From Bolivia to Iraq, "Trickle-Down Economics" a Total Failure

By Charlie Cray

While it’s hard to see it here in the U.S., "trickle-
down" economics is beginning to be confronted by
popular democratic movements, which are bubbling up in
communities across the country as well as all over the
world in countries like Ghana and Bolivia, where fierce
resistance to the privatization of water not only
pushed big water multinationals like Bechtel out of the
country , but led the government of Bolivia to begin
pushing the world’s international financial
institutions to exempt water from trade liberalization
(i.e. corporate predation) agreements and bolster
effots to reverse now widely-discredited structural
adjustment programs that have forced debtor nations to
privatize essential services like water in exchange for
usurious loan packages.

Activists who went to the World Water Forum held in
Mexico City last month say that Bolivia’s experience is
beginning to show signs of rippling out to the rest of
the world, becoming a significant model that the
struggle for democracy can use to challenge the cold
logic of "trickle-down" economics — i.e. the bogus
arguments for efficiency etc. by which privatization is
sold.

Instead, the principles of community self-determination
and social and environmental rights are beginning to
bubble up and challenge the right of multinational
corporations, unaccountable investors who benefit from
the corporate system, and their shills in the
development-financial institutions.

For years protestors have been told that "there is no
alternative" to global corporate rule — but now we are
beginning to see the emergence of a new dynamic in
public discourse — led by activists and societies of
the South — and focused on specific sectors where
these norms of accountability and human rights are
easily understood — a dynamic that will turn much of
the dominant global economic framework upside down if
allowed to run its course. (Yes, a big IF. As every
activist knows, power never concedes anything on its
own.)

Meanwhile, the struggle against what people in Bolivia
experienced, has also been going on in communities
across the U.S., as groups like Public Citizen’s Water
for All Campaign have documented so well.

You may think a discussion of oil and water doesn’t mix
well, but the problems in Iraq have a lot to do with
the trickle- down model of political economics, which
U.S. interests have been pushing there as well.

E.g. the same company, Bechtel, as well as other
construction and engineering contractors failed to fix
more than 35% of the water treatment systems slated by
the CPA to be fixed (leaving two out of three Iraqi’s
without potable water).

Of course, that’s just a minor piece of the broader
model of "trickle-down" economics that the Bush
administration would have wished to impose upon Iraq,
starting with Paul Bremer’s series of CPA executive
orders, which were designed to privatize state-owned
industries, relieve multinationals of any obligations,
and criminalize popular forms of organizing (Saddam’s
anti-union law being the one law Bremer decided to
uphold).

That is, Bremer and Bush decided to force Iraqis to
recognize investor rights by fiat that elsewhere they
and other administration’s have pushed through more
velvety (but no less lethal in consequence) trade
agreements and development policies.

Nevertheless, an ill omen of things to come happened
very early during the occupation, indicating just what
Bush and companies mean by bringing "democracy" to
places like Iraq: Some bonehead decided early on after
one of the southern cities was captured that Iraqis
suffering from the scorching heat needed to begin to
learn about the market system. This commander decided
to impose a rule that all Iraqis seeking water from
water trucks that were beginning to circulate would
have to purchase the water instead of just having it
provided to them for free.

The policy was quickly reversed when riots began to
break out.

Of course the insurgency has since continued to make it
awfully difficult for transnational investors to make a
killing in Iraq.

Leaving aside for now the question about whether or not
the intention was really to exploit Iraq’s various
liquids, even if you believe the military mission
itself was designed to promote democracy, another
Halliburton scandal has clearly demonstrated that the
privatization of water has also undermined that goal.

I refer to the story, first documented when current and
former Halliburton employees contacted my colleagues at
HalliburtonWatch.org last year, to tell us how the
company and its KBR subsidiary have knowingly exposed
thousands of U.S. troops in Iraq to hazardous levels of
unhealthy water from the Euphrates River, including
human fecal matter.

These allegations were once again the subject of an
unofficial congressional hearing on Friday, when Capt.
Michelle Callahan, MD, a U.S. army surgeon in Iraq with
the 101st Sustainment Brigade, told the committee that
water containing human fecal matter and other human
waste was being re-circulated by Halliburton back into
the non-potable water supply used by the troops for
showering, brushing teeth, shaving, washing clothes,
and preparing food and coffee. After finding coliform
bacteria and e-coli in the water, Callahan said a
Halliburton official informed employees that, "there’s
not a problem with it."

