AMY GOODMAN: The kidnappings of contractors is one of the realities of occupied Iraq that journalists and author Naomi Klein writes about in her cover story in Harper’s Magazine called “Baghdad Year Zero: Pillaging Iraq in Pursuit of a Neocon Utopia.” She joins us in the studio now. Welcome to Democracy Now!

NAOMI KLEIN: Thank you, Amy.

AMY GOODMAN: It is great to have you with us. Can you talk about what you see is happening in Iraq right now?

NAOMI KLEIN: Well, as it relates to the foreign contractors being targeted, I think in some ways they’re more accessible than soldiers. That’s part of the reason. There’s another reason, which is that there is a massive unemployment crisis in Iraq. According to the U.S. government’s own surveys, unemployment in Iraq is at 67%, possibly higher. I mean it, is be a absolute epidemic, and that is connected very clearly to what I would describe as the economic front of the war, which is a front of the war that obviously doesn’t get nearly the attention as the military front of the war, because it’s less dramatic, but there is an economic front to the war, and I would argue that in many ways, it explains why this war was waged in the first place. It’s not the only reason why, but it’s one of the main reasons. And if we look at the actions of the U.S. occupiers from the very beginning, we see a really clear agenda, and the phrase I use in the Harper’s piece is “the construction of the utopia,” because the idea was that in this one country, because the U.S. was in charge and they didn’t have to negotiate with the local government, they were actually able to imagine Iraq as if they were erasing it and rebuilding it from scratch. And I think it’s very telling that Paul Bremer’s very first act in office, Paul Bremer, the former U.S. chief envoy or governor of Iraq, was to lay off 500,000 people. They called this “deba’athification,” but in fact what it was, was a full-on attack on the state, which is the same thing that the International Monetary Fund does around the world, but not in such a dramatic fashion. And in retrospect, many analysts and even military analysts trace the rise of the resistance to this very first act, which 400,000 of those layoffs were soldiers. And Paul Bremer did something very interesting, which was to say, you’re fired, you are not going to get your pension, but you can keep your gun. And many, many of those soldiers went to join the armed resistance. The other thing to understand, if you look at just one industry, which is cement, which–if you think about what it means to reconstruct a country, especially like the country like Iraq where all of the official government buildings have been decimated–one of the key ingredients of the reconstruction, if you will, is cement. Iraq used to be a major manufacturer of cement. There’s 17 cement factories owned by the state, most of them built under Saddam Hussein’s regime that employed many Iraqis. In fact, they produced so much cement, that they were to export it. The U.S. occupation of Iraq, they have not given a single contract, reconstruction contract to any of the state-owned companies, in fact, they won’t even give them the emergency generators that they need to keep running. And of course, the blackouts are the responsibility of the occupation of Iraq, because the reconstruction has been such a miserable failure. So instead, they import the cement. So, what Iraqis see is the reconstruction of their country not as a kind of new deal project, which is a process of healing from war, occupation and sanctions, which is rebuilding their decimated industries, which is creating jobs. They see the opposite. What they see is another kind of foreign invasion. They see jobs going to foreigners. They see products pouring across their borders from foreign countries and they see their own industry in the dark, and because of that, the reconstruction has become a target and contractors have become targets.

AMY GOODMAN: It was interesting the way you began your piece, saying, it was only after I had been in Baghdad for a month, I found what I was looking for. I traveled to Iraq a year after the war began at the height of what should have been construction boom, but after weeks of searching, I had not seen a single piece of heavy machinery, apart from tanks and humvees. Then I saw it, a construction crane.

NAOMI KLEIN: Yeah. We were so excited. I was traveling with Andrew Stern. He is a wonderful photographer. And you know, on the list of images that we had to bring back was we had had to have an image of the reconstruction. We wanted a construction crane. We saw this big yellow crane in downtown Baghdad. We stop the car and Andy gets out with his camera, to take a picture, but as we get closer, we see that the crane is actually not reconstructing anything and it’s surrounded by buildings and rubble. It’s actually hoisting a giant billboard to the top of a three-story building and it was advertising honey, imported honey from Saudi Arabia, which actually I thought was fitting because there’s a quote from John Mc Cain and I don’t quote him often, Amy, but if you will forgive me, he will said a year ago, that Iraq is like a giant pot of honey and it’s attracting a lot of flies. And the flies he was referring to were the Halliburtons and the Bechtels that were coming to Iraq because of the — not just because of the oil and the no-bid contracts but because this had been a very, very closed economy, first under Saddam it was a nationalist, rather protectionist economy and later sealed off under U.N. sanctions and then it was just cracked open, it was a free for all for foreign investors. That was the honey. The next act that Paul Bremer made on the economic front was to announce that 200 of Iraq state-owned companies, the same companies that they were not giving any of the reconstruction contracts to were going to be privatized. Many Iraqis believe that the reason why so little reconstruction of industry is happening is–in fact none–is because they want to sell them cheaply. It’s the same process that we saw in the former Soviet Union where you starve out the public sector and then you sell it at fire sale prices, which is, of course how there’s the reason why there’s a mafia oligarchy in the Soviet Union, because they were able to — they were able to buy it up so cheaply. The same process was about to happen in Iraq. But there was so much fear inside these state companies of what that would mean, because word got out that before the factories could be sold, they would have to be massively downsized at two-thirds of the employees of the state companies would lose their jobs–that was 145,000 people supporting families of five or six. So, somebody from Iraq’s Ministry of Industry, who I interviewed, the Deputy Minister of Industry said, that she said to Paul Bremer, do you really want a million new enemies, that’s really why they had to put that plan on hold.

AMY GOODMAN: Meanwhile here in this country, last week came, out of the $18.4 billion Congress approved for Iraq’s reconstruction, little over $1 billion has been spent because of violence and other problems. Republican senator, Chuck Hagel of Nebraska called that record, quote, beyond pitiful and embarrassing. He said, it’s now in the zone of dangerous. This is a Republican senator, Hagel, saying the shift in funds shows that the U.S. is in deep trouble.

NAOMI KLEIN: Yeah. I mean, it’s more than the fact that they’re not just — they’re not spending the reconstruction money that was allocated by U.S. taxpayers. It’s that the money that they are spending on U.S. companies is actually Iraqi money. They’re spending far more of Iraq’s own oil money than they are of the 18.6 billion that was allocated and more than that, just last week, the White House asked Congress to transfer $3.5 billion that was supposed to go to water, electricity, and sanitation projects over to security. This is not going to create better security situation. What it’s going to do is feed the same anger that we’re seeing.

AMY GOODMAN: We are talking to author and writer, Naomi Klein. We’re going to transition after our break from Iraq to a new film that she has done with Avi Lewis called The Take. It’s about Argentina. We do this as scores of Heads of States, including the Argentine President, come in to New York for the opening of the U.N. General Assembly. Stay with us.