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http://www.harpers.org/BaghdadYearZero.html
Baghdad Year Zero Pillaging Iraq in pursuit of a neocon utopia
By Naomi Klein. Harper's Magazine, September 200.
It was only after I had een in Baghdad for a month that I fo!nd what I was loo"ing for. I had tra#eled to
Ira$ a year after the war egan, at the height of what sho!ld ha#e een a %onstr!%tion oom, !t after wee"s
of sear%hing I had not seen a single pie%e of hea#y ma%hinery apart from tan"s and h!m#ees. &hen I saw it:
a %onstr!%tion %rane. It was ig and yellow and impressi#e, and when I %a!ght a glimpse of it aro!nd a
%orner in a !sy shopping distri%t I tho!ght that I was finally ao!t to witness some of the reconstruction I
had heard so m!%h ao!t. B!t as I got %loser I noti%ed that the %rane was not a%t!ally re!ilding anything'
not one of the omed'o!t go#ernment !ildings that still lay in r!le all o#er the %ity, nor one of the
many power lines that remained in twisted heaps e#en as the heat of s!mmer was starting to ear down. (o,
the %rane was hoisting a giant illoard to the top of a three'story !ilding. )*(B*+,H: H-(.Y /001
(,&*2,+, made in )a!di ,raia.
)eeing the sign, I %o!ldn3t help !t thin" ao!t something )enator 4ohn M%5ain had said a%" in -%toer.
Ira$, he said, is 6a h!ge pot of honey that3s attra%ting a lot of flies.7 &he flies M%5ain was referring to were
the Halli!rtons and Be%htels, as well as the #ent!re %apitalists who flo%"ed to Ira$ in the path %leared y
Bradley 8ighting 9ehi%les and laser'g!ided oms. &he honey that drew them was not :!st no'id %ontra%ts
and Ira$3s famed oil wealth !t the myriad in#estment opport!nities offered y a %o!ntry that had :!st een
%ra%"ed wide open after de%ades of eing sealed off, first y the nationalist e%onomi% poli%ies of )addam
H!ssein, then y asphy;iating *nited (ations san%tions.
+oo"ing at the honey illoard, I was also reminded of the most %ommon e;planation for what has gone
wrong in Ira$, a %omplaint e%hoed y e#eryone from 4ohn <erry to =at B!%hanan: Ira$ is mired in lood
and depri#ation e%a!se >eorge ?. B!sh didn3t ha#e 6a post!ar plan.7 &he only prolem with this theory
is that it isn3t tr!e. &he B!sh ,dministration did ha#e a plan for what it wo!ld do after the war@ p!t simply,
it was to lay o!t as m!%h honey as possile, then sit a%" and wait for the flies.
A A A
&he honey theory of Ira$i re%onstr!%tion stems from the most %herished elief of the !ar"s ideological
architects# that greed is good. (ot good :!st for them and their friends !t good for h!manity, and
%ertainly good for Ira$is. >reed %reates profit, whi%h %reates growth, whi%h %reates :os and prod!%ts and
ser#i%es and e#erything else anyone %o!ld possily need or want. &he role of good go#ernment, then, is to
%reate the optimal %onditions for %orporations to p!rs!e their ottomless greed, so that they in t!rn %an meet
the needs of the so%iety. &he prolem is that go#ernments, e#en neo%onser#ati#e go#ernments, rarely get
the %han%e to pro#e their sa%red theory right: despite their enormo!s ideologi%al ad#an%es, e#en >eorge
B!sh3s 2ep!li%ans are, in their own minds, perennially saotaged y meddling Bemo%rats, intra%tale
!nions, and alarmist en#ironmentalists.
Ira$ was going to %hange all that. In one place on $arth% the theor& !ould finall& be put into practice in
its most perfect and uncompromised form. , %o!ntry of CD million wo!ld not e re!ilt as it was efore
the war@ it wo!ld e erased, disappeared. In its pla%e wo!ld spring forth a gleaming showroom for laissez'
faire e%onomi%s, a !topia s!%h as the world had ne#er seen. .#ery poli%y that lierates m!ltinational
%orporations to p!rs!e their $!est for profit wo!ld e p!t into pla%e: a shr!n"en state, a fle;ile wor"for%e,
open orders, minimal ta;es, no tariffs, no ownership restri%tions. &he people of Ira$ wo!ld, of %o!rse,
ha#e to end!re some short'term pain: assets, pre#io!sly owned y the state, wo!ld ha#e to e gi#en !p to
%reate new opport!nities for growth and in#estment. 4os wo!ld ha#e to e lost and, as foreign prod!%ts
flooded a%ross the order, lo%al !sinesses and family farms wo!ld, !nfort!nately, e !nale to %ompete.
B!t to the a!thors of this plan, these wo!ld e small pri%es to pay for the e%onomi% oom that wo!ld s!rely
e;plode on%e the proper %onditions were in pla%e, a oom so powerf!l the %o!ntry wo!ld pra%ti%ally re!ild
itself.
&he fa%t that the oom ne#er %ame and Ira$ %ontin!es to tremle !nder e;plosions of a #ery different sort
sho!ld ne#er e lamed on the asen%e of a plan. 2ather, the blame rests !ith the plan itself% and the
e'traordinaril& (iolent ideolog& upon !hich it is based.
A A A
&ort!rers elie#e that when ele%tri%al sho%"s are applied to #ario!s parts of the ody sim!ltaneo!sly
s!:e%ts are rendered so %onf!sed ao!t where the pain is %oming from that they e%ome in%apale of
resistan%e. , de%lassified 5I, 65o!nterintelligen%e Interrogation7 man!al from /EFG des%ries how a
tra!ma infli%ted on prisoners opens !p 6an inter#al'whi%h may e e;tremely rief'of s!spended animation,
a "ind of psy%hologi%al sho%" or paralysis. . . . H,It this moment the so!r%e is far more open to suggestion%
far li)elier to compl&.7 , similar theory applies to e%onomi% sho%" therapy, or 6sho%" treatment,7 the !gly
term !sed to des%rie the rapid implementation of free'mar"et reforms imposed on 5hile in the wa"e of
>eneral ,!g!sto =ino%het3s %o!p. &he theory is that if painf!l e%onomi% 6ad:!stments7 are ro!ght in
rapidly and in the aftermath of a seismi% so%ial disr!ption li"e a war, a %o!p, or a go#ernment %ollapse, the
pop!lation will e so st!nned, and so preo%%!pied with the daily press!res of s!r#i#al, that it too will go
into s!spended animation, !nale to resist. ,s =ino%het3s finan%e minister, ,dmiral +orenzo >ot!zzo,
de%lared, 6&he dog3s tail m!st e %!t off in one %hop.7
&hat, in essen%e, was the wor"ing thesis in Ira$, and in "eeping with the elief that pri#ate %ompanies are
more s!ited than go#ernments for #irt!ally e#ery tas", the ?hite Ho!se de%ided to pri#atize the tas" of
pri#atizing Ira$3s state'dominated e%onomy. &wo months efore the war egan, *),IB egan drafting a
wor" order, to e handed o!t to a pri#ate %ompany, to o#ersee Ira$3s 6transition to a s!stainale mar"et'
dri#en e%onomi% system.7 &he do%!ment states that the winning %ompany Jwhi%h t!rned o!t to e the
<=M> offshoot Bearing =ointK will ta"e 6appropriate ad#antage of the !ni$!e opport!nity for rapid
progress in this area presented y the %!rrent %onfig!ration of politi%al %ir%!mstan%es.7 ?hi%h is pre%isely
what happened.
