The Iraq Study Group Report — Has the Empire Really Failed?

"The Failure of Empire" is the title I gave to the closing chapter of my book Naked Imperialism (Monthly Review Press, 2006). That chapter first appeared almost two years ago as a January 2005 article in Monthly Review. It began: "The United States is facing the prospect of a major defeat in Iraq that is likely to constitute a serious setback in the ongoing campaign to expand the U.S. empire." It ended: "The U.S. invasion and occupation of Iraq may be creating the conditions for a civil war, lighting a powder keg under the entire Middle East."

These observations have been borne out by subsequent events. Yet, at a time when even the new Secretary of Defense, Robert Gates, has stated that the United States is "not winning" the war in Iraq, it is important to recognize that there is also a sense in which the empire may not have entirely failed — at least not yet. The war is almost universally viewed as a political and military disaster for the U.S. empire. Nevertheless, Washington is still hoping amidst the devastation to hold on to some of its long-term economic and strategic goals in Iraq. Realization of these will have made the war "worth it" from the standpoint of the U.S. ruling class, irrespective of the cost in lives and treasure.

There is no doubt what these spoils are: (1) control of Iraqi oil reserves (the second largest in the world), (2) "geopolitical gains" (or greater domination of the vital Middle East oil region), and (3) strengthening of U.S. global hegemony as a result of this new oil imperium. Crucial to the realization of these spoils, the United States has not only been forcibly occupying Iraq, but has also been looking to the future by building long-term (usually referred to as "permanent") military bases in Iraq where it plans to continue to locate substantial military forces and capabilities even after it has ostensibly "withdrawn" its troops. Such bases have but one undisguised purpose: the projection of U.S. imperial power over Iraq, the Persian Gulf, and the surrounding regions as part of the larger global projection of U.S power.

Little noticed or commented on in media discussions of the recently released Iraq Study Group Report is that one of its proposed "Milestones" for "the end of 2006-early 2007" is the Iraqi government's passage of a "new petroleum law." Washington not only helped to draft this law (in conjunction with representatives of the large oil corporations), but is playing a role in ensuring its passage. The full details of the new legislation are not available, but it is clear that it is intended to establish "production-sharing agreements." Production-sharing agreements are the contemporary version of the old imperial concessions system, giving foreign corporations control over the production and marketing of Iraqi oil reserves and the lion's share of the profits.

In line with this, the Iraq Study Group Report's Recommendation 63 states: (1) "The United States should encourage investment in Iraq's oil sector by the international community and by international energy companies," and (2) "The United States should assist Iraqi leaders to reorganize the national oil industry as a commercial enterprise, in order to enhance efficiency, transparency, and accountability." In other words, the goal is the privatization of the Iraqi oil industry to an extent that does not currently exist for any major petroleum-exporting country. This will open up the country's oil fields to full exploitation by foreign corporations (in which U.S. and British oil multinationals are expected to dominate). The new production sharing agreements will so enhance the value of the global energy firms that enter into these contracts that these corporations will be able to book the value of the Iraqi oil production/reserves that they control, as assets in their own corporate accounts (see "Notes from the Editors," Monthly Review, December 2006).

Given the antiwar movement's earlier "No Blood for Oil" slogan, the U.S. political and economic establishment and the U.S. corporate media have of course done everything they can to conceal and downplay the significance of oil in the Iraq equation. This can be seen in a front page article in the New York Times on December 9th entitled "Iraqis Near Deal on Distribution of Oil Revenues," addressing the new Iraqi oil law. The article focuses entirely on the issue of the distribution of oil revenues between Shiites, Kurds and Sunnis, a crucial issue in the formation of a new Iraqi state. But something is missing. Nowhere in its extensive and detailed analysis does the New York Times mention that in the new law the Iraqi oil industry is to be effectively privatized, with real control over the oil reserves turned over largely to foreign corporations through production-sharing agreements that no major oil exporter has accepted willingly.

To be sure, Recommendation 23 of the Iraq Study Group Report would appear to have helped alleviate all such concerns by declaring that "The President should restate that the United States does not seek to control Iraq's oil." But the fact that the President Bush is asked to "restate" this suggests that his original statement to this effect was not believed by the Iraqis, and for good reason. Although the United States has offered "guarantees" of Iraq's de jure control over its own oil, the production-sharing agreements in the draft petroleum law are designed to wrest from it de facto control.

The non-treatment of this issue by the New York Times contrasts sharply with the analysis only two days before in London's Financial Times (December 7, 2006) in an article entitled "Oil Groups Dream of Day They Can Enter Iraq." There we are told: "Political squabbles have overshadowed what could be the historic aspect of the legislation: . . . the law is expected finally to reverse the 1972 nationalization of the industry. According to drafts now circulating, it would allow various forms of foreign partnership, possibly including production-sharing agreements. Such contracts are preferred by oil companies . . . giving them greater scope for gain if oil prices rise." Further, the Financial Times states: "Big oil multinationals struggling to increase their own production and add to reserves have been desperate to be given a chance to develop Iraq's oilfields." One British Petroleum official is quoted as saying, "The whole industry is interested in Iraq, including us." "From a global perspective," the Financial Times tells its mostly corporate readers, "Iraq's oil is becoming increasingly important to overall supply as demand accelerates, from China in particular, and output from fields in the U.S., Europe and parts of Asia slows with their advancing age." Iraq's production, the Financial Times contends, needs to increase by 4.9 percent every year until 2030 to meet world demand.

