeopardy. Klein sees this as a shock operation, deliberately manufactured by neoliberal (and neo-conservative) architects, but she does not see this as a contradiction of her thesis, more a ‘notable exception’. However, it seems more plausible to see the destruction and ‘reconstruction’ of Iraq as proof that neoliberalism is being pushed to its limit – forced to reveal itself as a force that creates the disasters required to shock subjects into releasing to corporations their resources, their wealth and their labour.

Capitalism needs to constantly expand: exploiting and creating ‘disasters’ with neoliberal shock treatment is the latest weapon to do this. But it is a weapon which weakens the enterprise by exposing its in-built violence, and risks the effectiveness of the other ‘softer’ weapons. Just as torture is an extreme form of repression, so neoliberal shock treatment is an extreme form of liberal capitalism. But Klein fails to locate ‘disaster capitalism’ more broadly in the historical continuities and systemic features of contemporary capitalism. In doing so, she downplays both the everyday violence and the weaknesses of the current world order.

Corporate Globalisation:as easy as ABCC

Ellie Keen — Sat, 26 Apr 2008 22:30:48 +0000

On the surface, the Arab-British Chamber of Commerce is a company that facilitates relationships between businesses in Britain and Arab countries. It defines its role as offering:

‘‘a wide range of services to both Arab and British companies already involved in or planning to become a part of a long-standing bilateral trading relationship. These services include certification and legalisation of documents, business information and research, seminars and workshops, translation, language and cultural training, library facilities and a range of business publications’‘. [1]

‘Friendship through trade’ is the company’s motto, but its role is far more sinister. As an organisation simultaneously representing government and business elites from the UK and Arab countries, it wields substantial power in creating the conditions, in both the UK and the Arab world, in which the needs of those government and business elites are met. It does this by trying to enhance connections across business, government, the media, academic and policy networks, publishing and civil society. It furthers British businesses interests in established and emerging markets – easing the difficulties of breaking into a foreign market, and greasing the wheels of corporate globalisation. Regarding Iraq, it is a crucial player in the attempts to embed corporations in the fabric of Iraqi society.

Unsurprisingly, the ABCC have been eager to promote Iraq as a place to do business. However they have done so in the language of philanthropy: ‘We hope that our services can assist in the rebuilding of Iraq, and the strengthening of British Iraqi relations for the mutual benefit of both’.[2] As part of the package for ABCC members, it produces a fortnightly ‘Iraq Newsletter’ (the only country-specific section of its fortnightly bulletin of business information about investment opportunities), country profiles, and notice of tenders, conferences and trade fairs. It is also a major sponsor of the Iraq Development Program, which hosts a series of summits (held usually in London or Amman, Jordan) that provide ‘the opportunity for Iraqi companies and business people to meet and form relationships with senior figures from the international business community.’[3]

The ABBC also promotes similar events, such as ‘Invest Basra’, due to take place in Kuwait in March 2008. This is organised by the Basra Development Commission, described in the event flyer as the new ‘independent business champion’.[4] Set up by the Department for International Development (DfID), the Basra Development Commission is Gordon Brown’s most recent contribution to the neo-liberal development of Iraq and has been created with the explicit purpose of encouraging private sector growth in the region.[5]

The ABCC regularly organises visits from key Iraqi ministries looking to attract UK investors to Iraq. In January 2007 they hosted a visit from five Ministers and deputy Ministers from the Iraqi Ministry for Industry and Minerals. At this meeting, Minister Hariri outlined the purpose of his visit . It was ‘to plug the experience and technology gap before moving on to privatization’. Elaborating further, he asserted that ‘as the economy moves towards operating under free market conditions with the prospects of privatisation the aim…strategic partnerships with international firms in possession of much needed expertise would prove invaluable’.[6] He wanted to use this as an opportunity ‘to meet with appropriate UK contacts as potential investors and partners’ insisting that Iraq’s ‘reconstruction offered one of the greatest investment opportunities in the world today’.[7] The ABCC also arranged for the delegation to meet other leading UK companies and business associations, such as Corus, Rolls-Royce, British Expertise, the Confederation of British Industry (CBI), International Financial Services London (IFSL), CEMEX, as well as the UK Department for Trade and Investment (UKTI), plus the Minister for the Middle East, Dr Kim Howells.[8]

The ABCC is an embodiment of the current form of corporate ‘democracy’ existing in the UK, and is active in encouraging the development of a similar model in Iraq. All the directors are powerful figures inside government, international business and civil society, from Britain and from Arab countries. For example, several ABCC directors are, or have been, prominent diplomats with the UK FCO (Foreign and Commonwealth Office) to Middle Eastern countries, including their current chairman, Sir Roger Tomkys. Other ABCC directors include:

Christopher Wilton, a current advisor to both the Foreign and Commonwealth Office, as well as the Royal Bank of Scotland, and Selex Sensors and Airborne Systems Limited (who make radar equipment for ‘defence’ and ‘security’ systems).[9] Until 2001 he was the Managing Director for the Middle East for BAE Systems.