+. =a!l Bremer, who led the *.). o%%!pation of Ira$ from May C, C00G, !ntil he %a!ght an early flight o!t
of Baghdad on 4!ne CL, admits that when he arri#ed, 6Baghdad was on fire, literally, as I dro#e in from the
airport.7 B!t efore the fires from the 6sho%" and awe7 military onsla!ght were e#en e;ting!ished, Bremer
!nleashed his sho%" therapy, p!shing thro!gh more !renching changes in one s!eltering summer than
the International Monetary 8!nd has managed to ena%t o#er three de%ades in +atin ,meri%a. 4oseph )tiglitz,
(oel la!reate and former %hief e%onomist at the ?orld Ban", des%ries Bremer3s reforms as 6an e#en
more radi%al form of sho%" therapy than p!rs!ed in the former )o#iet world.7
&he tone of Bremer3s ten!re was set with his first ma:or a%t on the :o: he fired D00,000 state wor"ers, most
of them soldiers, !t also do%tors, n!rses, tea%hers, p!lishers, and printers. (e;t, he fl!ng open the
%o!ntry3s orders to asol!tely !nrestri%ted imports: no tariffs, no d!ties, no inspe%tions, no ta;es. Ira$,
Bremer de%lared two wee"s after he arri#ed, was 6open for !siness.7
-ne month later, Bremer !n#eiled the centerpiece of his reforms. Before the in#asion, Ira$3s non'oil'
related e%onomy had een dominated y C00 state'owned %ompanies, whi%h prod!%ed e#erything from
%ement to paper to washing ma%hines. In 4!ne, Bremer flew to an e%onomi% s!mmit in 4ordan and
anno!n%ed that these firms wo!ld e pri#atized immediately. 6>etting ineffi%ient state enterprises into
pri#ate hands,7 he said, 6is essential for Ira$3s e%onomi% re%o#ery.7 It wo!ld e the largest state li$!idation
sale sin%e the %ollapse of the )o#iet *nion.
B!t Bremer3s e%onomi% engineering had only :!st eg!n. In )eptemer, to enti%e foreign in#estors to %ome
to Ira$, he ena%ted a radi%al set of laws !npre%edented in their generosity to m!ltinational %orporations.
&here was *rder +,, whi%h lowered Ira$3s %orporate ta; rate from ro!ghly M0 per%ent to a flat /D per%ent.
&here was *rder +-, whi%h allowed foreign %ompanies to own /00 per%ent of Ira$i assets o!tside of the
nat!ral'reso!r%e se%tor. .#en etter, in#estors %o!ld ta"e /00 per%ent of the profits they made in Ira$ o!t of
the %o!ntry@ they wo!ld not e re$!ired to rein#est and they wo!ld not e ta;ed. *nder -rder GE, they
%o!ld sign leases and %ontra%ts that wo!ld last for forty years. *rder 0 wel%omed foreign an"s to Ira$
!nder the same fa#orale terms. .ll that remained of Saddam /ussein"s economic policies !as a la!
restricting trade unions and collecti(e bargaining.
If these poli%ies so!nd familiar, it3s e%a!se they are the same ones m!ltinationals aro!nd the world loy
for from national go#ernments and in international trade agreements. B!t while these reforms are only e#er
ena%ted in part, or in fits and starts, Bremer deli#ered them all, all at on%e. -#ernight, Ira$ went from eing
the most isolated %o!ntry in the world to eing, on paper, its widest'open mar"et.
A A A
,t first, the sho%"'therapy theory seemed to hold: Ira$is, reeling from #iolen%e oth military and e%onomi%,
were far too !sy staying ali#e to mo!nt a politi%al response to Bremer3s %ampaign. ?orrying ao!t the
pri#atization of the sewage system was an !nimaginale l!;!ry with half the pop!lation la%"ing a%%ess to
%lean drin"ing water@ the deate o#er the flat ta; wo!ld ha#e to wait !ntil the lights were a%" on. .#en in
the international press, Bremer3s new laws, tho!gh radi%al, were easily !pstaged y more dramati% news of
politi%al %haos and rising %rime.
)ome people were paying attention, of %o!rse. &hat a!t!mn was awash in 6re!ilding Ira$7 trade shows, in
?ashington, +ondon, Madrid, and ,mman. 0he $conomist described Iraq under Bremer as 1a
capitalist dream%2 and a fl!rry of new %ons!lting firms were la!n%hed promising to help %ompanies get
a%%ess to the Ira$i mar"et, their oards of dire%tors sta%"ed with well'%onne%ted 2ep!li%ans. &he most
prominent was Ne! Bridge Strategies, started y 4oe ,lla!gh, former B!sh'5heney %ampaign manager.
6>etting the rights to distri!te =ro%ter N >amle prod!%ts %an e a gold mine,7 one of the %ompany3s
partners enth!sed. 6-ne well'sto%"ed O'.le#en %o!ld "no%" o!t thirty Ira$i stores@ a ?al'Mart %o!ld ta"e
o#er the %o!ntry.7
)oon there were r!mors that a M%Bonald3s wo!ld e opening !p in downtown Baghdad, f!nding was
almost in pla%e for a )tarwood l!;!ry hotel, and >eneral Motors was planning to !ild an a!to plant. -n
the finan%ial side, H)B5 wo!ld ha#e ran%hes all o#er the %o!ntry, 5itigro!p was preparing to offer
s!stantial loans g!aranteed against f!t!re sales of Ira$i oil, and the ell was going to ring on a (ew Yor"'
style sto%" e;%hange in Baghdad any day.
In only a few months, the postwar plan to t!rn Ira$ into a laoratory for the neo%ons had een realized. +eo
)tra!ss may ha#e pro#ided the intelle%t!al framewor" for in#ading Ira$ preempti#ely, !t it was that other
*ni#ersity of 5hi%ago professor, Milton 8riedman, a!thor of the anti'go#ernment manifesto 5apitalism and
8reedom, who s!pplied the man!al for what to do on%e the %o!ntry was safely in ,meri%a3s hands. &his
represented an enormo!s #i%tory for the most ideologi%al wing of the B!sh ,dministration. B!t it was also
something more: the %!lmination of two interlin"ed power str!ggles, one among Ira$i e;iles ad#ising the
?hite Ho!se on its postwar strategy, the other within the ?hite Ho!se itself.
A A A
,s the British historian Bilip Hiro has shown, in Secrets and 3ies# *peration 4Iraqi 5reedom" and
.fter, the Ira$i e;iles p!shing for the in#asion were di#ided, roadly, into two %amps.
-n one side were 6the pragmatists,7 who fa#ored getting rid of )addam and his immediate ento!rage,
se%!ring a%%ess to oil, and slowly introd!%ing free'mar"et reforms. Many of these e;iles were part of the
State 6epartment"s 5uture of Iraq Pro7ect, whi%h generated a thirteen'#ol!me report on how to restore
asi% ser#i%es and transition to demo%ra%y after the war.
-n the other side was the 6Year Zero2 camp, those who elie#ed that Ira$ was so %ontaminated that it
needed to e r!ed o!t and remade from s%rat%h. &he prime ad#o%ate of the pragmati% approa%h was Iyad
,llawi, a former high'le#el Baathist who fell o!t with )addam and started wor"ing for the 5I,. &he prime
ad#o%ate of the Year Zero approa%h was ,hmad 5halai, whose hatred of the Ira$i state for e;propriating
his family3s assets d!ring the /EDL re#ol!tion ran so deep he longed to see the entire %o!ntry !rned to the
gro!nd'e#erything, that is, !t the -il Ministry, whi%h wo!ld e the n!%le!s of the new Ira$, the %l!ster of
%ells from whi%h an entire nation wo!ld grow. He %alled this pro%ess 6de'Baathifi%ation.7

, parallel attle etween pragmatists and true belie(ers was eing waged within the B!sh
,dministration. &he pragmatists were men li"e )e%retary of )tate 5olin =owell and >eneral 4ay >arner, the
first *.). en#oy to postwar Ira$. >eneral >arner3s plan was straightforward eno!gh: fi; the infrastr!%t!re,
hold $!i%" and dirty ele%tions, lea#e the sho%" therapy to the International Monetary 8!nd, and %on%entrate
on se%!ring *.). military ases on the model of the =hilippines. 6I thin" we sho!ld loo" right now at Ira$
as o!r %oaling station in the Middle .ast,7 he told the BB5. He also paraphrased &. .. +awren%e, saying,
6It3s etter for them to do it imperfe%tly than for !s to do it for them perfe%tly.7
-n the other side was the !s!al %ast of neo%onser#ati#es: 9i%e =resident Bi%" 5heney, )e%retary of Befense
Bonald 2!msfeld Jwho la!ded Bremer3s 6sweeping reforms7 as 6some of the most enlightened and in#iting
ta; and in#estment laws in the free world7K, Bep!ty )e%retary of Befense =a!l ?olfowitz, and, perhaps
most %entrally, *nderse%retary of Befense Bo!glas 8eith. ?hereas the )tate Bepartment had its 8!t!re of
Ira$ report, the neo%ons had 8S.I6"s contract !ith Bearing Point to rema)e Iraq"s econom&: in /0L
pages, 6pri#atization7 was mentioned no fewer than fifty'one times. &o the tr!e elie#ers in the ?hite
Ho!se, >eneral >arner3s plans for postwar Ira$ seemed hopelessly !namitio!s. ?hy settle for a mere
%oaling station when yo! %an ha#e a model free mar"etP ?hy settle for the =hilippines when yo! %an ha#e
a ea%on !nto the worldP
0he Iraqi Year Zeroists made nat!ral allies for the ?hite Ho!se neo%onser#ati#es: 5halai3s seething
hatred of the Baathist state fit ni%ely with the neo%ons3 hatred of the state in general, and the two agendas
effortlessly merged. &ogether, they %ame to imagine the in#asion of Ira$ as a "ind of 2apt!re: where the
rest of the world saw death, they saw irth'a %o!ntry redeemed thro!gh #iolen%e, %leansed y fire. Ira$
wasn3t eing destroyed y %r!ise missiles, %l!ster oms, %haos, and looting@ it was eing orn again. ,pril
E, C00G, the day Baghdad fell, was Bay -ne of Year Zero.
