[Mb-civic] IMF Occupies Iraq, Riots Follow By Matthew Rothschild The Progressive

[Michael Butler]

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    IMF Occupies Iraq, Riots Follow
    By Matthew Rothschild
    The Progressive

    Tuesday 03 January 2006

    Bad enough that the US military is occupying Iraq.

    Now the IMF is occupying the country.

    In December, the International Monetary Fund, in exchange for giving a
loan of $685 million to the Iraqi government, insisted that the Iraqis lift
subsidies on the price of oil and open the economy to more private
investment.

    As the IMF said in a press release of December 23, the Iraqi government
must be committed to "controlling the wage and pensions bill, reducing
subsidies on petroleum products, and expanding the participation of the
private sector in the domestic market for petroleum products."

    The impact of the IMF extortion was swift and brutal.

    "Since the Dec. 15 parliamentary election, fuel prices have increased
five-fold, mostly because the outgoing government of Prime Minister Ibrahim
Jafari has cut subsidies as part of a debt-forgiveness deal it signed with
the International Monetary Fund," the Los Angeles Times reported on December
28.

    "The move has shocked Iraqis long accustomed to hefty subsidies of
gasoline, kerosene, cooking gas, and other fuels."

    Iraqis are getting a nasty taste of the IMF's medicine. "Over the
summer, gas was selling for about five cents a gallon," the LA Times noted.
"Now it's about 65 cents, and at the end of the price increases, gasoline
will cost about the same in Iraq as it does in other countries in the
Persian Gulf, about $1 per gallon. The prices of kerosene, diesel, and
cooking gas have seen similar or steeper increases." The price of public
transportation has also gone up significantly.

    Not surprisingly, these enormous price hikes have led to riots around
the country, with police firing on 3,000 protesters in Nassiryeh, according
to an account on Daily Kos, Iraq's oil minister quit to protest the
government's capitulation to the IMF. According to Daily Kos, Oil Minister
Ibrahim Bahr al-Uloum asked, "Is this how we repay the Iraq citizens who
risked their lives to participate in the elections, by raising fuel prices
in this way?"

    The indestructible Ahmad Chalabi, a longtime favorite of Donald Rumsfeld
and Dick Cheney, replaced al-Uloum.

    The Bush Administration is four-square behind the IMF deal.

    "This arrangement will underpin economic stability and help lay the
foundation for an open and prosperous economy in Iraq," said US Treasury
Secretary John Snow.

    What it is actually underpinning is economic instability. "It's crazy,
socially and politically," Robert Mabro, former chairman of the Oxford
Institute of Energy Studies, told the LA Times.

    Even the Pentagon's "National Strategy for Victory in Iraq" recognized
the need for "balancing the need for economic reform - particularly of
bloated fuel and food subsidies - with political realities."

    But "political realities" on the ground - such as inciting riots and
increasing discontent - don't appear to concern Bush.

    For the Bush Administration, the endorsement of the IMF price increase
represents a schizophrenia that's almost clinical.

    Bush is desperate to rescue his floundering Iraq policy, and yet backing
the IMF plan is like throwing a drowning patient both ends of a lifeline.

    The Iraqi people are sick and tired of the US occupation already, to put
it mildly.

    Now that they are seeing their standard of living plummet, thanks to the
IMF, they are going to be even more irate at the United States, which they
know controls the IMF.

    Caught between deciding whether to try to win hearts and minds or
whether to cling to free market fantasies, Bush has once again chosen to
live in fantasyland.