Backing the Bad Guys

Noreena Hertz

1st December, 2004

As the world’s poorest countries sink further and further into debt, Western corporations grow fat from government-backed projects that fuel conflicts, harm the environment and have built-in kickbacks.

On 5 February 2003 then US secretary of state Colin Powell presented a dossier to the UN Security Council with reasons for why the world should go to war against Iraq. One reason was the existence of a chemical weapons plant, ‘Chlorine Plant Falluja 2’, situated 50 miles outside of Baghdad, which the US claimed was a key component in Iraq’s chemical warfare arsenal and which even the cautious Hans Blix, the former UN chief weapons inspector, had sad might need to be destroyed.

Given that the dossier was also used by Britain to justify the invasion of Iraq, it is somewhat ironic that it was the British government that had been responsible for building the £14m factory 17 years before. In 1985 the Export Credits Guarantee Department (ECGD), a government agency that funds or insures British corporations wanting to do business in high-risk areas overseas, had provided insurance to a British subsidiary of the German company Uhde Ltd so that it could set up the plant in Iraq.

Did the British government know that this plant it was underwriting with British taxpayer money could be used to develop chemical weapons? Uh, yes. At the time, senior government officials wrote that there was a...

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