Khaled El-Seif manages one of the largest business groups in Saudi Arabia, and has also been a Member of the Advisory Committee from the private sector (formed by the Ministry of Commerce) supporting the Saudi Arabian-World Trade Organization negotiating team.[10]

Baroness Symons, an important architect of the New Labour project, is a current ABCC director.[11] She has served as Minister for Defence Procurement, Minster of State for the Middle East in the FCO and Minister of State for Trade in the Department of Trade and Industry, holding the last two positions simultaneously. It cannot be assumed that her influence and contacts were lost when she moved to the House of Lords. Indeed, she maintains her business connections as a member of the board of British Expertise, ‘the leading private sector organisation for the promotion of professional services from the UK’.[12]

ABCC directors also provide information and experience used by the UK government. For instance, Martin Patterson was employed as a translator for the British Army in Basra in 2003. He also displays good business connections, working as regional manager for De La Rue, who designed the new currency for Iraq. He also has company business in Iraq, Turkey, Afghanistan and the Balkans.[13]

Sandy Shaw, another director, is head of the Middle East Team at Coutts and Co, (the private banking arm of RBS), and apparently ‘pioneered the introduction of the private banking concept in the Middle East in the late 1980s’ and her career has provided her with a ‘personal client list [which] reads like a ‘Who’s Who’ of the Arab world.’[14]

The ABCC also provides members with access to powerful elite groups. For instance, Baroness Symons, is a member of the British-American Project, a networking organisation for corporate, political and intellectual elites, whose mission is to ensure that the left and liberal intelligentsia are not hostile to US foreign policy interests.[15] It can be seen that working behind the scenes the ABCC functions as a crucial meeting point for elites to get together, make deals, discuss business, and influence government policy and business practice.

But the ABCC also wish to have a public impact. They state that they have ‘Promoting a better mutual understanding be it in the political or cultural sphere, [...] at the heart of [their] media mission’ and claim their directors can provide media interviews that give ‘unique insight from both the UK and Arab States.’[16] Some of the directors are themselves journalists or even media barons; Sir Alan Munro is the director of the Middle East International magazine.[16] Mr Al Tayer, third vice chairman of the ABCC is also Partner and Managing Director of Al-Nisr Publishing which publishes an English daily newspaper, ‘Gulf News’ and a weekly magazine, and a partner in Motivate Publishing which publishes three specialist magazines, and various periodicals and books. He is also chairman of the Dubai Chamber of Commerce and Industry.[17]

The ABCC also try to influence public opinion via the production of information and knowledge on Arab countries, and to ensure that education on this subject is corporate friendly. Dr Humayon Dar, an ABCC director, is a banker with Deutsche Bank subsidiary and an expert in Islamic Finance. He helped establish a postgraduate degree course in Islamic economics, banking and finance.[18] Sir Roger Tomkys, as well as a diplomat and current ABCC chairman, served as the President of the British Middle East Society, (the professional association of academics working in this field) Chairman of the Centre for International Studies, and at the Centre for Middle East and Islamic Studies.[19] He is now on the international advisory group of the Centre for the Advanced Study of the Arab World (a newly-formed research consortium based at the universities of Edinburgh, Manchester and Durham) and sits on the management committee of the Council for the Advancement of Arab British Understanding (CAABU).[20]

Dr. Ghantous, current Secretary General of the General Union of Chambers of Commerce, Industry and Agriculture for Arab Countries, was also a lecturer in Economics at the American University of Beirut, and still writes articles and conference papers.[21]

Several directors also seem to have close connections with NGOs, in particular the British Red Cross Society. For instance, Sir Alan Munro is the Vice-chairman of the British Red Cross Society, and Baroness Symons is a member.[22] In this way, not only can the ABCC play a role in the decisions at the British Red Cross Society, but the two can lend moral weight to one another’s activities. In addition, Humayon Dar is on the board of directors of Charity Bank Limited, whose stated purpose is to ‘change perceptions of how personal and corporate wealth can provide finance for the benefit of society’.[23] It is also a platform to facilitate business and NGO connections, accumulating moral capital that benefits both ‘sides’.