?hile the war was eing waged, it still wasn3t %lear whether the pragmatists or the Year Zeroists wo!ld e
handed %ontrol o#er o%%!pied Ira$. B!t the speed with whi%h the nation was %on$!ered dramati%ally
in%reased the neo%ons3 politi%al %apital, sin%e they had een predi%ting a 6%a"ewal"7 all along. .ight days
after >eorge B!sh landed on that air%raft %arrier !nder a anner that said 9ISSI*N .::*9P3IS/$6,
the =resident p!li%ly signed on to the neo%ons3 #ision for Ira$ to e%ome a model %orporate state that
wo!ld open !p the entire region. -n May E, B!sh proposed the 6estalishment of a *.).'Middle .ast free
trade area within a de%ade7@ three days later, B!sh sent Paul Bremer to Baghdad to repla%e 4ay >arner,
who had een on the :o for only three wee"s. &he message was !ne$!i#o%al: the pragmatists had lost@ Ira$
wo!ld elong to the elie#ers.
, 2eagan'era diplomat t!rned entreprene!r, Bremer had re%ently pro#en his aility to transform r!le into
gold y waiting e;a%tly one month after the )eptemer // atta%"s to la!n%h 5risis 5ons!lting =ra%ti%e, a
se%!rity %ompany selling 6terrorism ris" ins!ran%e7 to m!ltinationals. Bremer had two lie!tenants on the
e%onomi% front: &homas 8oley and Mi%hael 8leis%her, the heads of 6pri#ate se%tor de#elopment7 for the
:oalition Pro(isional .uthorit& J5=,K. 8oley is a >reenwi%h, 5onne%ti%!t, m!ltimillionaire, a longtime
friend of the B!sh family and a B!sh'5heney %ampaign 6pioneer7 who has des%ried Ira$ as a modern
5alifornia 6gold r!sh.7 8leis%her, a #ent!re %apitalist, is the rother of former ?hite Ho!se spo"esman ,ri
8leis%her. (either man had any high'le#el diplomati% e;perien%e and oth !se the term %orporate
6t!rnaro!nd7 spe%ialist to des%rie what they do. ,%%ording to 8oley, this !ni$!ely $!alified them to
manage Ira$3s e%onomy e%a!se it was 6the mother of all t!rnaro!nds.7
Many of the other 5=, postings were e$!ally ideologi%al. 0he ;reen Zone, the %ity within a %ity that
ho!ses the o%%!pation head$!arters in )addam3s former pala%e, was filled with Yo!ng 2ep!li%ans straight
o!t of the /eritage 5oundation, all of them gi#en responsiility they %o!ld ne#er ha#e dreamed of
re%ei#ing at home. 4ay Hallen, a twenty'fo!r'year'old who had applied for a :o at the ?hite Ho!se, was
p!t in %harge of la!n%hing Baghdad3s new sto%" e;%hange. )%ott .rwin, a twenty'one'year'old former
intern to Bi%" 5heney, reported in an email home that 6I am assisting Ira$is in the management of finan%es
and !dgeting for the domesti% se%!rity for%es.7 &he %ollege senior3s fa#orite :o efore this oneP 6My
time as an i%e'%ream tr!%" dri#er.7 In those early days, the >reen Zone felt a it li"e the =ea%e 5orps, for
people who thin" the =ea%e 5orps is a %omm!nist plot. It was a %han%e to sleep on %ots, wear army oots,
and %ry 6in%oming7'all while eing g!arded aro!nd the %lo%" y real soldiers.
&he teams of <=M> a%%o!ntants, in#estment an"ers, thin"'tan" lifers, and Yo!ng 2ep!li%ans that
pop!late the >reen Zone ha#e m!%h in %ommon with the IM8 missions that rearrange the e%onomies of
de#eloping %o!ntries from the presidential s!ites of )heraton hotels the world o#er. .;%ept for one rather
signifi%ant differen%e: in Ira$ they were not negotiating with the go#ernment to a%%ept their 6str!%t!ral
ad:!stments7 in e;%hange for a loan@ they !ere the go#ernment.
)ome small steps were ta"en, howe#er, to ring Ira$3s *.).'appointed politi%ians inside. Yegor >aidar, the
mastermind of 2!ssia3s mid'nineties pri#atization a!%tion that ga#e away the %o!ntry3s assets to the
reigning oligar%hs, was in#ited to share his wisdom at a %onferen%e in Baghdad. Mare" Bel"a, who as
finan%e minister o#ersaw the same pro%ess in =oland, was ro!ght in as well. &he Ira$is who pro#ed most
gifted at mo!thing the neo%on lines were sele%ted to a%t as what *),IB %alls lo%al 6poli%y %hampions7'
men li"e ,hmad al M!"htar, who told me of his %o!ntrymen, 6&hey are lazy. &he Ira$is y nat!re, they are
#ery dependent. . . . &hey will ha#e to depend on themsel#es, it is the only way to s!r#i#e in the world
today.7 ,ltho!gh he has no e%onomi%s a%"gro!nd and his last :o was reading the .nglish'lang!age news
on tele#ision, al M!"htar was appointed dire%tor of foreign relations in the Ministry of &rade and is leading
the %harge for Ira$ to :oin the ?orld &rade -rganization.
A A A
I had een following the e%onomi% front of the war for almost a year efore I de%ided to go to Ira$. I
attended the 62e!ilding Ira$7 trade shows, st!died Bremer3s ta; and in#estment laws, met with
%ontra%tors at their home offi%es in the *nited )tates, inter#iewed the go#ernment offi%ials in ?ashington
who are ma"ing the poli%ies. B!t as I prepared to tra#el to Ira$ in Mar%h to see this e;periment in free'
mar"et !topianism !p %lose, it was e%oming in%reasingly %lear that all !as not going according to plan.
Bremer had een wor"ing on the theory that if yo! !ild a %orporate !topia the %orporations will %ome'!t
where were theyP ,meri%an m!ltinationals were happy to a%%ept *.). ta;payer dollars to re%onstr!%t the
phone or ele%tri%ity systems, !t they weren3t sin"ing their own money into Ira$. &here was, as yet, no
M%Bonald3s or ?al'Mart in Baghdad, and e#en the sales of state fa%tories, anno!n%ed so %onfidently nine
months earlier, had not materialized.
)ome of the hold!p had to do with the physi%al ris"s of doing !siness in Ira$. B!t there were other more
signifi%ant ris"s as well. ?hen =a!l Bremer shredded Ira$3s Baathist %onstit!tion and repla%ed it with what
&he .%onomist greeted appro#ingly as 6the wish list of foreign in#estors,7 there was one small detail he
failed to mention# It !as all completel& illegal. &he 5=, deri#ed its legal a!thority from 8nited Nations
Securit& :ouncil <esolution =>+, passed in May C00G, whi%h re%ognized the *nited )tates and Britain as
Ira$3s legitimate occupiers. It was this resol!tion that empowered Bremer to !nilaterally ma"e laws in Ira$.
