Iraq was the first country in the twentieth century to achieve independence, and it is likely to be the first country in the twenty-first century to lose it. And the whole process holds some bitter lessons and warnings for other developing countries.

The latest imperialist war is still under way in Iraq but, already, the desperate scrambling for contracts has begun. In the name of providing 'humanitarian assistance' and 'reconstruction' to the people of Iraq after all the death and devastation, the US administration is busy working out all the possible sources of profit for US multinationals, once again at the cost of the Iraqi people.

On 19 March the US announced that it would soon propose changes to the UN oil-for-food programme that would streamline aid distribution. The plan is yet to be formally revealed, but the basic elements are known.

The sanctions imposed by the UN over the last twelve years, which have not been lifted because of US resistance, led to the oil-for-food programme that allows Iraq to sell oil in return for basic requirements. The control over the escrow account of this programme was shared between Baghdad, which requested purchases, and a committee controlled by the UN Security Council, which approved them. Iraqi officials selected vendors to import the goods or complete the approved work—such as humanitarian projects, infrastructure repairs and so on.

The scheme has been suspended due to the war. But the US apparently proposes a continuation of that scheme even after 'regime change' after the war, which appears to have no legal justification whatsoever.  Under the new system, any entity operating in Iraq can make submissions directly to UN Secretary-General Kofi Annan, who will approve and oversee aid disbursements. Such entities can do the work if they are equipped to do so, or subcontract it out to others as they see fit.

The US claim is that 'the process would greatly speed up the aid disbursement process and cut out the middlemen who profit from the contractual go-betweens’. Actually, of course, the new scheme will serve quite different ends.

It so happened that many of the middlemen involved earlier were French and Russian companies, which in turn tended to award construction and other contracts to mostly European companies.  Under the new system, it will fall first to US and allied forces in Iraq to submit most of the requests for aid disbursements, and later to a US coalition-backed government. This will almost completely eradicate the French and Russian business presence in both Iraq and the oil-for-food programme. Presumably this is just the first in a series of punishments that are likely to be meted out by the US for lack of support for its unjust war.

But the new plan serves another, very practical purpose. So far, any Security Council member could block an aid disbursement. The United States had played a crucial role in blocking all sorts of humanitarian assistance to Iraq all these years. This is why there was such a huge shortage of food, medicines and basic necessities in Iraq. Meanwhile, Iraq's oil revenues have built up in the escrow account—and now amount to some $40 billion.

This is more than Iraq normally makes from oil sales in two years. If this new scheme is accepted, the United States could pull these huge amounts towards projects for its own companies. It would also mean that the US and the UK have to pay nothing to reconstruct the country they are currently systematically and violently destroying.

Appallingly, this cynical new scheme already seems to have the blessings of the Secretary-General of the United Nations, cowed down by the latest display of US might. Last week Kofi Annan said he would adjust the oil-for-food programme along the proposed lines. While the Iraqi Ambassador to the United Nations has protested, the chances are that eventually this will go through.

The Bush administration has already solicited proposals from US firms in a number of areas, including seaport and airport projects, and schools, education and health services. The various favoured firms include the construction giant J.A. Jones, the oil company Halliburton (with very close ties to Bush and his cronies) and the multinational power company Bechtel.

This is indeed a new definition of 'aid’. Iraq's oil and Iraq's money are now to be operated by others who will award contracts to themselves and their friends, to rebuild the basic infrastructure that is being destroyed by these same powers using the flimsy lie of weapons of mass destruction that do not exist. The recolonization of Iraq could not be more open or more overt.