[stop-imf] IMF in Iraq: The Second Invasion

[robert weissman]

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        IMF in Iraq: The Second Invasion


        Karen Button

May 20, 2006

/"IMF...
Takes away everything it can get
Always making certain that there's one thing left
Keep them on the hook with insupportable debt
And they call it democracy"/

- Bruce Cockburn, singer/songwriter
Call it Democracy, 1985

Last December the US-backed Iraqi government agreed to a $685 million
loan from the International Monetary Fund, and effectively sold their
country down the river called economic slavery=97the master being the Free
Market Economy.

They will have a lot of company. Many of the world=92s so-called third
world and developing nations are already on that river, barely afloat.
Most of Latin America has been under the thumb of the IMF=92s brutal
austerity programs for decades, though certain countries, most notably
Venezuela and Bolivia, who are nationalizing their resources, are
testament to the pervasive undercurrent of socialist ideals.

For Iraq though, the journey has just begun.

That $685 million loan came with a heavy price tag: end oil subsidies
and open Iraq=92s economy to the free market. In other words, dismantle
any form of socialised society and make it a commodity.

Just days after Iraq=92s constitutional election gave oil companies their
first taste of Iraqi crude by requiring all unexplored fields be open to
the highest bidder, Prime Minister Al-Jaafari implemented the first of
the IMF policies, cutting fuel subsidies. Nearly overnight fuel prices
rose nine-fold. Now, five months later, a canister of gas costs about
$14 USD in a country where the average monthly income is maybe $200 USD.

Defending the cuts, IMF representative Bill Murray told the Cox News
Service that Iraq had to "come up with budgetary resources to finance
health care, education and other important public services". He failed
to mention that Iraq once provided free health care to 93 per cent of
its population with its oil revenues and also had the highest literacy
rate in the Middle East.

Now, even though the Ministry of Labor and Social Affairs reported in
January that poverty among Iraqis had risen by 30 per cent since the
US-led invasion, the government is bravely marching toward the free market.

At the end of March, the Ministry of Trade, largely responsible for food
distribution, announced that it would cancel several items from the
long-instituted food ration program. According to figures from the trade
ministry itself, nearly 26.5 (or 96 per cent) of Iraq=92s 28 million
people are dependent on the monthly ration.

During Saddam Hussein=92s reign, 12 items were included in the rations.
That=92s now been cut to four essential items, including sugar, rice,
flour and cooking oil.

The ministry is expecting to cut rations altogether, perhaps by the end
of the year, according to the Ra'ad Hamza, a senior trade ministry
official. "If you keep Iraq under socialist laws, the economy won't
improve," he said to the Integrated Regional Information Networks. "But
we'll continue to provide the population with essential items at least
until the end of the current year,"

Inflation, which has skyrocketed since the invasion, can be expected to
continue unchecked with the IMF policies in place.

Baghdad University economist Omar Abdel Kareem, quoted by IRIN, stated,
"Before this decision, prices on items such as vegetables and grains had
already doubled in January. Since then, they've increased more than 20
percent a week."

With the elimination of some rations, the price of certain products has
risen by as much as 300 per cent. "In 2002 lentil beans were sold for
about US $0.50 per kilogramme. Since then, the retail price has jumped
to around US $2 per kilogramme."

With half of Iraq=92s population under the age of 18, it will be the
children who bear the brunt of these tried and failed IMF policies.

UNICEF reported earlier this month that 25 per cent of children in Iraq
are now malnourished and underweight; a March 2005 report found that
malnutrition had doubled since the US-led invasion. Expect those numbers
to rise alongside the inflation rate.

But Mr. Murray is not looking at those indices; he will note, instead,
that Iraq=92s economy has grown by 10 per cent. By IMF standards, that=92s
success. The poverty, malnutrition, and inflation don=92t count.

And they call it democracy.


*:: * /Article nr. 23410 sent on 21-may-2006 02:33 ECT/
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