International Journal of Contemporary Iraqi Studies - Volume 1, Issue 2, 2007

University Distinguished Research Professor Johns Hopkins University (SAIS)

As occupying power, the United States embarked on a radical and comprehensive project to reconstruct Iraq's political and economic system along neo-liberal lines. In doing so, however, the United States was constrained by a fundamental predicament: its goal was not just to entrench a self-perpetuating neo-liberal economic system that endures after occupation, but to do so in a way that would seem to fulfil the United States' pre-invasion promise of delivering democracy to Iraq. The problem, however, was that, in the face of widespread opposition to the occupation and to the neo-liberal plan, democracy could put in place an Iraqi government opposed to the project. The article documents and analyses the ways by which the United States attempted to confront this dilemma during the early stages of the occupation. It shows how, as it tried to overcome its constraints, the United States shed off its rhetorical support for democracy by attempting, in practice, to effectively establish a free market economy by force. Such a choice, however, may have also compromised and ensured the continuing fragility of the project.

This article analyses the problems inherent in the long-term oil production contracts proposed by Iraq's draft oil law. The article examines means by which oil companies attempt to avoid risk: price risk, security risk and political risk. Meanwhile, the same companies insist on securing the corresponding upside: the chance of ever-higher profits. As these risks are externalized to the host state, respectively they impact on revenues, the human rights of the state's citizens and the state's sovereignty to manage its natural resources, or even to pass legislation. The article examines the use of such contracts in a number of countries, focusing especially on the Middle East, and on the contracts signed by former Soviet republics in the 1990s during their own period of rapid change. The article proposes some contractual mechanisms with precedents which might limit these problems. However, the current draft oil law is a permissive one, which empowers the executive branch of government to sign away as much as it chooses, with few restrictions to protect the public interest, nor any requirement for further parliamentary approval. The conclusion is that the prospects for contracts signed in the current circumstances in particular, the occupation, the security situation and political fragmentation do not look good.

The reconstruction process, at this critical juncture, is wrapped in uncertainties: political, economic, institutional and security, the confluence of which could result in a large number of joint outcomes. Some uncertainties, however, can be reduced to their most likely outcomes. Others, especially those emanating from the interaction between the security situation and the administrative structure of the country, are still very difficult to ascertain. Given the most likely outcomes of other uncertainties, the reconstruction process will depend largely on the joint outcomes (scenarios) of this interaction. This article identifies and analyses the national/regional economic consequences of three scenarios, noting that some eventualities are increasingly undermining the role of the central/federal government. In a federal system, however, and as regions become more responsible for their economic policies and financial resources (mainly transfers of oil revenues), federal economic management ought to promote, inter alia, regional capabilities, economic integration and reduction of the historical disparities between regional GDP generation and received incomes.

This paper considers the positions of the public and private sectors in key economic activities in Iraq during the quarter of a century running up to the 2003 invasion and occupation of the country. It questions the common assumptions upon which economic policies are being advocated, that of a public sector dominated economy in need of radical liberalising measures and privatisation. The paper outlines cumulative measures applied in a number of different sectors and economic activities over many years, subsequently followed by macro level institutional and policy changes that have opened wider avenues for the private sector activity. The paper also considers ambivalence of international sanctions in their different phases and in their consequences for private and public sector activity. It concludes that much of the current economic policy discourse is based on ignorance or is politically motivated. Generally speaking, economic performance had been undermined by political factors, inappropriate policies and structural weaknesses of the private sector, rather than by excessive state intervention and public sector predominance.

This paper attempts to assess the economic consequences for Iraq of its 2003 invasion. Using revised GDP data (available only back to 1997), it estimates the effects of oil price changes, the invasion, and the threat of invasion on GDP growth rates. Even in a short time series, the invasion is found to be significant at the 10 level, and is associated with a halving of real GDP in 2003. Almost alone among its neighbours and OPEC members, Iraqi real GDP correlates negatively with oil prices over 19972004, a symptom of the economic distortions faced by its economy. While Iraq has received considerable attention from international institutions following the 2003 invasion, its subsequent troubled economic performance should not surprise in light of the transition recessions of the post-Soviet countries.

Over the latter half of the twentieth century, Iraqi women enjoyed a substantial expansion in their opportunities and rights. Where the reforms of the latter half of the twentieth century freed women from the bondage of tribal and feudal forces, the American occupation of 2003 has jolted Iraqi women back into the bondage of reactionary forces. In addition to the general horrors that have come to dominate Iraqi life, Iraq's women have become the target of a campaign of sexual terrorism by the Anglo-American occupation regime in addition to the criminal and sectarian elements that were unleashed by the occupation. This article studies the shifting status of women in modern Iraq, and considers the various forms of oppression that held Iraqi women in thraldom (tribal, sectarian, neo-feudal). Finally, the article considers the place of women within the emerging international environment of corporate neo-feudalism.

Making the most of the fiasco: dividing Iraq and salvaging Kurdistan

The Future of Iraq: Dictatorship, Democracy, or Division? Liam Anderson and Gareth Stansfield, (2005) New York: Palgrave Macmillan, 288 pp. ISBN: 1-4039-7144-7 (updated paperback edition), $15.95

The End of Iraq: How American Incompetence Created a War without End, Peter W. Galbraith, (2006) New York: Simon & Schuster,288 pp. ISBN: 0743294238 (Hardcover) $26.00/Can. $36.00.

Dictatorship, Imperialism & Chaos: Iraq since 1989, Thabit A.J. Abdullah, (2006) London: Zed Books, 136 pp. ISBN: 9781842777879 (paperback) 22.50 US

Iraq in Fragments: The Occupation and its Legacy, Eric Herring and Glen Rangwala, (2006) London: C. Hurst & Company, 354 pp. ISBN: 0801444578 (paperback) $27.95 US

Barriers to Reconciliation: Case Studies on Iraq and PalestineIsrael Conflict, Jacqeline S. Ismael and William Haddad (eds), (2006) Lanham, MD: University Press of America, 320 pp. ISBN: 0761835547 (paperback) $42.00 US

The Way it Works: Inside Ottawa, Eddie Goldenberg, (2006) Toronto: McClelland & Stewart, 402 pp., ISBN 0771033524 (hbk), CDN 36.99