B!t the resol!tion also stated that the *.). and Britain m!st 6%omply f!lly with their oligations !nder
international law in%l!ding in parti%!lar the ;ene(a :on(entions of /EME and the /ague <egulations of
/E0O.7 Both %on#entions were orn as an attempt to %!rtail the !nfort!nate histori%al tenden%y among
o%%!pying powers to rewrite the r!les so that they %an e%onomi%ally strip the nations they %ontrol. ?ith this
in mind, the %on#entions stip!late that an occupier must abide b& a countr&"s e'isting la!s !nless
6asol!tely pre#ented7 from doing so. &hey also state that an occupier does not o!n the 6p!li% !ildings,
real estate, forests and agri%!lt!ral assets7 of the %o!ntry it is o%%!pying !t is rather their 6administrator7
and %!stodian, "eeping them se%!re !ntil so#ereignty is reestalished. &his was the tr!e threat to the Year
Zero plan: sin%e ,meri%a didn3t own Ira$3s assets, it %o!ld not legally sell them, whi%h meant that after the
o%%!pation ended, an Ira$i go#ernment %o!ld %ome to power and de%ide that it wanted to "eep the state
%ompanies in p!li% hands, or, as is the norm in the >!lf region, to ar foreign firms from owning /00
per%ent of national assets. If that happened, in#estments made !nder Bremer3s r!les %o!ld e e;propriated,
lea#ing firms with no re%o!rse e%a!se their in#estments had #iolated international law from the o!tset.
By (o#emer, trade la!&ers started to ad#ise their %orporate %lients not to go into Ira$ :!st yet, that it
wo!ld e etter to wait !ntil after the transition. Insurance companies were so spoo"ed that not a single
one of the ig firms wo!ld ins!re in#estors for 6politi%al ris",7 that high'sta"es area of ins!ran%e law that
prote%ts %ompanies against foreign go#ernments t!rning nationalist or so%ialist and e;propriating their
in#estments.
.#en the *.).'appointed Ira$i politi%ians, !p to now so oedient, were getting ner#o!s ao!t their own
politi%al f!t!res if they went along with the pri#atization plans. 5omm!ni%ations Minister Haider al',adi
told me ao!t his first meeting with Bremer. 6I said, Q+oo", we don3t ha#e the mandate to sell any of this.
=ri#atization is a ig thing. ?e ha#e to wait !ntil there is an Ira$i go#ernment.37 Minister of Ind!stry
Mohamad &ofi$ was e#en more dire%t: 6I am not going to do something that is not legal, so that3s it.7
Both al',adi and &ofi$ told me ao!t a meeting'ne#er reported in the press'that too" pla%e in late -%toer
C00G. ,t that gathering the twenty'fi#e memers of Ira$3s >o#erning 5o!n%il as well as the twenty'fi#e
interim ministers de%ided !nanimo!sly that they wo!ld not parti%ipate in the pri#atization of Ira$3s state'
owned %ompanies or of its p!li%ly owned infrastr!%t!re.
B!t Bremer didn3t gi#e !p. International law prohiits o%%!piers from selling state assets themsel#es, !t it
doesn3t say anything ao!t the puppet go(ernments the& appoint. -riginally, Bremer had pledged to hand
o#er power to a dire%tly ele%ted Ira$i go#ernment, !t in early (o#emer he went to ?ashington for a
pri#ate meeting with =resident B!sh and %ame a%" with a Plan B. -n 4!ne G0 the o%%!pation wo!ld
offi%ially end'!t not really. It wo!ld e repla%ed y an appointed go#ernment, %hosen y ?ashington. &his
go#ernment wo!ld not e o!nd y the international laws pre#enting o%%!piers from selling off state assets,
!t it wo!ld e o!nd y an 6interim %onstit!tion,7 a do%!ment that wo!ld prote%t Bremer3s in#estment and
pri#atization laws.
&he plan was ris"y. Bremer3s 4!ne G0 deadline was awf!lly %lose, and it was %hosen for a less than ideal
reason: so that =resident B!sh %o!ld tr!mpet the end of Ira$3s o%%!pation on the %ampaign trail. If
e#erything went a%%ording to plan, Bremer wo!ld s!%%eed in for%ing a 6so#ereign7 Ira$i go#ernment to
%arry o!t his illegal reforms. B!t if something went wrong, he wo!ld ha#e to go ahead with the 4!ne G0
hando#er anyway e%a!se y then <arl 2o#e, and not Bi%" 5heney or Bonald 2!msfeld, wo!ld e %alling
the shots. ,nd if it %ame down to a %hoi%e etween ideology in Ira$ and the ele%taility of >eorge ?. B!sh,
e#eryone "new whi%h wo!ld win.
A A A
,t first, =lan B seemed to e right on tra%". Bremer pers!aded the Ira$i >o#erning 5o!n%il to agree to
e#erything: the new timetale, the interim go#ernment, and the interim %onstit!tion. He e#en managed to
slip into the %onstit!tion a %ompletely o#erloo"ed %la!se, .rticle 2?. It stated that for the d!ration of the
interim go#ernment, 6&he laws, reg!lations, orders and dire%ti#es iss!ed y the 5oalition =ro#isional
,!thority . . . shall remain in for%e7 and %o!ld only e %hanged after general ele%tions are held.
Bremer had found his legal loophole# &here wo!ld e a window'se#en months'when the o%%!pation was
offi%ially o#er !t efore general ele%tions were s%hed!led to ta"e pla%e. ?ithin this window, the Hag!e
and >ene#a 5on#entions3 ans on pri#atization wo!ld no longer apply, !t Bremer3s own laws, than"s to
,rti%le CF, wo!ld stand. B!ring these se#en months, foreign in#estors %o!ld %ome to Ira$ and sign forty'
year %ontra%ts to !y !p Ira$i assets. If a f!t!re ele%ted Ira$i go#ernment de%ided to %hange the r!les,
in#estors %o!ld s!e for %ompensation.
B!t Bremer had a formidale opponent: >rand ,yatollah .li al Sistani, the most senior )hia %leri% in Ira$.
al )istani tried to lo%" Bremer3s plan at e#ery t!rn, %alling for immediate dire%t ele%tions and for the
%onstit!tion to e written after those ele%tions, not efore. Both demands, if met, wo!ld ha#e %losed
Bremer3s pri#atization window. &hen, on 9arch 2% with the )hia memers of the >o#erning 5o!n%il
ref!sing to sign the interim %onstit!tion, fi#e oms e;ploded in front of mos$!es in <arala and Baghdad,
"illing %lose to C00 worshipers. >eneral 4ohn ,izaid, the top *.). %ommander in Ira$, warned that the
%o!ntry was on the #erge of %i#il war. 8rightened y this prospe%t, al )istani a%"ed down and the )hia
politi%ians signed the interim %onstit!tion. It was a familiar story: the sho%" of a #iolent atta%" pa#ed the
way for more sho%" therapy.
?hen I arri#ed in Ira$ a wee" later, the e%onomi% pro:e%t seemed to e a%" on tra%". ,ll that remained for
Bremer was to get his interim %onstit!tion ratified y a )e%!rity 5o!n%il resol!tion, then the ner#o!s
lawyers and ins!ran%e ro"ers %o!ld rela; and the sell'off of Ira$ %o!ld finally egin. &he 5=,, meanwhile,
had la!n%hed a ma:or new =.2. offensi#e designed to reass!re in#estors that Ira$ was still a safe and
e;%iting pla%e to do !siness. &he %enterpie%e of the %ampaign was 6estination Baghdad $'position, a
massi#e trade show for potential in#estors to e held in early ,pril at the Baghdad International
8airgro!nds. It was the first s!%h e#ent inside Ira$, and the organizers had randed the trade fair 6BBR,7 as
if it were some sort of Mo!ntain Bew'sponsored dirt'i"e ra%e. In "eeping with the e;treme'sports theme,
&homas 8oley tra#eled to ?ashington to tell a gathering of e;e%!ti#es that the ris"s in Ira$ are a"in 6to
s"ydi#ing or riding a motor%y%le, whi%h are, to many, #ery a%%eptale ris"s.7
B!t three ho!rs after my arri#al in Baghdad, I was finding these reass!ran%es e;tremely hard to elie#e. I
had not &et unpac)ed !hen m& hotel room !as filled !ith debris and the !indo!s in the lobb& !ere
shattered. Bown the street, the Mo!nt +eanon Hotel had :!st een omed, at that point the largest atta%"
of its "ind sin%e the offi%ial end of the war. &he ne;t day, another hotel was omed in Basra, then two
8innish !sinessmen were m!rdered on their way to a meeting in Baghdad. Brigadier >eneral Mar"
<immitt finally admitted that there was a pattern at wor": 6the e;tremists ha#e started shifting away from
the hard targets . . . HandI are now going o!t of their way to spe%ifi%ally target softer targets.7 &he ne;t day,
the State 6epartment updated its tra(el ad(isor&: *.). %itizens were 6strongly warned against tra#el to
Ira$.7
&he physi%al ris"s of doing !siness in Ira$ seemed to e spiraling o!t of %ontrol. &his, on%e again, was not
part of the original plan. ?hen Bremer first arri#ed in Baghdad, the armed resistan%e was so low that he
was ale to wal" the streets with a minimal se%!rity ento!rage. B!ring his first fo!r months on the :o, /0E
*.). soldiers were "illed and DO0 were wo!nded. In the following fo!r months, when Bremer3s sho%"
therapy had ta"en effe%t, the n!mer of *.). %as!alties almost do!led, with /ED soldiers "illed and /,FGG
wo!nded. &here are many in Ira$ who arg!e that these e#ents are %onne%ted'that Bremer3s reforms were
the single largest fa%tor leading to the rise of armed resistan%e.
