Bill Van Auken | ukwatch.net

Big Oil Cashes in on Iraq Slaughter

Tim Holmes — Sun, 22 Jun 2008 21:40:11 +0000

Four major US, British and French oil companies are getting their hands on the petroleum reserves of Iraq for the first time in 36 years, based on no-bid contracts, the New York Times reported Thursday.

These deals reached with the US-backed regime in Baghdad have placed the five-year-old US war of aggression in the clearest possible perspective.

For the thousands of American families who have seen their sons and daughters killed in the Iraq war or return maimed or psychologically damaged, the knowledge that their sacrifices have opened up potentially huge new profit streams for Exxon-Mobil, Shell, British Petroleum and Total will provide cold comfort.

For the over one million Iraqis killed and the millions more turned into refugees or made homeless in their own land, an overriding justification for their suffering has now been laid bare. It was to further enrich the already obscenely wealthy corporate executives and major shareholders of Big Oil.

As the New York Times reported Thursday: “The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations.”

The Times acknowledged that “The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India.”

No-bid deals in the oil sector are not only “unusual,” under conditions in which oil demand is at an all-time high crude is selling for nearly $140 a barrel and energy-producing countries around the world—Russia, Kazakhstan, Venezuela, Bolivia and others—are exerting a tighter national grip over their reserves. Such contracts cannot be explained outside of their being negotiated at the point of a gun.

The deals have been structured as “service agreements” in order to circumvent restrictions that would have ensued under Iraq’s draft oil law, which the Iraqi parliament has proven unable to pass because of both nationalist opposition to foreign exploitation of the country’s reserves and disputes between the federal government and Iraqi regional entities over control of the oil fields.

In reality, however, the two-year deals provide for payment to foreign companies in oil, opening up the possibility of substantial profits. Moreover, as one oil expert commented, they provide the “foothold” for the four major Western companies, paving the way to far more intensive exploitation.

A total of 46 companies, including Lukoil of Russia, China National, India’s major oil company and others had memorandums of understanding with the Iraqi Oil Ministry, according to the Times.

Yet none of them were allowed to bid for contracts. Instead, the deals are being handed over without any competition to Exxon-Mobil, Shell, Total and British Petroleum.

The Times comments, “While the current contracts are unrelated to the companies’ previous work in Iraq, in a twist of corporate history for some of the world’s largest companies, all four oil majors that had lost their concessions in Iraq are now back.”

In a similar vein, US Secretary of State Condoleezza Rice told Fox News: “The United States government has stayed out of the matter of awarding the Iraqi oil contracts. It’s a private sector matter.” However Rice, a former director of Chevron, which is participating in one of the contracts in a consortium with Total, acknowledged that with the new deals “it’s starting to get interesting in Iraq.”

This is all nonsense and lies. The new contracts have everything to do with the role played by these companies decades ago and their determination to wrest back the control they exercised before Iraq nationalized its oil industry and ejected the US and British oil giants in 1972, a move that ushered in a wave of nationalizations throughout the oil-producing countries.

Before then, the Iraq Petroleum Company was dominated by the US and British companies, which controlled three-quarters of the country’s oil production.

Moreover, the US government has worked over decades to re-impose American domination over Iraq, which has the second largest proven oil reserves—115 billion barrels—and the largest unexplored reserves of any country in the world.

The disingenuous explanation given by the US-dominated Iraqi regime—and echoed by the Times—for the supposedly serendipitous return to dominance of the very companies that controlled the country’s oil production 36 years ago is that “they had been advising the ministry without charge.”

Yet, as the Times article notes, Russia’s Lukoil, which had been training Iraqi oil engineers free of charge, is being thrown out of an oilfield where it held a previously signed contract, in order to make way for Chevron and Total.

The reality is that these contracts are the direct product of armed aggression. In the wake of the invasion, US troops seized control of the oilfields and secured the Oil Ministry in Baghdad, even as it left every other governmental and cultural institution to the mercy of the looters. It then selected Phillip Carroll, the former president of Shell Oil, to head up an “advisory board” to assume control over the ministry.

As the Times delicately notes: “It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq’s Oil Ministry.”

The drive by the US government and the oil monopolies to regain their control over Iraq’s oil wealth began well before the Bush administration launched its unprovoked war in March 2003 and constitutes a bipartisan policy that has been pursued by Democratic and Republican administrations alike.

In the wake of the dissolution of the Soviet Union in 1991, the conditions emerged for US imperialism to pursue this strategic aim with continuously escalating violence and aggression.

