'Banking on Empire'---on naked colonialism in Iraq

[Aidoneus]

Banking on Empire
Mitch Jeserich, February 17, 2004

Iraqi ministries will now be able to borrow billions of dollars to buy much-needed equipment from overseas suppliers, but only by mortgaging the national oil revenues through a bank managed by New York- based multinational JP Morgan Chase.

Hussein al-Uzri, president of the Trade Bank of Iraq, which is managed by JP Morgan Chase, announced last week in Kuwait City, that the bank had raised $2.4 billion in export guarantees for trade between Iraq and foreign companies and governments.

"Those oil revenues will be used to support the Iraq Trade Bank letters of credit," said David Chavern, a senior official with the U.S. Export-Import Bank, when he addressed attendees at a recent briefing organized by Equity International for potential investors in Iraq. "And we will ensure those letters of credit for the U.S. exporter."

The management contract, which is worth $2 million over two-and-a-half years, was awarded to a consortium of thirteen banks representing fourteen countries, led by JP Morgan, last July after a competitive bidding process against four other international consortia. JP Morgan Chase, which was formed from the merger in December 2000 of one of the world's largest commercial banks, the Chase Manhattan Corporation, and the investment bank J.P. Morgan & Company, declined to comment about its role in the Trade Bank of Iraq.

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But critics say that the occupation authorities and multinational banks may be shackling a future Iraqi government with an unknown quantity of debt. "The oil figures are very murky and secretive," said Nomi Prins former investment banker and author of the forthcoming book Other People's Money: The Corporate Mugging of America. "That same oil for which no one has the appropriate...information is being used to collateralize multiple things. You're effectively leveraging oil for which the revenues are non-transparent."

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http://www.guerrillanews.com/sci-tech/doc3922.html