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Last summer, in the lull of the August media doze, the Bush Administration's
doctrine of preventive war took a major leap forward. On August
5, 2004, the White House created the Office of the Coordinator for
Reconstruction and Stabilization, headed by former US Ambassador
to Ukraine Carlos Pascual. Its mandate is to draw up elaborate "post-conflict"
plans for up to twenty-five countries that are not, as of yet, in
conflict. According to Pascual, it will also be able to coordinate
three full-scale reconstruction operations in different countries
"at the same time," each lasting "five to seven years."
Fittingly, a government devoted to perpetual pre-emptive deconstruction
now has a standing office of perpetual pre-emptive reconstruction.
Gone are the days of waiting for wars to break out and then drawing
up ad hoc plans to pick up the pieces. In close cooperation with
the National Intelligence Council, Pascual's office keeps "high
risk" countries on a "watch list" and assembles rapid-response
teams ready to engage in prewar planning and to "mobilize and
deploy quickly" after a conflict has gone down. The teams are
made up of private companies, nongovernmental organizations and
members of think tanks -- some, Pascual told an audience at the
Center for Strategic and International Studies in October, will
have "pre-completed" contracts to rebuild countries that
are not yet broken. Doing this paperwork in advance could "cut
off three to six months in your response time."
The plans Pascual's teams have been drawing up in his little-known
office in the State Department are about changing "the very
social fabric of a nation," he told CSIS. The office's mandate
is not to rebuild any old states, you see, but to create "democratic
and market-oriented" ones. So, for instance (and he was just
pulling this example out of his hat, no doubt), his fast-acting
reconstructors might help sell off "state-owned enterprises
that created a nonviable economy." Sometimes rebuilding, he
explained, means "tearing apart the old."
Few ideologues can resist the allure of a blank slate -- that was
colonialism's seductive promise: "discovering" wide-open
new lands where utopia seemed possible. But colonialism is dead,
or so we are told; there are no new places to discover, no terra
nullius (there never was), no more blank pages on which, as Mao
once said, "the newest and most beautiful words can be written."
There is, however, plenty of destruction -- countries smashed to
rubble, whether by so-called Acts of God or by Acts of Bush (on
orders from God). And where there is destruction there is reconstruction,
a chance to grab hold of "the terrible barrenness," as
a UN official recently described the devastation in Aceh, and fill
it with the most perfect, beautiful plans.
"We used to have vulgar colonialism," says Shalmali Guttal,
a Bangalore-based researcher with Focus on the Global South. "Now
we have sophisticated colonialism, and they call it 'reconstruction.'"
It certainly seems that ever-larger portions of the globe are under
active reconstruction: being rebuilt by a parallel government made
up of a familiar cast of for-profit consulting firms, engineering
companies, mega-NGOs, government and UN aid agencies and international
financial institutions. And from the people living in these reconstruction
sites -- Iraq to Aceh, Afghanistan to Haiti -- a similar chorus
of complaints can be heard. The work is far too slow, if it is happening
at all. Foreign consultants live high on cost-plus expense accounts
and thousand-dollar-a-day salaries, while locals are shut out of
much-needed jobs, training and decision-making. Expert "democracy
builders" lecture governments on the importance of transparency
and "good governance," yet most contractors and NGOs refuse
to open their books to those same governments, let alone give them
control over how their aid money is spent.
Three months after the tsunami hit Aceh, the New York Times
ran a distressing story reporting that "almost nothing seems
to have been done to begin repairs and rebuilding." The dispatch
could easily have come from Iraq, where, as the Los Angeles Times
just reported, all of Bechtel's allegedly rebuilt water plants have
started to break down, one more in an endless litany of reconstruction
screw-ups. It could also have come from Afghanistan, where President
Hamid Karzai recently blasted "corrupt, wasteful and unaccountable"
foreign contractors for "squandering the precious resources
that Afghanistan received in aid." Or from Sri Lanka, where
600,000 people who lost their homes in the tsunami are still languishing
in temporary camps. One hundred days after the giant waves hit,
Herman Kumara, head of the National Fisheries Solidarity Movement
in Negombo, Sri Lanka, sent out a desperate e-mail to colleagues
around the world. "The funds received for the benefit of the
victims are directed to the benefit of the privileged few, not to
the real victims," he wrote. "Our voices are not heard
and not allowed to be voiced."