&a"e, for instan%e, Bremer3s first %as!alties. 0he soldiers and !or)ers he laid off !ithout pensions or
se(erance pa& didn"t all disappear quietl&. Many of them went straight into the m!:ahedeen, forming the
a%"one of the armed resistan%e. 6Half a million people are now worse off, and there yo! ha#e the water
tap that "eeps the ins!rgen%y going. It3s alternati#e employment,7 says H!ssain <!a, head of the
prominent Ira$i !siness gro!p <!a 5ons!lting. )ome of Bremer3s other e%onomi% %as!alties also ha#e
failed to go $!ietly. It t!rns o!t that many of the !sinessmen whose %ompanies are threatened y Bremer3s
in#estment laws ha#e de%ided to ma"e in#estments of their own'in the resistan%e. It is partly their money
that "eeps fighters in <alashni"o#s and 2=>s.
&hese de#elopments present a %hallenge to the asi% logi% of sho%" therapy: the neo%ons were %on#in%ed
that if they ro!ght in their reforms $!i%"ly and r!thlessly, Ira$is wo!ld e too st!nned to resist. B!t the
sho%" appears to ha#e had the opposite effe%t@ rather than the predi%ted paralysis, it :olted many Ira$is into
a%tion, m!%h of it e;treme. Haider al',adi, Ira$3s minister of %omm!ni%ation, p!ts it this way: 6?e "now
that there are terrorists in the %o!ntry, !t pre#io!sly they were not s!%%essf!l, they were isolated. (ow
e%a!se the whole %o!ntry is !nhappy, and a lot of people don3t ha#e :os . . . these terrorists are finding
listening ears.7
Bremer was now at odds not only with the Ira$is who opposed his plans !t with *.) military %ommanders
%harged with p!tting down the ins!rgen%y his poli%ies were feeding. Hereti%al $!estions egan to e raised:
instead of laying people off, what if the 5=, a%t!ally %reated :os for Ira$isP ,nd instead of r!shing to sell
off Ira$3s C00 state'owned firms, how ao!t p!tting them a%" to wor"P
A A A
8rom the start, the neo%ons r!nning Ira$ had shown nothing !t disdain for Ira$3s state'owned %ompanies.
In "eeping with their Year ZeroPapo%alypti% glee, when looters des%ended on the fa%tories d!ring the war,
8.S. forces did nothing. Sabah .saad, managing dire%tor of a refrigerator fa%tory o!tside Baghdad, told
me that while the looting was going on, he went to a neary *.). ,rmy ase and egged for help. 6I as"ed
one of the offi%ers to send two soldiers and a #ehi%le to help me "i%" o!t the looters. I was %rying. &he
offi%er said, Q)orry, we %an3t do anything, we need an order from =resident B!sh.37 Ba%" in ?ashington,
Bonald 2!msfeld shr!gged. 68ree people are free to ma"e mista"es and %ommit %rimes and do ad things.7
&o see the remains of ,saad3s footall'field'size wareho!se is to !nderstand why 8ran" >ehry had an
artisti% %risis after )eptemer // and was riefly !nale to design str!%t!res resemling the r!le of
modern !ildings. ,saad3s looted and !rned fa%tory loo"s remar"aly li"e a hea#y'metal #ersion of
>ehry3s >!ggenheim in Bilao, )pain, with wa#es of steel, !%"led y fire, lying in terrifyingly ea!tif!l
golden heaps. Yet all was not lost. 6&he looters were good'hearted,7 one of ,saad3s painters told me,
e;plaining that they left the tools and ma%hines ehind, 6so we %o!ld wor" again.7 Be%a!se the ma%hines
are still there, many fa%tory managers in Ira$ say that it wo!ld ta"e little for them to ret!rn to f!ll
prod!%tion. &hey need emergen%y generators to %ope with daily la%"o!ts, and they need %apital for parts
and raw materials. If that happened, it wo!ld ha#e tremendo!s impli%ations for Ira$3s stalled re%onstr!%tion,
e%a!se it wo!ld mean that many of the "ey materials needed to re!ild'%ement and steel, ri%"s and
f!rnit!re'%o!ld e prod!%ed inside the %o!ntry.
B!t it hasn3t happened. Immediately after the nominal end of the war, 5ongress appropriated SC.D illion
for the reconstruction of Ira$, followed y an additional S/L.M illion in -%toer. Yet as of 4!ly C00M,
Ira$3s state'owned fa%tories had een pointedly e;%l!ded from the re%onstr!%tion %ontra%ts. Instead, the
billions ha(e all gone to @estern companies% !ith most of the materials for the reconstruction
imported at great e'pense from abroad.
?ith !nemployment as high as FO per%ent, the imported prod!%ts and foreign wor"ers flooding a%ross the
orders ha#e e%ome a so!r%e of tremendous resentment in Iraq and yet another open tap f!eling the
ins!rgen%y. ,nd Ira$is don3t ha#e to loo" far for reminders of this in:!sti%e@ it3s on display in the most
!i$!ito!s symol of the o%%!pation: the blast !all. &he ten'foot'high slas of reinfor%ed %on%rete are
e#erywhere in Ira$, separating the prote%ted'the people in !ps%ale hotels, l!;!ry homes, military ases,
and, of %o!rse, the >reen Zone'from the !nprote%ted and e;posed. If that wasn3t in:!ry eno!gh, all the last
walls are imported, from <!rdistan, &!r"ey, or e#en farther afield, this despite the fa%t that Ira$ was on%e a
ma:or man!fa%t!rer of %ement, and %o!ld easily e again. &here are se#enteen state'owned %ement fa%tories
a%ross the %o!ntry, !t most are idle or wor"ing at only half %apa%ity. ,%%ording to the Ministry of Ind!stry,
not one of these fa%tories has re%ei#ed a single %ontra%t to help with the re%onstr!%tion, e#en tho!gh they
%o!ld prod!%e the walls and meet other needs for %ement at a greatly red!%ed %ost. &he 5=, pays !p to
S/,000 per imported last wall@ lo%al man!fa%t!rers say they %o!ld ma"e them for S/00. Minister &ofi$
says there is a simple reason why the ,meri%ans ref!se to help get Ira$3s %ement fa%tories r!nning again:
among those ma"ing the de%isions, 1no one belie(es in the public sector.2A/I
&his "ind of ideologi%al lindness has t!rned Ira$3s o%%!piers into prisoners of their own poli%ies, hiding
ehind walls that, y their #ery e;isten%e, f!el the rage at the *.). presen%e, therey feeding the need for
more walls. In Baghdad the %on%rete arriers ha#e een gi#en a pop!lar ni%"name: Bremer @alls.