After Iraq’s infrastructure was shattered in the Persian Gulf War of 1991, the Clinton administration campaigned for punishing United Nations sanctions that choked off essential food and medical supplies and resulted in the loss of hundreds of thousands of additional lives.

The critical strategic aim of these sanctions was to block the resumption of oil production and prevent the realization of contracts signed between the government of Saddam Hussein and foreign rivals of the big US and British companies, particularly Russian and Chinese producers as well as France’s Total.

This was combined with stepped-up military attacks, as the Clinton administration hammered Iraq with cruise missiles in a series of strikes dubbed Operation Phoenix Scorpion, Operation Desert Thunder and Operation Desert Fox, all preludes to the ultimate invasion.

At the same time, Clinton signed into law the “Iraq Liberation Act of 1998,” leveling the charges of “weapons of mass destruction” that would be used to justify war less than three years later and declaring that US policy was “to support efforts to remove the regime headed by Saddam Hussein from power in Iraq.”

With the installation of the Bush administration, preparations for the armed takeover of Iraq began in earnest. Documents released under the Freedom of Information Act from a national energy task force chaired by Vice President Dick Cheney in early 2001 included a map of Iraq’s oilfields and a list of “foreign suitors for Iraqi oilfield contracts.”

The imposition of the contracts for the four big oil firms has confirmed what the Iraq war was about from its conception—well before the September 11, 2001 attacks. The false claims about “weapons of mass destruction” and the invention of ties between Baghdad and Al Qaeda were pretexts for a war aimed at re-establishing semi-colonial control over Iraq and its oil wealth, thereby furthering the US drive for global hegemony.

What is involved is a conspiracy by the government and powerful corporations to foist a war of aggression onto the American people.

Far from provoking outrage or the calls for investigations, however, news of the oil contracts has been met with a deafening silence from the mass media and the political establishment alike. The same television news outlets that trumpeted the Bush administration’s lies about WMD and terrorism passed over the oil deals without a mention.

There is ample evidence that furthering the interests of the oil conglomerates and American imperialism as a whole by continuing the war and occupation in Iraq remains a consensus policy supported by Democrats and Republicans alike.

On the same day that news of the oil contracts broke, the Democratic leadership of the House moved to approve another $165 billion Iraq war funding package, bringing the total amount legislated by Congress to continue a war that is opposed by the overwhelming majority of the American people to over $600 billion.

The 2008 presidential election contest has been presented by the media and the two presidential candidates—Democrat Barack Obama and Republican John McCain—as a choice between a US withdrawal from Iraq or continuing the war until victory.

Yet, the ongoing negotiations over a “Status of Force Agreement,” or SOFA, providing for the long-term presence of US occupation troops in the country has pointed to an underlying agreement on Washington’s future course.

Iraq’s Foreign Minister Hoshyar Zebari, in Washington for the talks on the SOFA, held discussions this week with both McCain and Obama on future US policy in the country.

The Washington Post quoted Zebari Wednesday as saying that Obama had assured him that a Democratic administration would “not take any irresponsible, reckless, sudden decisions or actions.” Obama explained, he said, that he “wants redeployment,” but that he “is not interested to pull all troops out. He wants a residual force” in Iraq to carry out anti-terrorist operations, protect US facilities and train Iraqi security forces.

According to the Post the Iraqi foreign minister concluded that “there was ‘not too much difference’ between Obama’s position and that of the presumptive Republican nominee…”

In other words, both candidates are determined to continue shedding blood—Iraqi and US alike—to advance the cause of securing Iraq’s oil reserves for Exxon-Mobil and the other energy corporations and to create a base of operations for new and even bloodier wars of aggression in the region, including against Iran.

Amid mounting food crisis, governments fear revolution of the hungry

tim — Tue, 15 Apr 2008 13:30:27 +0000

Last week’s meetings in Washington of the International Monetary Fund, the World Bank and the Group of Seven were convened in the shadow of the worst financial crisis since the Great Depression of the 1930s. While Wall Street’s turmoil and the deepening credit crunch dominated discussions, leaders of the global financial institutions were forced to take note of the growing global food emergency, warning of the threat of widespread hunger and already emerging political instability.

The seven major capitalist powers in the G-7—the US, Japan, Germany, Britain, France, Italy and Canada—made virtually no mention of the global food crisis, referring in only one brief reference to the risk of “high oil and commodity prices.” Instead, they focused on the stability of the financial markets, promising measures to shore up investor confidence.