But if the reconstruction industry is stunningly inept at rebuilding,
that may be because rebuilding is not its primary purpose. According
to Guttal, "It's not reconstruction at all -- it's about reshaping
everything." If anything, the stories of corruption and incompetence
serve to mask this deeper scandal: the rise of a predatory form
of disaster capitalism that uses the desperation and fear created
by catastrophe to engage in radical social and economic engineering.
And on this front, the reconstruction industry works so quickly
and efficiently that the privatizations and land grabs are usually
locked in before the local population knows what hit them. Kumara,
in another e-mail, warns that Sri Lanka is now facing "a second
tsunami of corporate globalization and militarization," potentially
even more devastating than the first. "We see this as a plan
of action amidst the tsunami crisis to hand over the sea and the
coast to foreign corporations and tourism, with military assistance
from the US Marines."
As Deputy Defense Secretary, Paul Wolfowitz designed and oversaw
a strikingly similar project in Iraq: The fires were still burning
in Baghdad when US occupation officials rewrote the investment laws
and announced that the country's state-owned companies would be
privatized. Some have pointed to this track record to argue that
Wolfowitz is unfit to lead the World Bank; in fact, nothing could
have prepared him better for his new job. In Iraq, Wolfowitz was
just doing what the World Bank is already doing in virtually every
war-torn and disaster-struck country in the world -- albeit with
fewer bureaucratic niceties and more ideological bravado.
"Post-conflict" countries now receive 20-25 percent of
the World Bank's total lending, up from 16 percent in 1998 -- itself
an 800 percent increase since 1980, according to a Congressional
Research Service study. Rapid response to wars and natural disasters
has traditionally been the domain of United Nations agencies, which
worked with NGOs to provide emergency aid, build temporary housing
and the like. But now reconstruction work has been revealed as a
tremendously lucrative industry, too important to be left to the
do-gooders at the UN. So today it is the World Bank, already devoted
to the principle of poverty-alleviation through profit-making, that
leads the charge.
And there is no doubt that there are profits to be made in the reconstruction
business. There are massive engineering and supplies contracts ($10
billion to Halliburton in Iraq and Afghanistan alone); "democracy
building" has exploded into a $2 billion industry; and times
have never been better for public-sector consultants -- the private
firms that advise governments on selling off their assets, often
running government services themselves as subcontractors. (Bearing
Point, the favored of these firms in the United States, reported
that the revenues for its "public services" division "had
quadrupled in just five years," and the profits are huge: $342
million in 2002 -- a profit margin of 35 percent.)
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But shattered countries are attractive to the World Bank for another
reason: They take orders well. After a cataclysmic event, governments
will usually do whatever it takes to get aid dollars -- even if
it means racking up huge debts and agreeing to sweeping policy reforms.
And with the local population struggling to find shelter and food,
political organizing against privatization can seem like an unimaginable
luxury.
Even better from the bank's perspective, many war-ravaged countries
are in states of "limited sovereignty": They are considered
too unstable and unskilled to manage the aid money pouring in, so
it is often put in a trust fund managed by the World Bank. This
is the case in East Timor, where the bank doles out money to the
government as long as it shows it is spending responsibly. Apparently,
this means slashing public-sector jobs (Timor's government is half
the size it was under Indonesian occupation) but lavishing aid money
on foreign consultants the bank insists the government hire (researcher
Ben Moxham writes, "In one government department, a single
international consultant earns in one month the same as his twenty
Timorese colleagues earn together in an entire year").
In Afghanistan, where the World Bank also administers the country's
aid through a trust fund, it has already managed to privatize healthcare
by refusing to give funds to the Ministry of Health to build hospitals.
Instead it funnels money directly to NGOs, which are running their
own private health clinics on three-year contracts. It has also
mandated "an increased role for the private sector" in
the water system, telecommunications, oil, gas and mining and directed
the government to "withdraw" from the electricity sector
and leave it to "foreign private investors." These profound
transformations of Afghan society were never debated or reported
on, because few outside the bank know they took place: The changes
were buried deep in a "technical annex" attached to a
grant providing "emergency" aid to Afghanistan's war-torn
infrastructure -- two years before the country had an elected government.
It has been much the same story in Haiti, following the ouster of
President Jean-Bertrand Aristide. In exchange for a $61 million
loan, the bank is requiring "public-private partnership and
governance in the education and health sectors," according
to bank documents -- i.e., private companies running schools and
hospitals. Roger Noriega, US Assistant Secretary of State for Western
Hemisphere Affairs, has made it clear that the Bush Administration
shares these goals. "We will also encourage the government
of Haiti to move forward, at the appropriate time, with restructuring
and privatization of some public sector enterprises," he told
the American Enterprise Institute on April 14, 2004.