It is clear that the main mission of the ABCC is to maintain and extend corporate power in Britain, the Middle East and North Africa. That the Arab country with most business connections to the ABCC and the most trade between ABCC companies is Saudi Arabia, puts into question the ABCC commitment to democracy.[24] The destruction and ‘reconstruction’ of Iraq is in essence the attempt to build another US/UK friendly satellite in the Middle East like Saudi Arabia. Interestingly, the ABCC seem aware of the inherent risks, and by extension their own culpability, in the establishment of such unequal and exploitative relationships between countries, and between people. The former head of external relations of the ABCC once commented that if the amount of Saudi money invested in London was known ‘there would be riots on the streets of Riyadh and Jeddah’.[25] But it is not so easy to hide the role of business elites in Iraq. A war opposed by the majority in the UK and an occupation actively resisted in Iraq – it seems unlikely that Iraq will ever be ‘reconstructed’ into the new Saudi Arabia.

References

Big Contracts for Big Oil

Alex Doherty — Thu, 26 Apr 2007 15:52:29 +0000

After a 35 year wait, American and British oil corporations are on the verge of securing control of Iraq’s vast oil reserves. Becca Fisher reveals how the unholy alliance of Big Oil, government and the IMF is getting closer to its goal of reconstructing the Iraqi state to gain secure oil supplies.

COVERT PRIVATISATION

The new law would allow foreign oil companies to sign long term contracts, giving them exclusive rights over Iraq’s huge oil fields. Its very terms reflect the public opposition to privatisation in Iraq, as the proposed contracts carefully ensure that the state still owns the oil whilst the company controls production, secures huge rates of profit, and is immune from Iraqi state regulation. As former Iraqi oil minister, Ibrahim Bahr al-Uloum, puts it, ‘The Iraqi oil sector needs privatisation but it’s a cultural issue’(1). The solution has been to disguise the plunder in this covert form of privatisation. As Professor Thomas Wälder, oil law expert at the University of Dundee, explains:

‘The government can be seen to be running the show and the company can run it behind the camouflage of a legal title symbolising the assertion of national sovereignty.’(2)

Iraqi sovereignty in the oil industry can thus be removed under the guise of state ownership. This smokescreen operates on another level: the law itself is an instance of a wider removal of Iraqi sovereignty, under the guise of democracy.

PHANTOM DEMOCRACY

Iraqi parliamentarians saw the law for the first time in Feburary. As with the rest of the Iraqi public, they have been excluded from the law’s inception and its drafting. However, both the US and UK governments, the International Monetary Fund (IMF: the international organisation entrusted with overseeing the global financial system), and major oil companies have been heavily involved from the beginning. For four years they have been collectively pushing through a law which was drafted in private and designed to serve their interests. Their collective efforts illustrate the closely interdependent relationship between particular governments, corporations and international financial institutions, when their power and interests converge: power to push their interests through the checks and balances democracy is assumed to put in place.

Before the invasion in 2002, the US State Department initiated the ‘Future of Iraq Project’. Consisting of 17 working groups which met in Washington and London, it attempted to design the post-war Iraq. The groups featured Iraqi exiles and international consultants picked by the US State Department. Capturing Iraq’s oil was high on the agenda and the ‘Oil and Energy’ working group, including the future Iraqi Oil Minister Ibrahim Bahr al-Uloum, concluded that Iraq ‘should be opened to international oil companies as quickly as possible after the war’(3). The Coalition Provisional Authority, (the body which controlled Iraq during the first fourteen months after the invasion), appointed former senior executives of oil companies as advisers – from Shell, ExxonMobil, BP and ConocoPhillips. The cost of British advisers, Terry Adams and Bob Morgan of BP, was met by the UK government; they answered to the British Embassy in Iraq. Their sage advice included influencing Iraq’s legal structure. At the time, the US State Department declared,

‘We are supporting Iraqi efforts to reach agreement on the new oil law… we are providing detailed technical support for the process as well as providing political support where necessary’(4)

Shrouded in secrecy, the US and UK governments, big oil companies and the IMF pushed for the new oil law. BP, Shell, ExxonMobil, Chevron, Total and Italian oil and gas company ENI have been working through a major lobbying organisation, the International Tax and Investment Centre (ITIC). The document they produced amounts to a hymn of praise for the form of contracts, known as Production Sharing Agreements (PSAs), which are now written into the law(6).

