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Surprise: "Iraq" to Allow Massive Privatization of Industry

What a shocker... the new "Iraqi" government has invited global capital to loot its utitlities and industry.
September 21, 2003
Iraq to Allow Foreign Owners Outside Oil

By REUTERS

Filed at 3:36 a.m. ET

DUBAI (Reuters) - Iraq was set to unveil on Sunday sweeping economic reforms that include giving foreign investors full access to all sectors of the economy except oil after three decades of almost total state control.

A statement by U.S.-backed Finance Minister Kamel al-Keylani scheduled for release in Dubai later on Sunday said the reforms ``will be implemented in the near future.''

``The reforms will significantly advance efforts to build a free and open market economy in Iraq, promote Iraq's future economic growth (and) accelerate Iraq's re-entry into the international economy,'' Keylani's statement said.

A senior U.S. official involved in oil-rich Iraq's reconstruction said the new proposals were agreed upon on Saturday and were now effectively the law of the land.

The list of steps to liberalize foreign investment, the banking sector and the tax and tariff code reads like a recipe devised by Washington for a free-market Iraq.

The changes would end about 30 years of state economic domination under Saddam Hussein and the socialist Baath Party.

The reforms include allowing foreign banks to buy local financial institutions, a free transfer of foreign exchange earnings and full independence for the central bank.

Joe Saba, the World Bank country director for Iraq, told Reuters the proposals were ``significant steps'' in opening up Iraq to much-needed investment and financial intermediation.

``The overall arrangements for the financial sector are particularly welcome as...a fundamental building block for building a sound market economy,'' Saba said.

homepage: homepage: http://www.nytimes.com/reuters/business/business-group-iraq.html?pagewanted=print&position=

financials 21.Sep.2003 07:47

hyperintern

"allowing foreign banks to buy local financial institutions, a free transfer of foreign exchange earnings and full independence for the central bank."

These efforts sound good for starting out. These finance elements probably were not there when Hussein had power. What else?

new update to story 21.Sep.2003 07:54

hyperintern

 http://www.nytimes.com/reuters/business/business-group-iraq.html?pagewanted=print&position=


Iraq to Allow Full Foreign Ownership Outside Oil
By REUTERS

Filed at 7:06 a.m. ET

DUBAI (Reuters) - U.S.-controlled Iraq Sunday unveiled sweeping reforms allowing foreign investors into all sectors except oil, ending 30 years of state economic control.

Iraqi Finance Minister Kamel al-Keylani said Sunday the reforms would ``significantly advance efforts to build a free and open market economy in Iraq,'' spur economic growth and speed Iraq's re-entry into the international community.

The list of reforms for liberalizing foreign investment, the banking sector and taxes and tariffs read like a recipe devised by Washington for a capitalist Iraq.

``Iraq needs jobs, it needs to have growth,'' a senior U.S. official involved in Iraq's reconstruction said.

THE LAW OF THE LAND

``This isn't just a proposal -- this is the law, this is done. This was all signed yesterday,'' the U.S. official said.

Keylani said the reforms would be implemented soon.

The surprisingly broad measures, which end an era of economic domination under Saddam Hussein and the socialist Baath Party, were aimed at improving global opinion before a donors' conference in Madrid next month.

Washington's invasion of Iraq in the face of worldwide opposition raised hackles in Europe and concern in Iraq and the Arab world that it sought control of Iraq's oil and resources.

However, the reforms include 100 percent foreign ownership in all sectors except natural resources, excluding current outside participation in Iraq's coveted oil reserves, the second-largest behind those of Saudi Arabia.

``The fact that they ban investment in oil resources is good because it sends the message that America was not only after Iraq's oil,'' an Arab finance minister who declined to be identified said of the steps.

Keylani and a big delegation of Iraqi and Coalition Provisional Authority (CPA) officials are in Dubai to discuss an assessment of Iraq's needs to be presented to donors in Madrid.

Paul Bremer, U.S.-appointed administrator of Iraq, was not present because he was in Washington, a CPA official said. His absence surprised some delegates who had expected him to outline U.S. policy to possible donor nations.

``SIGNIFICANT STEPS''

Joe Saba, World Bank country director for Iraq, called the steps ``significant.''

Iraq's reconstruction has been hampered by lawlessness five months after Saddam's fall and its people are struggling to cope with daily life.

Saba said Iraq's U.S.-backed Governing Council had supported the measures, an endorsement the CPA has said is essential to attract foreign investors.

A senior Arab official said: ``If (the package) is legal and it stands, then it would be excellent but the proof is in the pudding if investors trust it enough to come.''

The U.S. official noted the open-ended foreign investment proposals did not require any screening process -- something he said the Iraqis had requested -- which would make investment there more alluring to foreigners.

``There is no screening committee. There is no way for a sort of niggling process to grab hold of your ankle and chew on it,'' he said.

Foreign investors cannot own real estate but can lease property for 40 years under the new rules.

``You can make money in a country like Iraq,'' the U.S. official said. ``You don't have to have everything be perfect to make money.''

The reforms also include a free transfer of foreign exchange earnings for investors, full central bank independence and relatively free entry for foreign banks into Iraq.

New bank rules were signed in Iraq Saturday, the U.S. official said. Six foreign banks will get ``fast-track'' entry into Iraq and full ownership of local banks within five years.

``We are going to have a separate and early ... process to select two of those banks. And we are going to ask those banks to do substantial lending early,'' he said.

Other foreign banks would be allowed 50 percent stakes in local banks.

The new laws also slash top marginal tax rates for individuals and corporations to 15 percent from a prior 45 percent, the U.S. official said.

Iraq will also slap a five percent surcharge on all imports except for humanitarian goods like food, medicine and books. The CPA had earlier declared a tariff-free, open-border regime in Iraq that was to last to the end of 2003.

obvious problem w/ "liberalization" 21.Sep.2003 08:01

foobar

"Joe Saba, the World Bank country director for Iraq, told Reuters the proposals were ``significant steps'' in opening up Iraq to much-needed investment and financial intermediation."

At first it probably sounds great, the idea of foreign organizations investing in your little third world country, but if you think about it, the only reason any of these foreign organizations (corporations and financial institutions) are putting money into the country is because they expect (and likely will) their small investment will allow them to draw much greater amounts of money out of the country later. "You have to spend money to make money." Since they will be eventually taking more $$ out than they are putting in, it is in the best interest of the people of Iraq - or any 3rd world country - to say no to that.

excellent article; THE CORPORATE INVASION OF IRAQ 21.Sep.2003 09:25

GRINGO STARS


Thieves 22.Sep.2003 07:27

Rasa

How can a council not democratically appointed by the Iraqi people have the legal right to make such a decision? How would Bush feel if I occupied the USA and then sold all of it to rich Saudis and Iranians? Free market it's good for you...
Bull shit