Neo-Colonialism

On August 5, 2004, the White House created in the State Department the Office of the Coordinator for Reconstruction and Stabilization -- to balance the U.S. policy of de-construction. Its mandate is to draw up elaborate “post conflict” plans for up to 25 countries that are not, as yet, in conflict. There will be “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,” said Carlos Pascual the head of the new agency in a speech at the Center for Strategic and International Studies. Sounds like the Halliburton contracts in Iraq.

His office is about changing “the very social fabric of a nation,” he said. The office’s mandate is not to rebuild any old states, but to create “democratic and market-oriented” ones. The fast-acting reconstructors will help sell off “state-owned enterprises that created a nonviable economy.” Sometimes rebuilding, Pascual explained, means “tearing apart the old.”

“We used to have vulgar colonialism,” said Shalmali Guttal, a Bangalore-based researcher with Focus on the Global South. “Now we have sophisticated colonialism, and they call it ‘reconstruction.’”

I experienced it first hand celebrating New Year’s Eve 2003, in Phnom Penh, Cambodia. There I was on a five day bar and party hoping year end celebration that blended the best of all cultures and religions with hundreds of NGO directors, officers, U.N. aid agency employees, consulting engineers and bankers. All foreigners, as very few locals are employed. 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. I also saw the same happen in Mongolia when it established diplomatic relations with the U.S. in the early 90s. There I partied with ladies who were second generation employees of the U.N. Nepotism at its finest.

The story repeats itself in every country being rebuilt. It could also have come from Afghanistan, where President Hamid Karzai 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, were still languishing in temporary camps for several months. “The funds received for the victims are directed to the benefit of the privileged few, not to the real victims,” wrote Herman Kumara head of the National Fisheries Solidarity Movement in Negombo, Sri Lanka. “Our voices are not heard and non 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.” 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. 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 warned 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 U.S. Marines.” The same holds true on the coasts of Thailand and Indonesia where the tsunami wiped the coastal areas clean of the communities which had stood in the way of hotels, resorts, casinos and shrimp farms.

Paul Wolfowitz, as Deputy Defense Secretary, designed and oversaw a strikingly similar project in Iraq: The fires were still burning in Baghdad when U.S. occupation officials rewrote the investment laws and announced that the country’s state-owned companies would be privatized. He did in Iraq what the World Bank is already doing in virtually every war-torn and disaster-struck country in the world.