Tuesday, October 14, 2003

The Art of Modern Pillaging. 

Brian Whitaker of the Guardian introduces us to the modern version of pillaging, which is now called "economic development". He points out that the selling off of Iraqi businesses is actually illegal, under the Hague regulations of 1907:

Last month, Mr Bremer issued CPA order number 39, giving foreign investors unrestricted rights to establish businesses in Iraq and/or buy up Iraqi companies.

The order also allows foreign investors to repatriate profits, dividends, interest and royalties immediately and in full. In other words, they can make a fast buck if they want to, without putting anything back.

While few would disagree that Iraq's industry needs modernisation and restructuring, two questions arise: has Mr Bremer the legal powers to do this, and is he going about it in the right way?...

...Mr Bremer shows little interest in drawing lessons from the problems caused by economic "shock therapy" reforms in the former Soviet Union, and in Iraq - with the added factor of military occupation - this can only fuel hostility towards the US.

His order number 39 is also, almost certainly, illegal. The Hague regulations of 1907 spell out the obligations of an occupying power under international law.

Article 43 says that, when occupying forces take over a country, they must "ensure, as far as possible, public order and safety, while respecting, unless absolutely prevented, the laws in force in the country".

This means that Mr Bremer is not allowed to change Iraq's existing laws, including those that govern investment, unless it is "absolutely" essential to do so.

Article 55 says that an occupying power is only the "administrator and usufructuary" of state property. "It must safeguard the capital of these properties, and administer them in accordance with the rules of usufruct," it adds.

Mr Bremer, therefore, appears to have no right to sell off nationalised industries.