There is now widespread speculation in the nation's capital that as a result of stubborn Iraqi resistance to the U.S. occupation, American officials have fundamentally altered their plans to "remake" Iraq. Specifically, The Washington Post reported on Sunday, this means "back(ing) away from several of its more ambitious initiatives to transform Iraq's economy, political system and security forces."
"Transforming" Iraq into a completely secular, Western, pluralistic, free-market democracy was never something U.S. occupation forces could hope to accomplish in the near term.
Professional historians may recoil at the simplistic notion, but I believe each society arrives at its present point in history by journeying down a historical path that can never be "transformed" but merely redirected. My instincts tell me that one country cannot be "airlifted" or "transported" to another point in history by another country, no matter how great that country's political, economic and militarily prowess - absent what we accomplished post-World War II.
Our goal in Iraq should have been what Hernando de Soto and I have called a 21st Century Marshall Plan for the whole region. It should not be to "transform" anything but simply to throw a couple of the right switches on the historical track to allow the new Iraqi government to head out along a new path of democratic development. Therefore, our giving up plans to withhold Iraqi sovereignty until a new constitution was drafted to our liking is a very wise decision. Also, working out the thorny relationship between secular political power and Islamic religious authority is something that prudence dictates can only be done by the Iraqis themselves as they come to realize that Sunni, Shi'ah and Kurd all share in the future of Iraq.
The key to economic reform and development in Iraq, therefore, is not to privatize everything immediately but rather to leave the switch to private property rights and free markets open. But there is one important switch to private property and free markets that can be thrown open immediately - privatization of the oil industry the right way.