Uncle Sam Would Be a Good Used Car Salesman: On American Economic and Military Dominance

- by Igor Volsky

Progressive policy critics and moderate government insiders have long cautioned against a sustained American presence in the Middle East. American encroachment, they warn, radicalizes young Muslim fundamentalists and substantiates Bin Laden’s message of religious Jihad.

Administration officials dismiss these critics publicly (although rare words of candor do sometimes escape—CIA Chief Goss admitted that the Iraqi invasion has made America less safe) but concede their points privately. Ambitions of U.S. hegemony and supremacy however supersede security concerns. Ideological ambition to “maintain a lock on the world’s energy lifeline and potentially deny access to its global competitors” (like China) is priority number one for American policy makers. Control and access can be maintained in two ways—militarily and economically.

Great historical precedent lies with the former. A cursory examination of policy papers reveals that America’s thirst for influence and resources transcends party lines. President Jimmy Carter’s 1980 doctrine set the modern day precedent. “Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.”

The current Bush administration has pushed this American foreign policy paradigm to its logical conclusion. Since the Persian Gulf holds two of every three barrels of world oil, sustained American presence and control of Iraq guarantees U.S. supremacy. This pronouncement is not just the conspiratorial claim of a liberal columnist; it is mirrored by the official National Defense Strategy of the United States of America report, released last month by the Defense Department. “Our role in the world depends on effectively projecting and sustaining our forces in distant environments where adversaries may seek to deny U.S. access.”

American access to Iraq is currently under construction. The Chicago Tribune reported last year that “U.S. engineers are focusing on constructing 14 ‘enduring,’ long-term encampments… the bases… would be key outposts for Bush administration policy advisers.” Army Brig. Gen Robert Pollman has described the bases as compensation for the U.S. reduction of forces in Saudi Arabia and thus far the U.S. military has spent some $4.5 billion on base construction and maintenance.

Meanwhile, “the Pentagon has made no formal request to establish permanent installations” in Iraq. For a president who espouses proclamations of freedom and democracy, this un-consented use of Iraqi land is politically understandable but morally unsound. Even so, Democracy has been cheapened into propaganda—publicly exploited in times of political convenience but undermined when the will of Iraqis clashes with American policy objectives.

America’s economic influence is similarly problematic. Instead of declaring Saddam’s debt odious and dismissing it outright, the Paris Club, a group of industrialized credit nations, agreed to a three-year 80 percent debt write off. The problem is in the details. The fine print requires Iraq to re arrange its economy to accommodate specified ‘structural adjustments.’ But changes that guarantee maximum foreign investment opportunities for large multinational corporations come at the cost of undercutting public subsidies for Iraqis.

In September of 2004, the International Monetary Fund (IMF) approved an Emergency Post-Conflict Assistance loan to Iraq. The loan laid “the groundwork for the development of a reform program… and the implementation of key structural reforms to transform Iraq into a market economy.” This will limit the new Iraqi government to providing only “the minimum adequate level of social support” while focusing on “implementing key structural reforms… [such as]…restructuring of state-owned enterprises.”

Privatization of resources and reduction of government services could force Iraqi leaders to abolish the public food subsidy system that kept millions out of starvation during the U.S. /U.K. sanctions. A study by the U.N. Children's Fund (UNICEF) found that “many more Iraqis would have died if not for a strong subsidies system that gave food rations to Iraqi families.”

The IMF discourages this kind of social welfare. Iraq will be required to increase foreign investment and sell its government enterprises. Neo-liberal, free trade economic policies, packaged as ‘structural adjustments’, are required medicine for debtor nations. Long pulled off the shelves in most industrialized societies, this bitter medicine is reserved for the underprivileged. Adjustments are sold and marketed as majestic cure-all antibiotics; yet their toxicity has been widely acknowledged.

This too is confirmed by official IMF documentation. A March 2003 IMF study titled, Effects of Financial Globalization on Developing countries: Some Empirical Evidence concluded that “there is no proof in the data that financial globalization has benefited [economic] growth.” Instead the opposite was found to be true. “A number of countries have experienced periodic collapse in growth rates,” after IMF ‘structural adjustment’ policies were adopted.

That this is recognized by the donor nations and considered insignificant is startling. Economic assistance then, has little to do with the empowerment of the disadvantaged. Instead, these institutions are used to further the tacitly stated policy objectives of industrial powers. Whereas a physical military presence ensures direct influence, so-called economic aid encourages the rise of local financial elites and broad economic inequalities. Both are meant to exert American influence and relegate Iraqi sovereignty. Jihadist fears are realized and American security is compromised.