The British government have also been closely involved with the ITIC. UK Foreign Office and Treasury officials have offered advice to the ITIC in how they can influence the Iraqi government. The British Ambassador to Iraq even went so far as to act as a postal service, delivering the ITIC’s lobbying document to the Iraqi finance minister. Meanwhile British diplomats in Baghdad, and civil servants in Whitehall, have helped secure direct contact with Iraqi decision-makers for BP and Shell. In answer to a parliamentary question, Foreign Office minister responsible for the Middle East, Kim Howells, admitted that:

‘Our work on Iraq’s economic and energy sector has included contacts with oil companies…These exchanges have included discussion of Iraq’s evolving hydrocarbons legislation where British international oil companies have valuable perspectives to offer’(7).

The IMF too have done their bit for the PSA cause; it has made its involvement in the writing of the law conditional to its debt relief programme. The IMF even attempted to impose deadlines for its passing (though these have been missed). It is pleased with the results as its recent press release shows:

‘The government’s approval of a new oil and gas law augurs well for the future of the oil sector.’

Further pressure has come from the US government. It has been reported that prime minister Al-Maliki fears that if the parliament does not pass the law by the end of June, he might lose American support, which would effectively oust him from
power(8).

VEIL OF LEGITIMACY

The major players have attempted to give the corporate takeover of Iraq’s oil a veil of legitimacy: a semblance of democracy so that Iraq can be seen as a sovereign state, whilst remaining pliable to the various needs of the occupying powers and multinational corporations. Any real possibility
of democracy is negligible, however. The occupying powers are pushing through an oil law which will deny Iraq ownership of its most valuable resource. Their understanding of ‘sovereignty’ resembles Colin Powell’s definition as something which ‘they are going to allow us to exercise on their behalf and with their permission.’(9)

This permission to exercise sovereignty on their behalf has not yet been granted, however. Across Iraq, the occupying forces are stretched to defend themselves against attacks, many targetting the structures and institutions that make up the state, society and political system. PSAs have earned such an unpopular reputation, in Iraq and internationally, that the term has been dropped from the law. Instead, the proposed contracts are called ‘Exploration and Risk’ contracts, believed to be the same thing.

Iraqi oil workers have fiercely resisted the handover of Iraq’s oil to multinational corporations. Ultimately they may be able to stop production and export, and sabotage the oil supplies. At a meeting last December the leaders of the five main union federations in Iraq denounced the PSAs, condemning them as an attempt to ‘rob Iraq’s national wealth by virtue of unfair, long term oil contracts that undermine the sovereignty of the State and the dignity of the Iraqi people’ adding that ‘the privatisation of oil is a red line that may not be crossed.’(10) Oil workers have stopped production before in order to secure higher wages and better conditions, and they have reportedly threatened to repeat this over the oil law. The test will be, if and when the law is passed, whether the response is strong enough to resist and survive the repression that will no doubt follow.

It has been a longer process to secure Iraq’s oil than many had anticipated. This is because it has required the reconstruction of some basic legal and economic structures, as well as the re-definition of some basic terms. Big Oil has not enjoyed the wait; in July 2003, Sir Philip Watts, chair of Shell, bemoaned the need to wait before they could proceed in Iraq stating:

‘There has to be proper security, legitimate authority and a legitimate process… by which we will be able to negotiate agreements that would be longstanding for decades’(11).

But he could be comforted in the knowledge that when the legitimate authority is there on behalf of the people of Iraq, ‘we will know and recognise it’(12). Perhaps because he knew the occupying powers would try to construct it.

References:

[1] Greg Muttitt, Crude Designs, p 17, www.carbonweb.org/showitem.asp?article=57&parent=4&link=Y&gp=3

[2] P11, Crude Designs

[3] P16, Crude Designs

[4]‘Ben Lando, ‘Analysis: Americans say Iraq War over oil’, UPI, 25/01/07 http://www.upi.com/ZogbyPoll/view.php?
StoryID=20070125-025759-3252r

[5] www.iticnet.org/publications/Iraq-book.pdf

[6]Platform press release,
www.carbonweb.org/showitem.asp?article=257&parent=39

[7]IMF Press Release www.imf.org/external/np/sec/pr/2007/pr0748.htm

[8] Associated Press aritcle http://tinyurl.com/2ypwog Al- Maliki tells aides U.S. benchmark deadline is June 30 or his ouster possible’

[10] Platform press release www.carbonweb.org/showitem.asp?article=223&parent=39

[11] Carola Hoyas, ‘Oil groups snub US on Iraq deals’, FT, 24/07/03,
http://search.ft.com/ftArticle?
queryText=oil%2Bgroups%2Bsnub%2BUS%2Bon%2BDeals&y=0&aje=true&x=0&id=030724000471

[12] ‘..we will know it and recongise it’ as before.