The main obstacle to this "Oil Groups Dream" is of course lack of security, which greatly magnifies risks. Iraq needs to be under firm, strategic military control. This means that it must be ruled over by either a strong but exceedingly compliant state or by an imperial force (or more likely some combination of the two). Only in this way can the decades-long production-sharing agreements and the vast potential profits to be derived from them be secured. As the same BP official states, "The security situation would have to improve dramatically if oil companies like us were to commit themselves to long-term exploration and development." This boils down to finding a way of making sure that the Iraqi oil fields remain within the U.S. empire.

It is from this vantage point, in which Iraqi oil looms ever larger, that we can understand the main features of the Iraq Study Group Report, the most comprehensive plan yet available for ending the war in Iraq while securing U.S. power over the country. Contrary to the initial media accounts, this report by the bipartisan foreign policy "realists" (James Baker III, Lee Hamilton, and their co-authors) is not simply about how the United States can exit from Iraq. Rather it seeks to do so while retaining the spoils seized in the war. Maintaining control over Iraq thus still takes precedence over complete withdrawal. The empire it seems has not yet admitted failure and while wounded is still seeking to dictate the terms.

The Iraq Study Group actually envisions a "surge" of U.S. troops in Iraq in the immediate future to accelerate the formation of a strong Iraqi army and to stabilize Baghdad. Thus their report states that "the United States should significantly increase the number of U.S. military personnel, including combat troops, imbedded in and supporting Iraqi Army units."

Indeed, the bipartisan "realists" envision something more like a partial withdrawal and redeployment of U.S. forces than a complete withdrawal from Iraq. Here it is important to recognize that despite the report's insistence that "all combat brigades not necessary for force protection could be out of Iraq" by early 2008, this is understood as still leaving a large role for U.S. troops: in the areas of "force protection," as "units embedded with Iraqi forces, in rapid-reaction and special operations teams, and in training, equipping, advising . . . and search and rescue" . . . as well as intelligence and other support operations — all of which are included in the Iraq Study Group Report recommendations. Indeed, the plan offered by the Iraq Study Group would involve multiplying by as much as five times the number of U.S. troops embedded in Iraqi forces for an indefinite period.

Further, we are told that "a vital mission of the U.S. military would be to maintain indefinitely rapid-reaction teams and special operations teams. These teams would be available to undertake strike missions against al Qaeda in Iraq when the opportunity arises, as well as for other missions considered vital by the U.S. commander in Iraq." The U.S. would also continue to train the Iraq police forces, while moving the "police commandos" of the national police (paramilitary death squads originally promoted by the United States — see "Notes from the Editors," Monthly Review, May 2006) into the Iraqi Army, where the United States would have greater control over their counterinsurgency operations

In case there should be a misunderstanding about the continuing U.S. military role in Iraq, the report explicitly states: "Even after the United States has moved all combat brigades out of Iraq we would maintain a considerable military presence in the region, with our still significant force in Iraq and with our powerful air, ground, and naval deployments in Kuwait, Bahrain, and Qatar, as well as an increased presence in Afghanistan" (italics added). These forces would be available to support the Iraqi government, block the disintegration of the country, fight terrorism, train equip and support the Iraqi troops, and deter foreign aggression. In short, they would be available for all conceivable military missions necessary to control Iraq and to limit its "sovereignty" to that of a subservient neo-colony.

The Iraq Study Group's widely noted Recommendation 22 underscores that "the President should state that the United States does not seek permanent military bases in Iraq." But the next sentence in that recommendation undermines the first by declaring: "If the Iraq government were to request a temporary base or bases, then the U.S. government could consider that request as it would in the case of any other government." Such "temporary" bases can obviously be of very long duration.

The most ominous statement in the Iraq Study Group Report relates to the dismemberment of the country. The United States, the report says, should not support political "devolution to three regions" and thus the weakening, as critics suggest, of a strong Arab oil state. Nevertheless: "If events were to move irreversibly in this direction, the United States should manage the situation to . . . minimize regional instability. The United States should support as much as possible central control by government authorities in Baghdad, particularly on the question of oil revenues." Although this might be read as U.S. support for stability in Iraq and for fair distribution of oil, it is more credible to understand it as a statement of the need to maintain the empire of oil, above all other ends: including the continuation of Iraq as viable a nation-state, and the prevention of its dismemberment.

All of this points to the fact that the U.S. empire has not entirely failed in Iraq, at least not yet. From the standpoint of powerful vested interests in the United States, the Iraq War may still be seen as worth the costs. Oil after all is more valuable than blood, especially the blood of others (including the innocent). Iraq may be a political disaster but it remains an economic and geopolitical prize of incalculable dimensions. As a result the empire is not yet letting go. We remain in an age of Naked Imperialism.