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Selective Memory
Saddam's Debts and US Exceptionalism
Michael Youlton • 27 December 2003

Last week, after the capture of Saddam Hussein, I noted that the Bush Administration, and its echoes in Europe, in their glorious zeal to prosecute Saddam's crimes against humanity, were being more than a little hypocritical -- given that they continue to actively resist efforts to prosecute dictators and war criminals the various US Administrations have favoured in the past. From Chile's Augusto Pinochet to Rios Montt in Guatemala, they reside in luxurious retirement in certain gated communities in South Florida, living off their spoils. They’re certainly far removed from any spider holes or worries of execution. And, of course, their American handlers are not only safe from prosecution -- many such handlers used their past crimes as Curriculum Vitae builders for their current high-level Bush Administration positions.

This strategy is present in virtually every facet of U.S. foreign policy. It has even developed its own name: American exceptionalism. Do as we say, not as we do.

Last week, we saw it applied to the fate of tyrants captured long after they commit mass murder. Now, we're seeing the economic corollary.

The occasion is the fallout from former Secretary of State James Baker's trip through the financial capitals of Europe, asking the creditors of Britain and France, Germany and Russia to forgive Iraq its massive $120 billion foreign debt incurred under the reign of Saddam Hussein. The Bush Administration's rationale is seductive in its sensibility: the money went for the private use of Saddam's circles to enrich themselves and strengthen their grip on power. The money wasn't spent on or by the Iraqi people or their legitimately selected government. Therefore, a genuinely legitimate government shouldn't have to be responsible for the bill.

Somewhat astonishingly, our EU partners seems to be buying it. Literally. Both France and Germany have already agreed to let go part of their shares of the debt, with more likely to come, and Russia may well follow suit. In terms of the Bush Administration's fiscal management of Iraq, this is far better news than it had a right to hope for, especially given that it had just told many of these same countries that their firms would be shut out of Iraq's U.S. taxpayer-funded reconstruction gold rush.

As a precedent, this is wonderful news, and not just because of the idea that a klepto-cracy's thefts should not be charged to its more legitimate successors. Set aside the reality that the U.S. helped put Saddam into power in the first place, or that its current administration of Iraq is even less legitimate than Saddam's ascension was in the eyes of international law. In fact, the last time a country other than the U.S. simply invaded a foreign country and took over its government, it was -- Saddam, actually, in Kuwait. Who says conservatives hate moral relativism?

But the matter of debt retirement and U.S. exceptionalism runs far, far deeper than America's history with Saddam. By virtue of its wealth, the U.S. calls most of the shots for international lending and credit, particularly through its voting control of the boards of the World Bank and International Monetary Fund.

The IMF, World Bank, and a bipartisan succession of U.S. administrations have long insisted on honouring the past debts of illegitimate governments the U.S. helped keep in power. These debts, especially the ones originally incurred in the '60s and '70s, were often originally of astonishing sums of money at high interest rates for dubious purposes. Three and four decades later, any number of countries in the global South now pay up to or even more than half of their national budgets servicing the interest -- not even the principle -- on these debts.

They include countries like Argentina, which has on several occasions teetered on the brink of default and whose IMF-assisted economy is, as a result, in ruins; its original debts were incurred, with American encouragement, by Argentine generals financing their "dirty war" of the mid-late '70s and up through their ill-fated invasion of the Malvinas in 1982. Over that period, at least 30,000 Argentinians were "disappeared" while the generals bought expensive war toys and enriched themselves. America still insists the debt be paid.

Ditto the Philippines, where ordinary Filipinos are still paying the interest on money that went into prisons, purges, Ferdinand Marcos' Swiss bank accounts, and Imelda Marcos’ shoes. Remember the massive security apparatus -- including the illegal nuclear (WMD) programme -- of apartheid South Africa? Or the kleptocracies of any number of post-colonial dictatorships; the generals in Brazil, Noriega in Panama, Suharto in Indonesia, the whole bloody lot of them in Pakistan, including Musharraf. In every case, banks in New York and London and Paris and Tokyo and bureaucrats in Washington now effectively control national economies of countries they probably can't find on a map. And in each case, America doesn't want the debt forgiven.

This is not a minor issue. For a generation, foreign debt has been the primary lever by which wealthy creditors have forced social programmes to be gutted, public services to be de-nationalised, i.e privatised, natural resources to be plundered, national wealth to be shipped ever northward, the poor to get much poorer, and the rich to get much much richer. Thirty years ago, economists and politicians talked of "developing" poorer countries to bring them up to the living standards of wealthier countries. Nobody talks about that any longer. We’re back to Andre Gunder Frank, Samir Amin and underdevelopment.

Amidst all the closed-bid contracts and Halliburton price gouging, it's barely been noticed that in Iraq, this sort of economic looting has already taken place over the past eight months. The Bush Administration has privatised Iraq's state resources to an extent never before seen in any poor country. Bush can safely offer Iraq the prospect of "self-rule" next summer not only because the participating Iraqis will all be hand-picked by Washington, but because all the important policy decisions and most of the wealth has already been safely removed to the offices of Halliburton, Bechtel, big oil, and the like.

The common thread here is not a new U.S. ideological commitment to the forgiveness of the debts of dictators; it's a commitment, as ever, to enriching the Bush White House's friends.

The problem is that the war crimes of Saddam and the economic crimes of his, or any, dictatorship are linked by more than the commonality of American exceptionalism. In country after country, as you read this, HIV-infected people die for lack of a public health care system; starvation and disease stalk economies with pandemic joblessness; and, of course, the small arms bought with all that debt wind up in the hands of militaries, paramilitaries, and death squads that are all too happy to use them on whomever.

Debt kills, as surely as Saddam or his ilk ever have. The death toll, in fact, is far higher -- tens of millions in Africa alone.

The United States cannot, with any credibility, call for the trial of Saddam Hussein while it still protects people like Montt or Pinochet. Similarly, America cannot, with any credibility, seek retirement of Saddam's debts while U.S. banks are still cashing, every month, desperate payments on the debts of dozens of other past national thieves.

In both cases, Bush Administration officials would love to present their Iraq policies as moral, enlightened, and compassionate. In both cases, they'll have to keep washing their hands a lot more to get all the blood off.



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The Blanket - A Journal of Protest & Dissent



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