How the US got its neoliberal way in Iraq

The Iraqis - even those who were willing to cooperate with the United States - wanted, at least on paper, to build a Scandinavian-type welfare system in the Arabian desert, with Iraq’s vast oil wealth to be spent on upholding every Iraqi’s right to education, health care, housing, and other social services. “Social justice is the basis of building society,” the draft declared. All of Iraq’s natural resources would be owned collectively by the Iraqi people. Everyone would have the right to work and the state would be legally bound to provide employment opportunities to everyone. The state would be the Iraqi people’s collective instrument for achieving development. (See key provisions in matrix below.)

In other words, the Iraqis wanted a country different from that for which the Americans had come to Iraq. They, or at least those who were involved in drafting the constitution, wanted nothing of the kind of economic and political system that Bremer and other US officials had been attempting to create in Iraq ever since the occupation began. What the occupation authorities wanted was to fulfill “the wish-list of international investors”, as The Economist magazine described the economic policies they began imposing in the country in 2003.<2>

As direct occupiers, the US enacted laws that give foreign investors equal rights with Iraqis in the domestic market; permit the full repatriation of profits; institute the flat tax system; abolish tariffs; enforce a strict intellectual property rights regime; sell off a whole-range of state-owned companies; reduce food and fuel subsidies; and privatize all kinds of social services such as health, education and water delivery.

By the time the next version was leaked in late July, the progressive provisions in the draft constitution had disappeared.