IndexIntroductionWhy Neoliberalism in Iraq?Neoliberalization in PracticeNeocolonial Aspect of NeoliberalizationThe Failures of Neoliberalization in IraqIntroductionNeoliberalization has been a common method by which developing economies have opened their markets during the 20th century. Neoliberalization can be applied both in a narrow sense and in full, referring strictly to a change in policies that increase market dependence, and in a full sense referring to a change in the relationship between society and state that effectively transfers importance to the market (Walton 2004 ). Neoliberalization is based on privatization, deregulation and cutting public spending on social services. Neoliberalization has occurred in Latin American countries such as Peru, Brazil, and Argentina, and has been accompanied by numerous problematic outcomes. For these reasons it is not surprising that neoliberalization was the recommended strategy for rebuilding the Iraqi economy after the invasion. The purpose of this article is to question why the United States chose to implement the neoliberalization of Iraq in the way it did, and the effects this neoliberalization has had on the Iraqi economy. The four sections of this article will examine why neoliberalization was the chosen method for reconstruction in Iraq, neoliberalization in practice in Iraq, the corruption that neoliberalization brought with it, the neocolonial aspect of neoliberalization, and the consequences of the reconstruction of the Iraqi economy. The neoliberalization of Iraq was carried out without considering why the Iraqi economy behaved the way it did, resulting in the creation of a humanitarian, economic, ethnic and sectarian crisis within Iraq. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Why Neoliberalism in Iraq? At the time of the invasion of Iraq by US Special Forces in 2003, there was little doubt that some level of economic reconstruction would be necessary. After the invasion, the United States argued that the Iraqi economy was heavily burdened by endemic corruption and inefficiencies, making neoliberalization the most effective option for reviving the Iraqi economy (Abboud 2008). Rather than entirely attributing the failure of the Iraqi economy to rampant corruption and inefficient policies, external causes such as the militarization of the economy and the economic sanctions imposed on Iraq by the United States have contributed greatly to the state of the inherited economy (Mahdi 2007) . If the United States had taken the causes of state failure into account when determining methods for reconstruction, state failure would have been much less likely. The history of the Iraqi economy illustrates the negative impact that US involvement had inflicted on the state of Iraq before the war. 2003 invasion. The OPEC-caused increase in oil prices in the 1970s allowed Iraq to take a step in the right direction and expand its development budget, increasing both social and infrastructure spending. Most development spending fell short of allocations, due to shortages of skilled labor and transportation problems (Youssef 2007). However, building infrastructure and investing in social projects has allowed Iraq to begin building the foundations of a strong economy and state. Military conflicts such as the Iran-Iraq War and the 1991 Gulf War have left an impactsignificant on Iraq, especially in terms of Iraqi infrastructure (Mahdi 2007). The skilled labor market was hit hard by the Iran-Iraq conflicts that lasted from 1980 to 1988, compounding transportation problems seen in the 1970s and costing the Iraqi economy, with the end result being that the Iraqi government cut social spending . Economic sanctions imposed on Iraq in 1990 put the Iraqi economy in a state of distress, causing incomes and real GDP to collapse, while the 1991 Gulf War saw US troops target infrastructure such as oil refineries, of telecommunications and industries that could only be rebuilt using imports. and/or foreign expertise (Youssef 2007). Taken together, these factors left Iraq, its people and its economy in a state of distress before the invasion of Iraq in 2003. When the CPA (Coalition Provisional Authority) came to power in Iraq, they implemented the neoliberalized economy rapidly and with little consideration. for the reasons why the Iraqi economy followed the patterns it did, or the fact that the Iraqi economy was willing to exploit a free market, creating systemic problems down the line. When neoliberalization is implemented, it is generally assumed that the receiving nation will gain “macroeconomic stability, reduced public intervention, a dynamic private sector, and prosperity” (Looney 2004). Neoliberalization deregulates banks, privatizes state-owned enterprises, and lays the foundation for the creation of a stock exchange to build a competitive free market (Looney 2004). In theory, these changes would substantially benefit Iraq and its people, as a history of corruption and reliance on state-owned enterprises have led to high rates of poverty and a weakened state. There were three main arguments in favor of the neoliberalization of the Iraqi economy, all largely focused on ending the endemic corruption in Iraq while allowing the economy to develop. The first argument in favor of neoliberalization was that public ownership was deteriorating the Iraqi economy, limiting privatization, while harsh statist policies distorted economic outcomes. Second, public sector corruption was so significant that privatization was crucial to combating it. According to the CPA, privatization of business and industry would allow for increased productivity and efficiency in resource allocation (Mahdi 2007). Finally, it was argued that the market needed to be neoliberalised to attract foreign direct investment as well as the attention of multinationals, who would bring with them skills and technology and increase productivity in the long term. Another argument for the invasion and subsequent neoliberalization of Iraq focuses on the “transnational crisis of overaccumulation” and sees the invasion and reconstruction of Iraq as a “comprehensive investment in the future.” The globalization of production that began in the 1970s occurred concurrently with the centralization of economic control and management (Baker 2014). As capital penetrated economies around the world, it began to run out of space, creating a crisis of overproduction and overaccumulation. Rampant underconsumption has been remedied through US-led militarization, designed to stimulate spending and gain access to otherwise untapped markets. The neoliberalization and subsequent privatization of the Iraqi economy was one such remedy and aimed to orient Iraq transnationally to absorb excess capital and engage in global consumption, while providing statesUnited special access to the economy (Baker 2014). Hasty neoliberalization was