Plans for early privatization of Iraqi companies
The Financial Times reports that an occupational official has said that the privatization of Iraqi companies may begin within one year and need not wait until a real, non-stooge government is in place.
Previously the US-led coalition had said it would wait until the creation of an elected government, in a year or two, before beginning privatisation. Now both Iraqi ministry technocrats and coalition officials think the need for foreign investment in the economy is too great to delay, Mr Carney [the occupational authority official] told the FT.

An official involved in the talks said foreign participation would almost certainly be allowed, but particulars such as percentages available to foreigners were still being worked out.
Carney added that officials were looking at ways to give priority to Iraqis, "who risk being cut out because of a lack of capital".

At this point, one would do well to remember what happened in Russia when American financial wizards became involved with the privatization of old Soviet industries. Living standards plummeted, companies were sold for a fraction of their value, and cronyism of a scale that makes Enron look like the Better Business Bureau's poster boy was the order of the day. Although it would be difficult for Iraqi living standards to drop any further, it does not bode well for the future.

Also, the article's assertion that "mainstream Iraqi political leaders broadly favour privatisation" is certainly dodgy. The only "political leader" they quoted was from the formerly exile Iraqi National Accord. Perhaps Iraqi politicians who would be mainstream in the US or Britain favor it, but it's hard to imagine SCIRI or the Communist Party in favor of something like this.

Prediction: a feeding frenzy that will screw ordinary Iraqis, as privatized companies mercilessly fire workers to increase profitability. Further prediction: Iraqis will not be happy about this.

(Link courtesy The Agonist.)

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