Of Oil And Elections

By Antonia Juhasz, AlterNet. Posted January 27, 2005.

Remember when we used to talk about how the war in Iraq was about oil? Remember the banners that read "No blood for oil?" Oil has fallen out of the discussion lately, but it's time to bring it back in light of the Iraqi elections scheduled for this Sunday.

To refresh our collective memory, President Bush himself declared just before the invasion of Iraq that, "Our jobs, our way of life, our own freedom and the freedom of friendly countries around the world would all suffer if control of the world's great oil reserves fell into the hands of Saddam Hussein."

This was Bush Sr., speaking in August 1990, on the eve of the first Persian Gulf War.

More precise are the words of Chevron CEO Kenneth T. Derr speaking in San Francisco in 1988: "Iraq possesses huge reserves of oil and gas — reserves I'd love Chevron to have access to." After two wars and one occupation, Derr may finally get his wish.

On Dec. 22, 2004, Iraqi Finance Minister Abdel Mahdi told a handful of reporters and industry insiders at the National Press Club in Washington, D.C. that Iraq wants to issue a new oil law that would open Iraq's national oil company to private foreign investment. As Mahdi explained: "So I think this is very promising to the American investors and to American enterprise, certainly to oil companies."

In other words, Mahdi is proposing to privatize Iraq's oil and put it into American corporate hands.

According to the finance minister, foreigners would gain access both to "downstream" and "maybe even upstream" oil investment. This means foreigners can sell Iraqi oil and own it under the ground — the very thing for which many argue the U.S. went to war in the first place.

As Vice President Dick Cheney's Defense Policy Guidance report explained back in 1992, "Our overall objective is to remain the predominant outside power in the [Middle East] region and preserve U.S. and Western access to the region's oil."

While few in the American media other than Emad Mckay of Inter Press Service reported on — or even attended — Mahdi’s press conference, the announcement was made with U.S. Undersecretary of State Alan Larson at Mahdi's side. It was intended to send a message — but to whom?

It turns out that Abdel Mahdi is running in the Jan. 30 elections on the ticket of the Supreme Council for the Islamic Revolution (SCIR), the leading Shiite political party. While announcing the selling-off of the resource which provides 95 percent of all Iraqi revenue may not garner Mahdi many Iraqi votes, but it will unquestionably win him tremendous support from the U.S. government and U.S. corporations.

Mahdi's SCIR is far and away the front-runner in the upcoming elections, particularly as it becomes increasingly less possible for Sunnis to vote because the regions where they live are spiraling into deadly chaos. If Bush were to suggest to Iraq’s Interim Prime Minister Iyad Allawi that elections should be called off, Mahdi and the SCIR's ultimate chances of victory will likely decline.

Thus, one might argue that the Bush administration has made a deal with the SCIR: Iraq's oil for guaranteed political power. The Americans are able to put forward such a bargain because Bush still holds the strings in Iraq.

Regardless of what happens in the elections, for at least the next year during which the newly elected National Assembly writes a constitution and Iraqis vote for a new government, the Bush administration is going to control the largest pot of money available in Iraq (the $24 billion in U.S. taxpayer money allocated for the reconstruction), the largest military and the rules governing Iraq's economy. Both the money and the rules will, in turn, be overseen by U.S.-appointed auditors and inspector generals who sit in every Iraqi ministry with five-year terms and sweeping authority over contracts and regulations. However, the one thing which the administration has not been unable to confer upon itself is guaranteed access to Iraqi oil — that is, until now.

Based on all reports from both U.S. military and Iraqi officials, the elections this Sunday could be a blood bath for Iraqis and American troops alike. They are also certain to be far from representative. Democratic elections simply cannot be held under these conditions, nor conditions in which the U.S. government and its corporations exercise such dominant economic and political control.

The Bush administration cannot be permitted to declare a war for "Iraqi freedom" and respond with an economic invasion that turns Iraq into a U.S. corporate grab bag. "No blood for oil" rings as true today as it did 15 years ago.

Antonia Juhasz is a Foreign Policy In Focus scholar based in San Francisco and working on a book about the economic invasion of Iraq.

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