Yet driving around Baghdad on March 20, the eerie quiet felt like a sign of something else: that symbolic anniversaries are an unaffordable luxury when the war they are supposed to be marking is still being waged. Several demonstrations were planned for the 20th in Baghdad but were cancelled at the last minute a response to three days of rapid fire attacks on Iraqi and foreign civilians.

On March 19, an anti-occupation march designed as a show of unity between Sunni and Shia Muslims was much smaller than organizers hoped, and no wonder: less than three weeks ago, 70 people were killed in a horrific attack on the same Shia mosque where demonstrators were meant to gather. To underscore the threat, U.S. occupation chief Paul Bremer chose the day of the planned protests to predict that more such “major attacks” were likely “when you have masses of Shia together.” Those who dared to show up despite the warnings glanced around nervously, while men armed with Kalashnikovs lined the streets and rooftops, looking for signs of trouble.

It’s worth remembering that just two months ago, the mood here was distinctly less tentative. In January, more than 100,000 Iraqis took to the streets of Baghdad and Basra to reject the U.S. plan to appoint an interim government through a complicated system of regional caucuses, and to demand direct elections instead. Under intense pressure, Bremer was forced to scrap the caucus plan entirely. For a brief moment, it looked as if Bush’s empty talk of bringing democracy to Iraq might just become a reality not because the occupiers were serious about giving Iraqis self-determination, but because Iraqis seemed determined to seize that power despite their occupiers’ best efforts.

Now, after a month of terror and steady assertions from “experts” that Iraq is on the verge of civil war, much of that boldness has retreated. Which is precisely why they call it terrorism: it sends people from the streets into their homes, replacing courage with fear, self-reliance with dependency. There are rare exceptions, such as the recent Spanish elections, when populations seem to collectively decide to try something else — to respond to horror with defiance. But more often than not, terror simply terrorizes.

But if terror sows fear, an obvious point, the obvious question is: who benefits most from the spreading fear in Iraq? According to U.S. President George W. Bush, the winners are faceless evildoers bent on undermining Iraq’s future democracy. “They understand that a free Iraq will be a devastating setback to their ambitions of tyranny over the Middle East,” he explained on the anniversary. And according to Bremer, that means that the attacks will likely continue as the June 30 handover approaches.

It’s a nice theory, but it’s not the one gaining currency on the streets of Baghdad. Just twenty minutes after the devastating bombing of the Mount Lebanon hotel last Wednesday, the rumours began to fly: it was the Americans, the Pentagon, the CIA, the British… If these conspiracy theories have traction, maybe it's because the occupying forces have so brazenly taken advantage of the attacks to do precisely what they accuse foreign terrorist of doing: interfere with the prospect of genuine democracy in Iraq.

When it was only occupation targets getting hit by the resistance soldiers, contractors, police it made the occupation seem inept and out of control, bolstering the argument that the U.S. should pull out and hand over power to Iraqis or a more neutral international force. But now that the targets have clearly expanded to include Iraqi civilians, as well as foreign aid workers and journalists, the White House is attempting to make the Iraqis themselves seem out of control, riven with religious and ethnic hatreds, incapable of governing themselves without U.S. involvement.

With doubt successfully cast on the prospects for Iraqi democracy, and terror attacks ensuring that there are far fewer Iraqis in the streets demanding their democratic rights, Bremer is on the verge of accomplishing what seemed impossible just two months ago: installing an interim Iraqi government that is fully controlled by the U.S.

It now looks almost certain that Iraq’s first “sovereign” government will be created by a process even less democratic than the abandoned caucus system: the U.S.-appointed Iraqi Governing Council will simply be expanded in size. This body is so discredited here that it is called the “governed council,” but widespread objections have so far been drowned out by the nightly attacks.

Bremer has also managed to use the terror attacks to make sure that Iraq’s next government will be able to do nothing but implement his orders. Earlier this month, his plan to push through an interim constitution seemed doomed, with several members of the Governing Council refusing to sign the contentious document. But after the devastating attacks on Shia religious sites on March 2, Iraqi leaders came under pressure to sign the document as a show of national unity and stability.

The interim constitution, signed two weeks ago, states that, “The laws, regulations, orders, and directives issued by the Coalition Provisional Authority… shall remain in force.” These laws include Bremer’s Order 39, which drastically changes Iraq’s previous constitution to allow foreign companies to own 100 per cent of Iraqi assets (except in natural resources), and to take 100 per cent of their profits out of the country, paving the way for massive privatizations.

But defying Bremer’s orders won’t be an option after the “handover”: the interim constitution clearly states that the only way these laws can be changed is by a three-fourths vote “by the Iraqi Transitional Government.” According to the same constitution, that body won’t exist until elections are held in early 2005.

In other words, on June 30, the occupation won’t end, it will simply be outsourced to a group of hand picked Iraqi politicians with no democratic mandate or sovereign power. With its new Iraqi face, the government will be free from the ugly perception that Iraq’s national assets are being auctioned off by foreigners — not to mention being unencumbered by input from Iraqi voters who might have ideas of their own. At the Economic Forum on Iraq conference held in Beirut last week, Nassir al-Jadarji, a member of the Governing Council, assured potential investors that the deals made by these mandate-less politicians will be passed on to Iraq’s future elected leaders. “Our policies toward investments will not change in any form and we assure the complete honoring of signed contracts,” he said. Some wonder why any company would even want to buy up pieces of a country as chaotic and dangerous as Iraq. Perhaps the real question should be: with the Iraqi people living amidst so much chaos and danger, who is going to stop them?

Naomi Klein is a leading anti-sweatshop activist, and author of Fences and Windows: Dispatches from the Front Lines of the Globalization Debate? (Picador, 2002) and No Logo: Taking Aim at the Brand Bullies (Picador, 2000). Visit the No Logo website: www.nologo.org.

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