Six months into the occupation Iraqi society is becoming increasingly fragile. A generation living under war and sanctions has stretched the ties of social solidarity painfully thin.
Those at the bottom of the pile face utter destitution. A World Food Programme (WFP) report released on 23 September estimated the number of Iraqis living below the poverty line had increased since the war to 55 percent of the population, or more than 14 million people.
The Public Distribution System (PDS) - a gigantic welfare system set up by the UN - has been supplying almost the entire Iraqi population with meagre rations since 1997. Millions are completely dependent on the monthly supplies they receive from the PDS, which is funded by the Oil for Food Programme. The WFP report found that between 20 and 25 percent of Iraqis cannot afford the 18 US cents/250 Iraqi dinars per person needed to buy the PDS rations.
By the end of November, UN officials will have handed over the entire rationing system to the occupying powers' Coalition Provisional Authority (CPA), as instructed by UN Security Council resolution 1483, which ended the sanctions on Iraq, and with them the Oil for Food Programme. The UN Office of the Iraq Programme is scathing about the CPA's ability to administer the ration system. The CPA failed to appoint personnel to oversee the transfer of the complex distribution system until August and has proved incapable of guaranteeing security for aid workers to continue the programme. By late September the UN was preparing to cut its losses and leave.
Meanwhile the occupying powers have other priorities. Even before the war started the spoils had been divided. The US army handed out major contracts to Kellog, Brown & Root, a subsidiary of Halliburton (US vice-president Dick Cheney's company) and Fluor, KBR's major rival. USAid engaged a series of private contractors to carry out reconstruction work on Iraq's health system, schools, local administration, sea and airports and capital construction projects. The list of the main contractors reads like a roll-call of the biggest names in corporate crime.
The Californian construction company Bechtel has attracted most of the media's attention. But Bechtel's competitors in looting Iraq are hardly more attractive. Take Dyncorp for example. This British-based company specialises in running training programmes for police officers. Dyncorp's track record in 'post-conflict reconstruction' is far from encouraging. The company paid large out of court settlements to two of its employees who were dismissed after blowing the whistle on company personnel who were trading Bosnian children as sex slaves during Dyncorp's stint in the Balkans.
Like any incoming government, the occupation authorities are quick to stress that economic and social problems are the result of the previous administration's 'wilful neglect' of the country's infrastructure. US officials promote the idea that Iraq's ills are the result of Ba'athist economic planning, rather than 20 years of war, 12 years of sanctions and six months of occupation.
However, far from relying on the mechanisms of the open market, the occupying powers have stacked the 'reconstructed' Iraqi ministries with powerful 'advisers' who provide a crucial link between the corporations and the neo-conservative war planners who have provided the ideological driving force for regime change. The appointment of Dan Amstutz as senior adviser to the Ministry of Agriculture prompted a furious outburst from Kevin Watkins, Oxfam's policy director.
'Putting Dan Amstutz in charge of agricultural reconstruction in Iraq is like putting Saddam Hussein in the chair of a human rights commission,' he said. Amstutz was vice-president of the US grain exporter Cargill. He also served in George Bush Sr's administration as an undersecretary of agriculture and was the US chief negotiator for the Uruguay round of the negotiations over the General Agreement on Tariffs and Trade (GATT), the forerunner of the World Trade Organisation.
It is not just Iraq which will be open for US business under proposals by the Bush administration for a Middle East Free Trade Area. At the World Economic Forum meeting in Amman in June, Paul Bremer sketched a vision of a neoliberal Iraq at the heart of a Middle East in which US, and by implication Israeli, firms would have a free run to dominate Arab markets.
The men and women who are now re-engineering Iraqi society have decades of experience in shock therapy and structural adjustment, but even they can't wave away the problems of postwar Iraq. The country is likely to remain poor for years to come, according to a report by the Institute of International Finance in October. Iraq's oil revenues may reach $10 billion during 2004, but a draft assessment by the World Bank, the UN and the International Monetary Fund estimates that meeting Iraq's basic needs will probably cost $17.5 billion, leaving a substantial shortfall which US taxpayers may yet baulk at filling. And as resistance to the occupation grows, the corporate looters may well find that Iraqi reconstruction is not such a commercially attractive proposition.