Laissez Faire Kaput
Reuters confirms earlier reports that Tom Foley, the Coalition Provisional Authority official in charge of economic policy, has given up on a plan to privatize 150 state-owned companies. The plan, submitted to the Interim Governing Council last fall, was shelved by that body. Many Iraqis feared that the state firms would be sold cheaply to foreign concerns, but Foley insists that the plan all along was to sell them to Iraqis. This statement contradicts the economic plans announced in August, in which the CPA said there would be no licensing or restrictions placed on foreign firms investing in Iraq, and that they would be allowed to own 100% of Iraqi companies and to expatriate profits immediately.
The more extreme laissez-faire projects to which the Washington Consensus supporters in the CPA wanted to subject Iraq were derailed by the guerrilla war and continued instability. Most investors with the money to buy an Iraqi company would be nervous about doing it anyway right about now. As for selling off the state-owned companies, that might not be an easy proposition. The first thing an investor would want to know is if they are profitable or could quickly and cheaply become so. My guess? No.
As I have said in the past, the entire plan contravened the international law concerning occupied territories, which does not permit an occupier to make alterations in the character of the occupied society or to change civil law.
I said this last fall on a radio show where I was a guest with Ruth Wedgewood, a professor of international law at Johns Hopkins. She said I was reading the 1907 Hague Regulations and the Fourth Geneva Accord with a “gimlet eye.” I was taken aback that a specialist in international law would disregard the clear text of those treaties. Then later I found out that Wedgewood is not just a law professor. She serves on the Defense Advisory Board with . . . Tom Foley, Richard Perle, Henry Kissinger, James Woolsey, and the other heavies who helped drag the US into the Iraq war on false pretences. That’s fine, but you know, she never said anything about this affiliation on the show, and it seems to me that she should have, if not recused herself on grounds of being Foley’s fellow board member, at least made known her potential conflict of interest as a commentator.