These are extraordinarily controversial plans in a country with
a powerful socialist base, and the bank admits that this is precisely
why it is pushing them now, with Haiti under what approaches military
rule. "The Transitional Government provide[s] a window of opportunity
for implementing economic governance reforms ... that may be hard
for a future government to undo," the bank notes in its Economic
Governance Reform Operation Project agreement. For Haitians, this
is a particularly bitter irony: Many blame multilateral institutions,
including the World Bank, for deepening the political crisis that
led to Aristide's ouster by withholding hundreds of millions in
promised loans. At the time, the Inter-American Development Bank,
under pressure from the State Department, claimed Haiti was insufficiently
democratic to receive the money, pointing to minor irregularities
in a legislative election. But now that Aristide is out, the World
Bank is openly celebrating the perks of operating in a democracy-free
zone.
The World Bank and the International Monetary Fund have been imposing
shock therapy on countries in various states of shock for at least
three decades, most notably after Latin America's military coups
and the collapse of the Soviet Union. Yet many observers say that
today's disaster capitalism really hit its stride with Hurricane
Mitch. For a week in October 1998, Mitch parked itself over Central
America, swallowing villages whole and killing more than 9,000.
Already impoverished countries were desperate for reconstruction
aid -- and it came, but with strings attached. In the two months
after Mitch struck, with the country still knee-deep in rubble,
corpses and mud, the Honduran congress initiated what the Financial
Times called "speed sell-offs after the storm." It
passed laws allowing the privatization of airports, seaports and
highways and fast-tracked plans to privatize the state telephone
company, the national electric company and parts of the water sector.
It overturned land-reform laws and made it easier for foreigners
to buy and sell property. It was much the same in neighboring countries:
In the same two months, Guatemala announced plans to sell off its
phone system, and Nicaragua did likewise, along with its electric
company and its petroleum sector.
All of the privatization plans were pushed aggressively by the usual
suspects. According to the Wall Street Journal, "the
World Bank and International Monetary Fund had thrown their weight
behind the [telecom] sale, making it a condition for release of
roughly $47 million in aid annually over three years and linking
it to about $4.4 billion in foreign-debt relief for Nicaragua."
Now the bank is using the December 26 tsunami to push through its
cookie-cutter policies. The most devastated countries have seen
almost no debt relief, and most of the World Bank's emergency aid
has come in the form of loans, not grants. Rather than emphasizing
the need to help the small fishing communities -- more than 80 percent
of the wave's victims -- the bank is pushing for expansion of the
tourism sector and industrial fish farms. As for the damaged public
infrastructure, like roads and schools, bank documents recognize
that rebuilding them "may strain public finances" and
suggest that governments consider privatization (yes, they have
only one idea). "For certain investments," notes the bank's
tsunami-response plan, "it may be appropriate to utilize private
financing."
As in other reconstruction sites, from Haiti to Iraq, tsunami relief
has little to do with recovering what was lost. Although hotels
and industry have already started reconstructing on the coast, in
Sri Lanka, Thailand, Indonesia and India, governments have passed
laws preventing families from rebuilding their oceanfront homes.
Hundreds of thousands of people are being forcibly relocated inland,
to military style barracks in Aceh and prefab concrete boxes in
Thailand. The coast is not being rebuilt as it was -- dotted with
fishing villages and beaches strewn with handmade nets. Instead,
governments, corporations and foreign donors are teaming up to rebuild
it as they would like it to be: the beaches as playgrounds for tourists,
the oceans as watery mines for corporate fishing fleets, both serviced
by privatized airports and highways built on borrowed money.
In January Condoleezza Rice sparked a small controversy by describing
the tsunami as "a wonderful opportunity" that "has
paid great dividends for us." Many were horrified at the idea
of treating a massive human tragedy as a chance to seek advantage.
But, if anything, Rice was understating the case. A group calling
itself Thailand Tsunami Survivors and Supporters says that for "businessmen-politicians,
the tsunami was the answer to their prayers, since it literally
wiped these coastal areas clean of the communities which had previously
stood in the way of their plans for resorts, hotels, casinos and
shrimp farms. To them, all these coastal areas are now open land!"
Disaster, it seems, is the new terra nullius.
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