The IMF and World Bank, however, felt compelled to acknowledge the emerging worldwide catastrophe, in part because while these agencies are instruments of the main imperialist powers, they must posture as responsive to the needs of all countries. It would be too revealing for them to focus exclusively on the fate of major finance houses, while ignoring the fact that hundreds of millions across the planet are being threatened with starvation.

More decisive, however, is the realization that this crisis confronting the most impoverished countries and poorest sections of the world’s population is threatening to unleash a revolution of the hungry that could topple governments across large parts of the world.

Even as the IMF and World Bank were meeting, the government of Haiti was forced out in a no-confidence vote passed in response to several days of demonstrations and protests against rising food prices and hunger that swept all the country’s major cities. Clashes between protesters and United Nations occupation troops left at least five people dead and scores wounded and saw crowds attempt to storm the presidential palace.

Food prices in Haiti had risen on average by 40 percent in less than a year, with the cost of staples such as rice doubling.

The same essential story has been repeated in country after country, from Africa to the Middle East, south Asia and Latin America.

In Bangladesh, on Saturday, some 20,000 textile workers took to the streets to denounce soaring food prices and demand higher wages. The price of rice in the country has doubled over the past year, threatening the workers, who earn a monthly salary of just $25, with hunger. Scores were injured in clashes with police, who used gunfire in an attempt to disperse the crowds.

In Egypt, protests by workers over food prices rocked the textile center of Mahalla al-Kobra, north of Cairo, for two days last week, with two people shot dead by security forces. Hundreds were arrested, and the government sent plainclothes police into the factories to force workers to work. Food prices in Egypt have risen by 40 percent in the past year.

Unions and shopkeepers staged a two-day general strike in the West African nation of Burkina Faso last week to protest high prices. The strikers demanded a “significant and effective” cut in the price of rice and other stables.

Several hundred demonstrators marched on parliament in Phnom Penh, Cambodia April 6 to protest food price hikes. The cost of a kilogram of rice has risen to $1 in a country where the average income is barely 50 cents a day. Police armed with cattle prods broke up the protest.

Earlier this month, in the Ivory Coast, thousands marched on the home of President Laurent Gbagbo, chanting “we are hungry” and “life is too expensive, you are going to kill us.” The country has seen food prices soar by between 30 percent and 60 percent from one week to the next. Police broke up the protest with tear gas and batons, injuring over a dozen people.

Similar demonstrations, strikes and clashes have taken place in Bolivia, Peru, Mexico, Indonesia, the Philippines, Pakistan, Uzbekistan, Thailand, Yemen, Ethiopia, and throughout most of sub-Saharan Africa.

With terrifying rapidity, hundreds of millions of people all over the planet have been confronted with the inability to obtain the basic necessities of life. The global capitalist market is dictating intolerable conditions for masses of people on every continent, provoking a worldwide eruption of class struggle.

It is the concern that this struggle will spin out of control that found expression in the statements of concern issued by the IMF and World Bank leaders together with finance ministers and central bank chiefs gathered in Washington.

“If food prices go on as they are today, then the consequences on the population in a large set of countries, including Africa, but not only Africa, will be terrible. Hundreds of thousands of people will be starving. Children will suffer from malnutrition, with consequences all of their lives,” Dominique Strauss-Kahn, the International Monetary Fund managing director, told an April 12 press conference in Washington.

He warned that governments “will see what they have done totally destroyed and their legitimacy facing the population destroyed also.” Strauss-Kahn added: “So it’s not only a humanitarian question. It is not only an economic question. It is also a democratic question. Those kind of questions sometimes end into war.”

“In just two months,” World Bank President Robert Zoellick said in an opening speech to the meeting of finance ministers, “rice prices have skyrocketed to near historical levels, rising by around 75 percent globally and more in some markets, with more likely to come.

“In Bangladesh, a 2-kilogram bag of rice,” he said, holding up such a bag, “now consumes about half of the daily income of a poor family.”

He added that wheat prices had increased by 120 percent, more than doubling the cost of a loaf of bread.

“If food prices go on as they are today, then the consequences on the population in a large set of countries … will be terrible,” said Zoellick.

The “international community will also need to take urgent and concerted action in order to avoid the larger political and security implications of this growing crisis,” United Nations Secretary-General Ban Ki-moon told international finance and trade officials at a UN meeting following the weekend talks in Washington.