,s the ins!rgen%y grew, it soon e%ame %lear that if Bremer went ahead with his plans to sell off the state
%ompanies, it %o!ld worsen the #iolen%e. &here was no $!estion that pri#atization wo!ld re$!ire layoffs:
the Ministry of Ind!stry estimates that ro!ghly /MD,000 wor"ers wo!ld ha#e to e fired to ma"e the firms
desirale to in#estors, with ea%h of those wor"ers s!pporting, on a#erage, fi#e family memers. 8or Ira$3s
esieged o%%!piers the $!estion was: ?o!ld these sho%"'therapy %as!alties a%%ept their fate or wo!ld they
reelP
A A A
&he answer arri#ed, in rather dramati% fashion, at one of the largest state'owned %ompanies, the >eneral
5ompany for 9egetale -ils. &he %omple; of si; fa%tories in a Baghdad ind!strial zone prod!%es %oo"ing
oil, hand soap, la!ndry detergent, sha#ing %ream, and shampoo. ,t least that is what I was told y a
re%eptionist who ga#e me glossy ro%h!res and %alendars oasting of 6modern instr!ments7 and 6the latest
and most !p to date de#elopments in the field of ind!stry.7 B!t when I approa%hed the soap fa%tory, I
dis%o#ered a gro!p of wor"ers sleeping o!tside a dar"ened !ilding. -!r g!ide r!shed ahead, sho!ting
something to a woman in a white la %oat, and s!ddenly the fa%tory s%ramled into a%ti#ity: lights swit%hed
on, motors re##ed !p, and wor"ers'still lin"ing off sleep'egan filling two'liter plasti% ottles with pale
l!e Zahi rand dishwashing li$!id.
I as"ed (ada ,hmed, the woman in the white %oat, why the fa%tory wasn3t wor"ing a few min!tes efore.
)he e;plained that they ha#e only eno!gh ele%tri%ity and materials to r!n the ma%hines for a %o!ple of
ho!rs a day, !t when g!ests arri#e'wo!ld'e in#estors, ministry offi%ials, :o!rnalists'they get them going.
68or show,7 she e;plained. Behind !s, a dozen !l"y ma%hines sat idle, %o#ered in sheets of d!sty plasti%
and se%!red with d!%t tape.
In one dar" %orner of the plant, we %ame a%ross an old man h!n%hed o#er a sa%" filled with white plasti%
%aps. ?ith a thin metal lade lodged in a wedge of wa;, he %aref!lly whittled down the edges of ea%h %ap,
lea#ing a pile of sha#ings at his feet. 6?e don3t ha#e the spare part for the proper mold, so we ha#e to %!t
them y hand,7 his s!per#isor e;plained apologeti%ally. 6?e ha#en3t re%ei#ed any parts from >ermany
sin%e the san%tions egan.7 I noti%ed that e#en on the assemly lines that were nominally wor"ing there
was almost no me%hanization: ottles were held !nder spo!ts y hand e%a!se %on#eyor elts don3t %on#ey,
lids on%e snapped on y ma%hines were eing hammered in pla%e with wooden mallets. .#en the water for
the fa%tory was drawn from an o!tdoor well, hoisted y hand, and %arried inside.
&he sol!tion proposed y the *.). o%%!piers was not to fi; the plant !t to sell it, and so when Bremer
anno!n%ed the pri#atization a!%tion a%" in 4!ne C00G this was among the first %ompanies mentioned. Yet
when I #isited the fa%tory in Mar%h, noody wanted to tal" ao!t the pri#atization plan@ the mere mention
of the word inside the plant inspired aw"ward silen%es and meaningf!l glan%es. &his seemed an !nnat!ral
amo!nt of s!te;t for a soap fa%tory, and I tried to get to the ottom of it when I inter#iewed the assistant
manager. B!t the inter#iew itself was e$!ally odd: I had spent half a wee" setting it !p, s!mitting written
$!estions for appro#al, getting a signed letter of permission from the minister of ind!stry, eing $!estioned
and sear%hed se#eral times. B!t when I finally egan the inter#iew, the assistant manager ref!sed to tell me
his name or let me re%ord the %on#ersation. 6,ny manager mentioned in the press is atta%"ed afterwards,7
he said. ,nd when I as"ed whether the %ompany was eing sold, he ga#e this oli$!e response: 6If the
de%ision was !p to the wor"ers, they are against pri#atization@ !t if it3s !p to the high'ran"ing offi%ials and
go#ernment, then pri#atization is an order and orders m!st e followed.7
I left the plant feeling that I "new less than when I3d arri#ed. B!t on the way o!t of the gates, a yo!ng
se%!rity g!ard handed my translator a note. He wanted !s to meet him after wor" at a neary resta!rant, 6to
find o!t what is really going on with pri#atization.7 His name was Mahm!d, and he was a twenty'fi#e'year'
old with a neat eard and ig la%" eyes. J8or his safety, I ha#e omitted his last name.K His story egan in
4!ly, a few wee"s after Bremer3s pri#atization anno!n%ement. &he %ompany3s manager, on his way to wor",
was shot to death. =ress reports spe%!lated that the manager was m!rdered e%a!se he was in fa#or of
pri#atizing the plant, !t Mahm!d was %on#in%ed that he was "illed e%a!se he opposed the plan. 6He
wo!ld ne#er ha#e sold the fa%tories li"e the ,meri%ans want. &hat3s why they "illed him.7
&he dead man was repla%ed y a new manager, M!dhfar 4a3far. )hortly after ta"ing o#er, 4a3far %alled a
meeting with ministry offi%ials to dis%!ss selling off the soap fa%tory, whi%h wo!ld in#ol#e laying off two
thirds of its employees. >!arding that meeting were se#eral se%!rity offi%ers from the plant. &hey listened
%losely to 4a3far3s plans and promptly reported the alarming news to their %owor"ers. 6?e were sho%"ed,7
Mahm!d re%alled. 6If the pri#ate se%tor !ys o!r %ompany, the first thing they wo!ld do is red!%e the staff
to ma"e more money. ,nd we will e for%ed into a #ery hard destiny, e%a!se the fa%tory is o!r only way of
li#ing.7
8rightened y this prospe%t, a gro!p of se#enteen wor"ers, in%l!ding Mahm!d, mar%hed into 4a3far3s offi%e
to %onfront him on what they had heard. 6*nfort!nately, he wasn3t there, only the assistant manager, the
one yo! met,7 Mahm!d told me. , fight ro"e o!t: one wor"er str!%" the assistant manager, and a
odyg!ard fired three shots at the wor"ers. &he %rowd then atta%"ed the odyg!ard, too" his g!n, and,
Mahm!d said, 6staed him with a "nife in the a%" three times. He spent a month in the hospital.7 In
4an!ary there was e#en more #iolen%e. -n their way to wor", 4a3far, the manager, and his son were shot
and adly in:!red. Mahm!d told me he had no idea who was ehind the atta%", !t I was starting to
!nderstand why fa%tory managers in Ira$ try to "eep a low profile.
,t the end of o!r meeting, I as"ed Mahm!d what wo!ld happen if the plant was sold despite the wor"ers3
o:e%tions. 6&here are two %hoi%es,7 he said, loo"ing me in the eye and smiling "indly. 6.ither we will set
the fa%tory on fire and let the flames de#o!r it to the gro!nd, or we will low o!rsel#es !p inside of it. B!t
it will not e pri#atized.7
If there e#er was a moment when Ira$is were too disoriented to resist sho%" therapy, that moment has
definitely passed. +aor relations, li"e e#erything else in Ira$, has e%ome a lood sport. &he #iolen%e on
the streets howls at the gates of the fa%tories, threatening to eng!lf them. ?or"ers fear :o loss as a death
senten%e, and managers, in t!rn, fear their wor"ers, a fa%t that ma"es pri#atization distin%tly more
%ompli%ated than the neo%ons foresaw.HCI
A A A
,s I left the meeting with Mahm!d, I got word that there was a ma:or demonstration o!tside the 5=,
head$!arters. )!pporters of the radi%al yo!ng %leri% Mo$tada al )adr were protesting the %losing of their
newspaper, al Hawza, y military poli%e. &he 5=, a%%!sed al Hawza of p!lishing 6false arti%les7 that
%o!ld 6pose the real threat of #iolen%e.7 ,s an e;ample, it %ited an arti%le that %laimed Bremer 6is p!rs!ing
a poli%y of star#ing the Ira$i people to ma"e them preo%%!pied with pro%!ring their daily read so they do
not ha#e the %han%e to demand their politi%al and indi#id!al freedoms.7 &o me it so!nded less li"e hate
literat!re than a %on%ise s!mmary of Milton 8riedman3s re%ipe for sho%" therapy.
