Tuesday, September 20, 2005

Look who's on the other side of the pillow, Hitch

Christopher Hitchens outlines the "it was broken when we found it" theory of post-war chaos in Iraq:

Unprevented looting in the early days, water and power all on a knife edge, religious fanaticism, corruption … you know how it goes. Even as I grit my teeth and whisper, "Tell me something I don't know, sweetie," I try politely to point out that this is a non sequitur. The messed-up-ness of the country is part of the original justification for taking action,

But that's not quite what the post-war planners in the White House said at the time:

Two months before the war began, USAID began drafting a work order, to be handed out to a private company, to oversee Iraq’s "transition to a sustainable market-driven economic system." The document states that the winning company (which turned out to be the KPMG offshoot Bearing Point) will take "appropriate advantage of the unique opportunity for rapid progress in this area presented by the current configuration of political circumstances." ... L. Paul Bremer [US pro-consul in Iraq] .. unleashed his shock therapy ... he fired 500,000 state workers, most of them soldiers, but also doctors, nurses, teachers, publishers, and printers. Next, he flung open the country’s borders to absolutely unrestricted imports: no tariffs, no duties, no inspections, no taxes. Iraq, Bremer declared two weeks after he arrived, was "open for business." ... There was Order 37, which lowered Iraq’s corporate tax rate from roughly 40 percent to a flat 15 percent. There was Order 39, which allowed foreign companies to own 100 percent of Iraqi assets outside of the natural-resource sector. Even better, investors could take 100 percent of the profits they made in Iraq out of the country; they would not be required to reinvest and they would not be taxed. Under Order 39, they could sign leases and contracts that would last for forty years.

So, a place that was completely messed up and hopelessly corrupt and divided, according to Hitch, was still fit to be a laboratory for unbridled corporate economics. Is that a development recipe he'd recommend for every poor country in the world?

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