intended to allow for more rapid absorption, even as it left Iraq in a state of distress. terrorism in the war on terrorism. Executive power can be exercised by presidents without any evidence of wrongdoing on the part of the targeted parties, which has provided the president with a powerful tool to pursue his agenda. The Patriot Act allowed the President to freeze the funds of both individuals and non-governmental organizations (NGOs) believed to have ties to terrorist organizations (McCulloch et. al 2005). This significantly reduced NGO funding, as the Patriot Act exposed anyone who donated to NGOs to the potential for devastating criminal and financial punishment. NGOs create a space for civil society and are a necessary element of any functioning democratic state. NGOs have a responsibility to support movements for social justice and civil rights, but the counterterrorism tactics favored by Bush have significantly reduced the funding available to NGOs, further reducing the space for civil society and the potential for social change in these nations , resulting in increased rates of poverty and destitution (McCulloch et. al 2005). The Patriot Act also allowed the United States to freeze funds in several informal banks, which proved problematic for the Iraqi people as informal banks were more widespread and reliable than formal banking systems in the Middle East (McCulloch et. al 2005). This allowed the United States to further dominate financial networks, while forcing the Middle East into a Westernized banking system less equipped to meet their needs. Foreign banks were encouraged to open conglomerates in the Middle East or buy shares in existing banks whose assets had not been frozen. The destruction of civil society and the seizure of informal banking systems have given the United States unprecedented control over the regions and left those affected by US sanctions much more vulnerable to mistreatment by the state. Phase 1 of Iraq's neoliberalization began in January 2003 and was led by President George W. Bush. The Office for Reconstruction and Humanitarian Assistance (ORHA), led by Jay Garner, was the first office to be established, with the intention of guiding Iraqis through establishing a democratic system while rebuilding their economy . The government reconstruction planned by ORHA would involve the removal of Saddam Hussein and all of his closest adversaries, while maintaining the bureaucratic structures already in place in Iraq. The removal of Saddam Hussein's government began in March 2003 and was completed by April 9 of that year. Saddam's removal, however, resulted in the collapse of the Iraqi government's bureaucratic structures and infrastructure, an unexpected outcome under ORHA's original plan. Iraq was then divided into six command centers, called major subordinate commands or MSCs. Each MSC was to focus on reconstruction within its sector - southeast, south-central, north, north-central, western and Baghdad - with funding from the Development Fund for Iraq (DFI), the Emergency Response Program commanders' emergencies (CERP) and from oil export resources. Iraq's position as a “state of exception” at the time of the restructuring was crucial in terms of the CPA's ability to restructure the Iraqi economy. A “state of exception” refers to a moment in time when the rule of law is suspended within a state due to emergency conditions, such as war, and is based onsuspension of laws to impose a “new force of law”. The state of exception in Iraq has allowed Paul Bremer, head of the Coalition Provisional Authority (CPA), to enact laws, rebuild the budget, reallocate funds and write the new constitution to be followed and promulgated by the Iraqi people. The separation of powers within the CPA was almost negligible, providing Bremer with an incredible amount of political and legal authority. the Iraqi economy. The CPA passed one hundred free-market economic orders, opening the market and allowing the privatization of several key industries, as public industry was deemed to be ineffective and unprofitable (Youssef 2007). The privatization of industry left thousands of Iraqis unemployed, as the state was Iraq's largest employer. Phase 2 began with Order no. 1 which called for the controversial “De-Baathification” of Iraq, which removed former president Saddam Hussein's close associates from positions of power. De-Baathification involved the purge of Baati Party supporters from any positions of leadership or authority working in public service in Iraq. The second de-Baathification order issued by Paul Bremer focused on removing thousands of Iraqis from their jobs and disbanding the Iraqi army, further costing the Iraqi economy and its people. De-Ba'athification allowed the United States total dominance over reconstruction, destroying the possibility that Iraq could rebuild itself. Order 39 of the CPA Ordinances privatized the economy and allowed foreign ownership of state-owned enterprises, as well as allowed foreign owners to move their assets out of Iraq. This has allowed foreign investors to monopolize key sectors such as electricity, banking, factories and telecommunications in Iraq. This legally binding administrative order from the CPA violated the Hague Rules as occupying states are not permitted to administer privately owned assets, as well as illustrating the United States' desire to economically control important public and private assets in the Middle East. The CPA then ended agricultural subsidies within Iraq through Order 89, which banned seed sharing by Iraqi farmers, requiring them to purchase seeds from transnational corporations whose seeds were “protected,” at order to reduce global overaccumulation. The end of agricultural subsidies has created a “patent regime” in Iraq, in which multinational corporations profit from farmers, forcing them to grow fewer crops and causing poverty. This moved Iraq into global capital networks, allowing them to absorb excess capital and further benefiting nations like the United States. The second phase of the CPA initiatives shook Iraq with its neoliberal shocks and left a significant part of the population unemployed and in difficulty. Neocolonial Aspect of NeoliberalizationIraq was effectively colonized through globalization and capitalism. It has been argued that the revolution imposed on Iraq was predestined to fail, based on a history of instability and the revolutionaries' contempt for the causes of instability. To escape the Geneva and Hague Conventions, the United States identified itself as the “liberators” of Iraq, allowing it to overcome conditionalities that would prevent it from implementing entirely new rules of law (Baker 2014). The United States was also extremely careful to defend its position as liberator, due to the imperialist notions implicit in the idea of ​​occupation and the legitimacy it provided to their prolonged.