Letter from South Baghdad, May 2008
by Sgt. Jay Dawkins
“I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.” — Alan Greenspan
Yesterday I was in a small village south of Baghdad talking to a sheik about Iraqi oil. The sheik was telling me that in November 2000, while we were figuring out whether Bush or Gore won the election, Saddam Hussein did something quite extraordinary. He switched the currency for Iraq’s oil sales from dollars to euros. From that point on, any nation buying Iraqi oil would have to pay in euros instead of dollars. The move was seen as a political slap in the face to America, but went largely unnoticed at the time. Economically it turned out to be an astute move by Saddam. The euro eventually increased in value well above that of the US dollar; and there were other far-reaching implications.
The value of the US dollar is essentially pegged to OPEC oil. In the post-WWII era the dollar was pegged to gold, but Nixon ended the gold standard in 1971 and set our US currency free to romp and roam unfettered.
After a series of negotiations with Saudi Arabia, the value of the dollar was tied to oil in 1974 when the Saudis promised that OPEC would only accept US dollars for all its oil sales. Thus, the US dollar was held afloat because any nation needing to buy oil had to keep large amounts of US dollars on reserve in their central banks to pay for that oil. This created a constant and worldwide demand for US currency to the extent that it has been said our largest export is hundred dollar bills.
Our economy benefits from global oil sales even when those sales don’t involve us because the transaction takes place with US currency. Should OPEC ever decide to change its currency to, say, euros, then everyone importing oil would have to dump their dollars for euros and suddenly you have a lot of devalued Ben Franklins floating around the world looking for a home.
Saddam’s decision to drop the dollar had great economic consequence, not only because Iraq has the second largest oil reserves in the world, but also because of increasing competition with the dollar from rising Chinese, Russian and European Union currencies. The precedent Saddam set had the potential to embolden other oil producers to switch their petrocurrency, causing the dollar to dangerously devalue.
A sheik who knows first-hand was telling me all this, but I had heard it before from numerous Iraqis over the course of my year here, and I always say, yes, yes, but then the US invaded Iraq in March 2003 and the first thing we did was secure all the oil fields (and then we secured the potential WMD sites) then we won the war on May 1st and Bush did his flight-suit thing and Mission Accomplished etc. etc. etc.
Fast forward one month to June 2003 when the US switched Iraq from the euro banking system back to the dollar for all future oil sales. Problem solved, I said, crisis averted. Then the sheik and I laughed and he congratulated us on our American ingenuity; after a pause he mentioned that countries like Venezuela, Russia, and Iran are now also moving their oil sales from dollars to euros in an effort to thwart our aggressive policies in the region, so….yeah, there’s that.
“Indeed,” I said gravely, “this means we may have to invade them too.” He nodded his head in agreement. But then I said, “I’m totally kidding! That would be insane.” We laughed together again.
The sheik’s bodyguard chimed in for the first time and said something I’ve heard voiced by many Iraqis. He stated, “We Iraqis hate oil.” He said they hate it because the whole world has converged on their land to vie for the singular resource Iraq is so cursed to be blessed with. The average Iraqi wants nothing more than for the oil to be gone so everyone will just stop, go home, and leave them alone. The sheik asked me if the US would promise to leave Iraq if they were
given all the oil. I replied that it doesn’t work like that.
“The thing is,” I said, “we came here to save you from Saddam.”
“Saddam is dead.” he said. “But,” I told him, “We have to protect you from Al Qaeda.” He said, “Al Qaeda was never here till you came.” I said, “Yes fine, but we have to stay in Iraq or you will descend inevitably into civil war and collapse in upon yourself like a dying star.” He said, “That’s the same thing the British said from 1917 to 1947 when they occupied Iraq.” I said, “Well in any case we have to protect you from Iran.” He then talked about Iran being a partner to the Arab world, fellow Shiite brothers, etc. etc. I cut him off by saying, “Look bro, we’re building 14 permanent bases here as we speak. Reasons come and reasons go, but you best believe we’ve no intention of leaving a strategic gem like Iraq anytime soon.”
This has been a paradigm shift for me. I used to be under the impression we were bogged down in Iraq, trying desperately to leave if only we hadn’t bitten off so much more than we could chew. I remember learning in linguistics class long ago that Eskimo soldiers have over 100 words for quagmire. I thought that’s what this was, that we were in over our head.
The fact is we never had an exit strategy. We never had any intention of leaving. I’ve been to several of the 14 permanent bases the US is building here. They are cities — complete with neighborhoods, bus routes and a ‘mayor’s office,’ with roads paved, foundations laid, housing built, shopping malls and Harley-Davidson dealerships next to Burger Kings and Pizza Huts. All staffed by workers shipped in from the Philippines and India. Many soldiers serve their entire 15 months in Iraq without ever speaking to an Iraqi.
We are digging in. Whatever politicians are telling people back home, the facts are we have entrenched ourselves so deeply that no future administration will be able to justify pulling us out as long as the loss of US lives remains at an acceptable level for the American public (no more than a couple hundred casualties a year).
Our role may shift, the numbers may be fewer, but rest assured we will remain no matter November’s outcome.
My first six months in Iraq were spent moving between four permanent bases. One was a hydroelectric power station before the US took it over. Two of the bases were water treatment plants. The fourth was an agricultural factory. We gutted all four and made them into US compounds.
After 5 years of occupation – much of Iraq doesn’t have electricity for more than a few hours a day. Why is there no safe drinking water in our area? When I look at our base where the former water treatment plant was, and then see villagers drinking canal water containing raw sewage, I am forced to ponder the question that Bush asked in a speech just a few days after 9/11. “Why do they hate us?”
He answered his own question by saying, “Because we love liberty and progress.” This is true; I wake up everyday and marvel at the new and profound development I see in Iraq, the great and sweeping improvements in infrastructure, and standard of living. . . but then I leave our base.
I’m not sure what my responsibility is in sharing any of this with you. I am not doing it for shock value. People who are against the war will hem and haw and point at the raw sewage in the canal water to say, “See I told you so.” They feel smug in their abhorrence, and justified in their disdain, while those who love war point out that raw sewage is better than Saddam. Nothing changes in this eternal dance between the hawks who get to have their wars and the doves who get to let them.
My hope, however, is that what I have related will encourage people to learn more. It is easy to feel overwhelmed, our responsibility is to change the things we have power over. Americans must understand the relationship between our daily insistence on abundantly cheap oil and that which is happening in Iraq. We need to educate ourselves about the true cost of the things we consume. Someone somewhere somehow has to pay, and for the last year I have seen how ugly a reckoning it can be. Our determination to be full and filled and fulfilled as a people has forced our government to enact policies in far-off places that will appease our domestic demands.
Few Americans ever witness the distant reality of what is taking place in our name. It is only when we feel the occasional blowback of those policies such as on September 11th that we have to ever deal with the repercussions of our actions. President Bush asked, “Why do they hate us?”
Bin Laden had his own question for America: “Is it worth it?” So long as we are okay with what we are doing to the world, and willing to accept the occasional September 11th that inevitably will occur, and accept our government killing people on the other side of the world who look, and speak, and believe differently from us, it is worth it. There is no need to change. But if we are uncomfortable with any of this, then we need to pay the price of virtue and take away the rationale for these wars. The rationale is our demand for excess, made possible and fueled by the resources that nations like Iraq are so cursed to be blessed with. Our use of oil has become a moral issue. That means every day, every one of us is part of this war. That also means every day, every one of us can be part of ending it.