"I had a sudden increase in soldiers with bacterial
infections presenting to me for treatment," Callahan
told the committee. "All of these soldiers live in the
same living area (PAD 103) and use the same water to
shower. I had 4 cases of skin abcesses, 1 case of
cellulitis, and one case of bacterial conjunctivitis,"
she said.

An internal Halliburton report leaked to the committee
and authored by the company’s Iraq water quality
manager, admitted that, "No disinfection to non-potable
water was occurring [at Camp Ar Ramadi] for water
designated for showering purposes. This caused an
unknown population to be exposed to potentially harmful
water for an undetermined amount of time."

"This event should be considered a ’NEAR MISS,’" the
Halliburton report warned, "as the consequences of
these actions could have been VERY SEVERE resulting in
mass sickness or death" (emphasis in the original). The
report added, "The deficiencies of the camp where the
event occurred is (sic) not exclusive to that camp;
meaning that country- wide, all camps suffer to some
extent from all or some of the deficiencies noted."

The report laments that, "The likelihood of a similar
event is considered high if no actions to correct
widespread program deficiencies are taken."

Nevertheless, Halliburton management continue to deny
that a problem even exists.

But after reviewing Halliburton’s internal water
report, Jeffrey K. Griffiths, MD, Professor of Public
Health and Medicine at Tufts University School of
Medicine, told the committee that the source water used
at Ar Ramadi was "highly polluted" and "highly likely
to make [the troops] sick." He said the troops "would
have been better off with water [taken] directly out of
the Euphrates River," which the doctor described as an
"open sewer."

"This is really pretty unbelievable to me," Senator
Byron Dorgan stated in response to denials by
Halliburton and the Pentagon. "I understand no one
wants to take responsibility. No one ever wants to be
accountable for anything," he said. "We now know that
those denials were wrong and Halliburton and the
Pentagon would have known them to be wrong."

So, you may be thinking, how does this relate to what I
said about what’s been happening in Bolivia? It’s
almost directly related, because similar arguments
about market-based efficiencies were used to hand over
the water supply work to a private contractor.

Back in the early 1990s, when Dick Cheney was Secretary
of Defense, the Pentagon set up the Army’s logistics
contracts program (LOGCAP), which established that
private contractors would take over certain basic
services for the military, including building new bases
(whether temporary or "enduring"), cleaning the
laundry, cooking meals and filtering and providing
water for the troops, and most of the other things
Halliburton has been doing in Iraq (the oil
infrastructure and engineering work is a separate
contract, though they got mixed up in the beginning,
which is why it’s somewhat confusing).

Although the justification for establishing the LOGCAP
contracting system still remains hidden in a classified
Pentagon report, we can surmise that it was sold on
some basis of efficiency — i.e., either it would save
taxpayer money for other weapons boondoggles (and now
we know how bogus that claim is), or, probably more
likely, so that the military could maximize its troop
strength by freeing up combat-ready troops from
performing duties that don’t require so much military
training.

Setting aside the question of whether it’s even at all
logical at this point to try to maximize U.S. troop
strength at the "enduring bases" in Iraq where
Halliburton continues to provide water and meals, etc.,
the point is that even for the military itself — and
measured by its own standards of efficiency —
privatization of water services has been a complete
failure, because by cutting corners, the contractor
made an unknown number of U.S. troops sick, and put an
unnecessary additional strain on the already overtaxed
military.

What links all of these stories together is the manic
logic of global political-economic corporate control
which, judging from what’s happening in Bolivia and
rippling outwards, may be starting to dry up.

After becoming sick and tired of being poisoned by
"trickle down" policies, you can bet that people
everywhere will increasingly slake their thirst for
something better.

Charlie Cray is the director of the Center for
Corporate Policy in Washington, DC. He helped establish
Halliburton Watch, and is co-author of The People’s
Business: Controlling Corporations and Restoring
Democracy (Berrett-Koehler), and is a former associate
editor of Multinational Monitor magazine.

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