The United Nations Special Rapporteur on the Right to Food Jean Ziegler offered among the bleakest prognoses for the continuing crisis. “We are heading for a very long period of rioting, conflicts (and) waves of uncontrollable regional instability marked by the despair of the most vulnerable populations,” he told the French daily Liberation Monday.

He pointed out that, even before the present crisis, hunger claimed the life of a child under the age of 10 every 5 seconds, and 854 million people in the world were seriously undernourished. What was now posed, Ziegler warned, is “an imminent massacre.”

While finance ministers from the US and Europe indicated agreement that the crisis was severe, there was no indication that the major capitalist powers have any plan to mount the kind of effort needed to stave off a humanitarian catastrophe.

The White House announced Monday that it is releasing $200 million in emergency food aid in response to a World Bank appeal for funding to make up for the shortfall in food assistance caused by soaring prices. The amount—roughly what the US spends in half a day on its war to conquer Iraq—is less than a drop in the bucket in the face of the looming global catastrophe.

In the end, the crisis is a product of the capitalist market itself. It is not a matter of too many mouths to feed or too little food to supply human needs. Food is available, but the market has driven prices to a level out of reach for a growing portion of humanity in the most oppressed countries, and at the same effectively slashing the living standards of workers in the more advanced capitalist world.

This process is driven by a number of factors, including climatic ones, such as the impact of a draught in Australia on wheat production and a flood in Bangladesh on rice. There is also the rise in demand, particularly from growing middle class layers in India and China.

But more fundamental is the effect of speculation in food as a commodity—like oil and precious metals. It has become a haven for financial investors fleeing from paper assets tainted by subprime mortgages and other toxic credit products. The influx of buyers drives prices and makes food unaffordable for the world’s poor.

“Fund money flowing into agriculture has boosted prices,” Standard Chartered Bank food commodities analyst Abah Ofon told the media. “It’s fashionable. This is the year of agricultural commodities.”

Speculation in food as a commodity has been sharply accelerated by the decline in the value of the dollar, soaring oil prices and the promotion of biofuel production in the US and elsewhere. This attempt to generate a new investment “bubble,” based on the fraud that somehow turning corn into ethanol represents a “green” alternative to fossil fuels, has driven up the price not only of corn, but other grains, while diverting a major share of food production into a more profitable venture.

Subsidized by the US government, American farmers have diverted fully 30 percent of corn production into the ethanol scheme, driving up the cost of other, more expensive, grains that are being bought as substitutes for animal feed.

“When a biofuel policy is launched in the United States, thanks to subsidies of $6 billion, of bio-fuels that drains 138 million tons of corn from the market, the foundation is laid for a crime against humanity to satisfy one’s own thirst for fuel,” the UN Special Rapporteur on the Right to Food Jean Ziegler told Liberation.

This assessment was repeated by India’s finance minister, Palaniappan Chidambaram, who declared, “When millions of people are going hungry, it’s a crime against humanity that food should be diverted to biofuels.”

US officials dismissed the charges, insisting that biofuel production was only one factor among many and indicating that there is no plan to change Washington’s policy.

Country after country has been left vulnerable to the global commodity price surge by “free market” policies implemented at the demands of Washington and the international financial agencies such as the IMF and World Bank over the past quarter century.

The closer integration of the economies of the oppressed countries into the world market has been accompanied by their increasing concentration on specialized export crops, while tariff barriers have been demolished, opening the way to subsidized agricultural staples from the more advanced countries capturing local markets.

Now, attempts by individual national governments to remedy the problem within their own borders—often taking the form of commodity producers erecting barriers on exports—have served to exacerbate the crisis internationally, driving food prices even higher, while triggering protests by farmers in countries stretching from India to Argentina. According to a recent World Bank survey, at least 58 countries have implemented at least some form of food-trade protectionism.

What is emerging in the crisis over food prices is a tumultuous manifestation of a breakdown of the global capitalist order. The catastrophe facing billions of people around the globe cannot be resolved within the confines of a system based on private profit and the nation state.

The revolutionary implications of this crisis are beginning to dawn on elements within the ruling establishment itself. In an article published Monday, the influential US magazine Time noted: “The idea of the starving masses driven by their desperation to take to the streets and overthrow the ancien regime has seemed impossibly quaint since capitalism triumphed so decisively in the Cold War… And yet, the headlines of the past month suggest that skyrocketing food prices are threatening the stability of a growing number of governments around the world.”