The USA is widely considered the world's only superpower. Unsurprisingly, the US does not seem to be keen to give up this position which allows its agents to operate above international law, create more pollution (in the name of capital gain) and ensures that its people enjoy a higher standard of living than those of any other country. In an environment where the confidence of investors can cure or curse an economy within a day, military control of economic factors becomes more likely.
The real threat in the September 11 attacks was not to people, but to the global finance system. Wall Street was closed for a week, interest rates were reduced and Europe quickly moved to support the dollar out of a fear that the whole global edifice would collapse along with the dollar. However, despite these measures, confidence was shaky and the dollar continued to fall. That is, until the beginning of hostilities in Afghanistan on 7th October. This war re-affirmed the domination of US economic and military power, and gained the US access to valuable resources, such as oil.
1. The US economy had been severely shaken by the discovery of fraudulent accounting in a number of huge companies like Enron. With failing confidence came a fall in the value of the dollar as investors abandoned the shamed energy sector. The war not only reversed this trend, but allowed the US to profit from Iraq´s oil reserves. Christian Aid discovered that out of the $5 billion dollars collected (from pre and post war oil revenues and invested assets) only around $1 billion dollars could be accounted for. The missing $4 billion was found (following an investigation by Christian Aid) in the federal reserve! This is in direct violation of the UN resolution which stipulated that an International Advisory and Monitoring Board must be set up to account for the money.
2. Halliburton (formerly run by US vice president Dick Cheney - one subsidiary Kellogg), reported soaring revenues from its contracts to help rebuild Iraq. Sales in the third quarter of 2003 were 39% higher at $4.1bn (£2.5bn), and profits grew fourfold to $49m, of which $34m was Iraq business. Halliburton did not have to make a single competitive pitch to earn these profits. It has already secured further business worth $1.4bn in a separate, competitively bid contract to provide support services to troops. Halliburton is charging the army $1.59 a gallon for its oil, but critics say it can be bought from neighbouring countries for as little as 98 cents. Cheney received a $33m payoff when he left Halliburton in 2000, and still gets $180,000 a year in deferred income. The company has also donated $708,770 in the period 1999 - 2002 to US political interests, of which 95 percent went to Republicans. President Bush himself received $17,677. No conflict of interests there then!
3. Boeing, the world´s largest plane maker, and defence contractor Northrop Grumman also enjoyed a war dividend. Boeing raised its revenue guidance for the full year as military systems and aircraft offset the weakness in commercial jets. Northrop, maker of the B-2 stealth bomber, turned a $59m loss in 2002 into a $184m profit in 2003.
4. Bechtel Group Inc. USAID awarded the largest of its postwar Iraq contracts to Bechtel Group Inc. April 17. The capital construction contract gives Bechtel an initial award of $34.6 million (with further funding of up to $680 million over 18 months - subject to Congress´ approval) to rebuild power generation facilities, electrical grids, water and sewage systems and airport facilities in Iraq. Former Secretary of State George Shultz, is an ex-president of the company and is on the company's board of directors, and USAID Administrator Andrew Natsios (who oversees the bidding process for post-war contracts), used to run the "Big Dig" construction project, for which Bechtel was the primary contractor. The company has donated $1,303,765 (59 percent to Republicans; 41 percent to Democrats) with personal donations for President Bush totalling $6,250
Clearly US companies have found themselves in the position to make millions of dollar in profit from the "war on terror". This has two important results.
The Iraqi economy is not being rebuilt - the infrastructure is. The people of Iraq are not employed by these US companies, the profits do not stay in Iraq, and as a result the Iraqis become more dependant on aid from the West.
The cost of the work is inflated by the involvement of greedy companies. Contracts are largely on a "cost-plus" basis that reimburse them for their expenses while also awarding fees and bonuses.
-the (no-bid) contract granted to Kellogg Brown & Root for oilfield reconstruction in Iraq is worth $1.4 billion with potential to grow to $7 billion. It carries a flat fee of 2 percent, plus performance bonuses of up to 5 percent. 2% of 1.4 billion is $28 million!
-U.S. Army commanders seeking to rebuild a local cement plant were told by the U.S. Army Corps of Engineers that the job would cost $15.1 million. Instead, the Army commanders turned to local Iraqis, who got the job done for $80,000!