, few days efore the newspaper was sh!t down, I had gone to <!fa d!ring 8riday prayers to listen to al
)adr at his mos$!e. He had la!n%hed into a tirade against Bremer3s newly signed interim %onstit!tion,
%alling it 6an !n:!st, terrorist do%!ment.7 &he message of the sermon was %lear: >rand ,yatollah ,li al
)istani may ha#e a%"ed down on the %onstit!tion, !t al )adr and his s!pporters were still determined to
fight it'and if they s!%%eeded they wo!ld saotage the neo%ons3 %aref!l plan to saddle Ira$3s ne;t
go#ernment with their 6wish list7 of laws. ?ith the %losing of the newspaper, Bremer was gi#ing al )adr
his response: he wasn3t negotiating with this yo!ng !pstart@ he3d rather ta"e him o!t with for%e.
?hen I arri#ed at the demonstration, the streets were filled with men dressed in la%", the soon'to'e
legendary Mahdi ,rmy. It str!%" me that if Mahm!d lost his se%!rity g!ard :o at the soap fa%tory, he %o!ld
e one of them. &hat3s who al )adr3s foot soldiers are: the yo!ng men who ha#e een sh!t o!t of the
neo%ons3 grand plans for Ira$, who see no possiilities for wor", and whose neighorhoods ha#e seen none
of the promised re%onstr!%tion. Bremer has failed these yo!ng men, and e#erywhere that he has failed,
Mo$tada al )adr has %annily set o!t to s!%%eed. In )hia sl!ms from Baghdad to Basra, a networ" of )adr
5enters %oordinate a "ind of shadow re%onstr!%tion. 8!nded thro!gh donations, the %enters dispat%h
ele%tri%ians to fi; power and phone lines, organize lo%al garage %olle%tion, set !p emergen%y generators,
r!n lood dri#es, dire%t traffi% where the streetlights don3t wor". ,nd yes, they organize militias too. ,l
)adr too" Bremer3s e%onomi% %as!alties, dressed them in la%", and ga#e them r!sty <alashni"o#s. His
militiamen prote%ted the mos$!es and the state fa%tories when the o%%!pation a!thorities did not, !t in
some areas they also went f!rther, zealo!sly enfor%ing Islami% law y tor%hing li$!or stores and terrorizing
women witho!t the #eil. Indeed, the astronomi%al rise of the rand of religio!s f!ndamentalism that al )adr
represents is another "ind of lowa%" from Bremer3s sho%" therapy: if the re%onstr!%tion had pro#ided
:os, se%!rity, and ser#i%es to Ira$is, al )adr wo!ld ha#e een depri#ed of oth his mission and many of his
newfo!nd followers.
,t the same time as al )adr3s followers were sho!ting 6Bown with ,meri%a7 o!tside the >reen Zone,
something was happening in another part of the %o!ntry that wo!ld %hange e#erything. 8o!r ,meri%an
mer%enary soldiers were "illed in 5allu7ah, their %harred and dismemered odies h!ng li"e trophies o#er
the .!phrates. &he atta%"s wo!ld pro#e a de#astating low for the neo%ons, one from whi%h they wo!ld
ne#er re%o#er. ?ith these images, in#esting in Ira$ s!ddenly didn3t loo" anything li"e a %apitalist dream@ it
loo"ed li"e a ma%are nightmare made real.
&he day I left Baghdad was the worst yet. 8all!:ah was !nder siege and Brig. >en. <immitt was threatening
to 6destroy the al'Mahdi ,rmy.7 By the end, ro!ghly C,000 Ira$is were "illed in these twin %ampaigns. I
was dropped off at a se%!rity %he%"point se#eral miles from the airport, then loaded onto a !s :ammed
with contractors lugging hastil& pac)ed bags. ,ltho!gh no one was %alling it one, this was an e#a%!ation:
o#er the ne;t wee" /,D00 %ontra%tors left Ira$, and some go#ernments egan airlifting their %itizens o!t of
the %o!ntry. -n the !s no one spo"e@ we all :!st listened to the mortar fire, %raning o!r ne%"s to see the red
glow. , g!y %arrying a <=M> rief%ase de%ided to lighten things !p. 6)o is there !siness %lass on this
flightP7 he as"ed the silent !s. 8rom the a%", someody %alled o!t, 6(ot yet.7
Indeed, it may e $!ite a while efore !siness %lass tr!ly arri#es in Ira$. ?hen we landed in ,mman, we
learned that we had gotten o!t :!st in time. &hat morning three 4apanese %i#ilians were "idnapped and their
%aptors were threatening to !rn them ali#e. &wo days later Nicholas Berg went missing and was not seen
again !ntil the sn!ff film s!rfa%ed of his eheading, an e#en more terrifying message for *.). %ontra%tors
than the %harred odies in 8all!:ah. &hese were the start of a wa#e of "idnappings and "illings of
foreigners, most of them !sinesspeople, from a rainow of nations: )o!th <orea, Italy, 5hina, (epal,
=a"istan, the =hilippines, &!r"ey. B& the end of Bune more than ninet& contractors !ere reported dead
in Iraq. ?hen se#en &!r"ish %ontra%tors were "idnapped in 4!ne, their %aptors as"ed the 6%ompany to
%an%el all %ontra%ts and p!ll o!t employees from Ira$.7 Many ins!ran%e %ompanies stopped selling life
ins!ran%e to %ontra%tors, and others egan to %harge premi!ms as high as S/0,000 a wee" for a single
?estern e;e%!ti#e'the same pri%e some ins!rgents reportedly pay for a dead ,meri%an.
8or their part, the organizers of BBR, the histori% Baghdad trade fair, de%ided to relo%ate to the lo#ely
to!rist %ity of Biyara"ir in &!r"ey, 6:!st CD0 "m from the Ira$i order.7 ,n Ira$i lands%ape, only witho!t
those frightening Ira$is. &hree wee"s later :!st fifteen people showed !p for a 5ommer%e Bepartment
%onferen%e in +ansing, Mi%higan, on in#esting in Ira$. Its host, 2ep!li%an 5ongressman Mi"e 2ogers,
tried to reass!re his s"epti%al a!dien%e y saying that Ira$ is 6li"e a ro!gh neighorhood anywhere in
,meri%a.7 &he foreign in#estors, the ones who were offered e#ery imaginale free'mar"et enti%ement, are
%learly not %on#in%ed@ there is still no sign of them. <eith 5rane, a senior e%onomist at the 2and
5orporation who has wor"ed for the 5=,, p!t it l!ntly: 6I don3t elie#e the oard of a m!ltinational
%ompany %o!ld appro#e a ma:or in#estment in this en#ironment. If people are shooting at ea%h other, it3s
:!st diffi%!lt to do !siness.7 /amid Bassim Khamis, the manager of the largest soft'drin" ottling plant in
the region, told me he %an3t find any in#estors, e#en tho!gh he landed the e;%l!si#e rights to prod!%e =epsi
in %entral Ira$. 6, lot of people ha#e approa%hed !s to in#est in the fa%tory, !t people are really hesitating
now.7 <hamis said he %o!ldn3t lame them@ in fi#e months he has s!r#i#ed an attempted assassination, a
%ar:a%"ing, two oms planted at the entran%e of his fa%tory, and the "idnapping of his son.
Bespite ha#ing een granted the first li%ense for a foreign an" to operate in Ira$ in forty years, H)B5 still
hasn3t opened any ran%hes, a de%ision that may mean losing the %o#eted li%ense altogether. =ro%ter N
>amle has p!t its :oint #ent!re on hold, and so has >eneral Motors. &he *.). finan%ial a%"ers of the
)tarwood l!;!ry hotel and m!ltiple; ha#e gotten %old feet, and )iemens ,> has p!lled most staff from
Ira$. &he ell hasn3t r!ng yet at the Baghdad )to%" .;%hange'in fa%t yo! %an3t e#en !se %redit %ards in
Ira$3s %ash'only e%onomy. (ew Bridge )trategies, the %ompany that had g!shed a%" in -%toer ao!t how
6a ?al'Mart %o!ld ta"e o#er the %o!ntry,7 is so!nding distin%tly h!mled. 6M%Bonald3s is not opening
anytime soon,7 %ompany partner .d 2ogers told the ?ashington =ost. (either is ?al'Mart. &he 8inan%ial
&imes has de%lared Ira$ 6the most dangero!s pla%e in the world in whi%h to do !siness.7 It3s $!ite an
a%%omplishment: in trying to design the est pla%e in the world to do !siness, the neo%ons ha#e managed
to %reate the worst, the most elo$!ent indi%tment yet of the g!iding logi% ehind dereg!lated free mar"ets.
0he (iolence has not 7ust )ept in(estors outC it also forced Bremer% before he left% to abandon man& of
his central economic policies. =ri#atization of the state %ompanies is off the tale@ instead, se#eral of the
state %ompanies ha#e een offered !p for lease, !t only if the in#estor agrees not to lay off a single
employee. &ho!sands of the state wor"ers that Bremer fired ha#e een rehired, and signifi%ant raises ha#e
een handed o!t in the p!li% se%tor as a whole. =lans to do away with the food'ration program ha#e also
een s%rapped'it :!st doesn3t seem li"e a good time to deny millions of Ira$is the only n!trition on whi%h
they %an depend.
A A A
0he final blo! to the neocon dream came in the !ee)s before the hando(er. &he ?hite Ho!se and the
5=, were r!shing to get the *.(. )e%!rity 5o!n%il to pass a resol!tion endorsing their hando#er plan. &hey
had twisted arms to gi#e the top :o to former 5I, agent Iyad ,llawi, a mo#e that will ens!re that Ira$
e%omes, at the #ery least, the %oaling station for *.). troops that 4ay >arner originally en#isioned. B!t if
ma:or %orporate in#estors were going to %ome to Ira$ in the f!t!re, they wo!ld need a stronger g!arantee
that Bremer3s e%onomi% laws wo!ld sti%". &here was only one way of doing that: the )e%!rity 5o!n%il
resol!tion had to ratify the interim %onstit!tion, whi%h lo%"ed in Bremer3s laws for the d!ration of the
interim go#ernment. B!t al )istani on%e again o:e%ted, this time !ne$!i#o%ally, saying that the %onstit!tion
has een 6re:e%ted y the ma:ority of the Ira$i people.7 -n 4!ne L the )e%!rity 5o!n%il !nanimo!sly passed
a resol!tion that endorsed the hando#er plan !t made asol!tely no referen%e to the %onstit!tion. In the
fa%e of this far'rea%hing defeat, >eorge ?. B!sh %elerated the resol!tion as a histori% #i%tory, one that
%ame :!st in time for an ele%tion trail photo op at the >'L )!mmit in >eorgia.
?ith Bremer3s laws in limo, Ira$i ministers are already tal"ing openly ao!t rea"ing %ontra%ts signed y
the 5=,. 5itigro!p3s loan s%heme has een re:e%ted as a mis!se of Ira$3s oil re#en!es. Ira$3s
%omm!ni%ation minister is threatening to renegotiate %ontra%ts with the three %omm!ni%ations firms
pro#iding the %o!ntry with its disastro!sly poor %ell phone ser#i%e. ,nd the +eanese and *.). %ompanies
hired to r!n the state tele#ision networ" ha#e een informed that they %o!ld lose their li%enses e%a!se they
are not Ira$i. 6?e will see if we %an %hange the %ontra%t,7 Hamid al'<ifaey, spo"esperson for the
>o#erning 5o!n%il, said in May. 6&hey ha#e no idea ao!t Ira$.7 8or most in#estors, this %omplete la%" of
legal %ertainty simply ma"es Ira$ too great a ris".
But !hile the Iraqi resistance has managed to scare off the first !a(e of corporate raiders% there"s
little doubt that the& !ill return. ?hate#er form the ne;t Ira$i go#ernment ta"es'nationalist, Islamist, or
free mar"et'it will inherit a shattered nation with a %r!shing S/C0 illion det. &hen, as in all poor
countries around the !orld, men in dar" l!e s!its from the IM8 will appear at the door, earing loans
and promises of e%onomi% oom, pro#ided that %ertain str!%t!ral ad:!stments are made, whi%h will, of
%o!rse, e rather painf!l at first !t well worth the sa%rifi%e in the end. In fa%t, the pro%ess has already
eg!n: the IM8 is poised to appro#e loans worth SC.D ' SM.CD illion, pending agreement on the %onditions.
,fter an endless s!%%ession of %o!rageo!s last stands and far too many lost li#es, Ira$ will e%ome a poor
nation li"e any other, with politi%ians determined to introd!%e poli%ies re:e%ted y the #ast ma:ority of the
pop!lation, and all the imperfe%t %ompromises that will entail. &he free mar"et will no do!t %ome to Ira$,
!t the neo%onser#ati#e dream of transforming the %o!ntry into a free'mar"et !topia has already died, a
%as!alty of a greater dream'a se%ond term for >eorge ?. B!sh.
&he great histori%al irony of the %atastrophe !nfolding in Ira$ is that the sho%"'therapy reforms that were
s!pposed to %reate an e%onomi% oom that wo!ld re!ild the %o!ntry ha#e instead f!eled a resistan%e that
!ltimately made re%onstr!%tion impossile. Bremer3s reforms !nleashed for%es that the neo%ons neither
predi%ted nor %o!ld hope to %ontrol, from armed ins!rre%tions inside fa%tories to tens of tho!sands of
!nemployed yo!ng men arming themsel#es. &hese for%es ha#e transformed Year Zero in Ira$ into the
mirror opposite of what the neo%ons en#isioned: not a %orporate !topia !t a gho!lish dystopia, where
going to a simple !siness meeting %an get yo! lyn%hed, !rned ali#e, or eheaded. &hese dangers are so
great that in Ira$ gloal %apitalism has retreated, at least for now. 8or the neo%ons, this m!st e a sho%"ing
de#elopment: their ideologi%al elief in greed t!rns o!t to e stronger than greed itself.
Iraq !as to the neocons !hat .fghanistan !as to the 0aliban: the one pla%e on .arth where they %o!ld
for%e e#eryone to li#e y the most literal, !nyielding interpretation of their sa%red te;ts. -ne wo!ld thin"
that the loody res!lts of this e;periment wo!ld inspire a %risis of faith: in the %o!ntry where they had
asol!te free reign, where there was no lo%al go#ernment to lame, where e%onomi% reforms were
introd!%ed at their most sho%"ing and most perfe%t, they %reated, instead of a model free mar"et, a failed
state no right'thin"ing in#estor wo!ld to!%h. ,nd yet the >reen Zone neo%ons and their masters in
?ashington are no more li"ely to ree;amine their %ore eliefs than the &alian m!llahs were in%lined to
sear%h their so!ls when their Islami% state slid into a dea!%hed Hades of opi!m and se; sla#ery. ?hen
fa%ts threaten tr!e elie#ers, they simply %lose their eyes and pray harder.
?hi%h is pre%isely what &homas 8oley has een doing. &he former head of 6pri#ate se%tor de#elopment7
has left Ira$, a %o!ntry he had des%ried as 6the mother of all t!rnaro!nds,7 and has a%%epted another
t!rnaro!nd :o, as %o'%hair of >eorge B!sh3s reele%tion %ommittee in 5onne%ti%!t. -n ,pril G0 in
?ashington he addressed a %rowd of entreprene!rs ao!t !siness prospe%ts in Baghdad. It was a to!gh day
to e gi#ing an !peat spee%h: that morning the first photographs had appeared o!t of ,! >hrai,
in%l!ding one of a hooded prisoner with ele%tri%al wires atta%hed to his hands. &his was another "ind of
sho%" therapy, far more literal than the one 8oley had helped to administer, !t not entirely !n%onne%ted.
6?hate#er yo!3re seeing, it3s not as ad as it appears,7 8oley told the %rowd. 6Yo! :!st need to a%%ept that
on faith.7
,o!t the ,!thor
(aomi <lein is the a!thor of (o +ogo and writer/prod!%er of 0he 0a)e, a new do%!mentary on
,rgentina3s o%%!pied fa%tories.
(otes
=. &ofi$ did say that se#eral *.). %ompanies had e;pressed strong interest in !ying the state'owned
%ement fa%tories. &his s!pports a widely held elief in Ira$ that there is a delierate strategy to negle%t the
state firms so that they %an e sold more %heaply''a pra%ti%e "nown as Tstar#e then sell.T HBa%"I
2. It is in Basra where the %onne%tions etween e%onomi% reforms and the rise of the resistan%e was p!t in
star"est terms. In Be%emer the !nion representing oil wor"ers was negotiating with the -il Ministry for a
salary in%rease. >etting nowhere, the wor"ers offered the ministry a simple %hoi%e: in%rease their paltry
salaries or they wo!ld all :oin the armed resistan%e. &hey re%ei#ed a s!stantial raise.
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