Meanwhile, in the midst of the wave of neo-Keynesian epiphanies, Iraq was. .h.i.t with the boldest attempt at crisis exploitation yet. In December 2006, the bipartisan Iraq Study Group fronted by James Baker issued its long-awaited report. It called for the U.S. to "a.s.sist Iraqi leaders to reorganize the national oil industry as a commercial enterprise" and to "encourage investment in Iraq's oil sector by the international community and by international energy companies."41 Most of the Iraq Study Group's recommendations were ignored by the White House, but not this one: the Bush administration immediately pushed ahead by helping to draft a radical new oil law for Iraq, which would allow companies like Sh.e.l.l and BP to sign thirty-year contracts in which they could keep a large share of Iraq's oil profits, amounting to tens or even hundreds of billions of dollars -unheard of in countries with as much easily accessible oil as Iraq, and a sentence to perpetual poverty in a country where 95 percent of government revenues come from oil.42 This was a proposal so wildly unpopular that even Paul Bremer had not dared make it in the first year of occupation. Yet it was coming up now, thanks to deepening chaos. Explaining why it was justified for such a large percentage of the profits to leave Iraq, the oil companies cited the security risks. In other words, it was the disaster that made the radical proposed law possible. This was a proposal so wildly unpopular that even Paul Bremer had not dared make it in the first year of occupation. Yet it was coming up now, thanks to deepening chaos. Explaining why it was justified for such a large percentage of the profits to leave Iraq, the oil companies cited the security risks. In other words, it was the disaster that made the radical proposed law possible.

Washington's timing was extremely revealing. At the point when the law was pushed forward, Iraq was facing its most profound crisis to date: the country was being torn apart by sectarian conflict with an average of one thousand Iraqis killed every week. Saddam Hussein had just been put to death in a depraved and provocative episode. Simultaneously, Bush was unleashing his "surge" of troops in Iraq, operating with "less restricted" rules of engagement. Iraq in this period was far too volatile for the oil giants to make major investments, so there was no pressing need for a new law-except to use the chaos to bypa.s.s a public debate on the most contentious issue facing the country. Many elected Iraqi legislators said they had no idea that a new law was even being drafted, and had certainly not been included in shaping its outcome. Greg Mutt.i.tt, a researcher with the oil-watch group Platform, reported. "I was recently at a meeting of Iraqi MPs and asked them how many of them had seen the law. Out of 20, only one MP had seen it." According to Mutt.i.tt, if the law was pa.s.sed, Iraqis "would lose out ma.s.sively because they don't have the capacity at the moment to strike a good deal."43 Iraq's main labor unions declared that "the privatization of oil is a red line that may not be crossed" and, in a joint statement, condemned the law as an attempt to seize Iraq's "energy resources at a time when the Iraqi people are seeking to determine their own future while still under conditions of occupation."44 The law that was finally adopted by Iraq's cabinet in February 2007 was even worse than antic.i.p.ated: it placed no limits on the amount of profits that foreign companies can take from the country and made no specific requirements about how much or how little foreign investors would partner with Iraqi companies or hire Iraqis to work in the oil fields. Most brazenly, it excluded Iraq's elected parliamentarians from having any say in the terms for future oil contracts. Instead, it created a new body, the Federal Oil and Gas Council, which, according to The law that was finally adopted by Iraq's cabinet in February 2007 was even worse than antic.i.p.ated: it placed no limits on the amount of profits that foreign companies can take from the country and made no specific requirements about how much or how little foreign investors would partner with Iraqi companies or hire Iraqis to work in the oil fields. Most brazenly, it excluded Iraq's elected parliamentarians from having any say in the terms for future oil contracts. Instead, it created a new body, the Federal Oil and Gas Council, which, according to The New York Times, The New York Times, would be advised by "a panel of oil experts from inside and outside Iraq." This unelected body, advised by unspecified foreigners, would have ultimate decision-making power on all oil matters, with the full authority to decide which contracts Iraq did and did not sign. In effect, the law called for Iraq's publicly owned oil reserves, the country's main source of revenues, to be exempted from democratic control and run instead by a powerful, wealthy oil dictatorship, which would exist alongside Iraq's broken and ineffective government. would be advised by "a panel of oil experts from inside and outside Iraq." This unelected body, advised by unspecified foreigners, would have ultimate decision-making power on all oil matters, with the full authority to decide which contracts Iraq did and did not sign. In effect, the law called for Iraq's publicly owned oil reserves, the country's main source of revenues, to be exempted from democratic control and run instead by a powerful, wealthy oil dictatorship, which would exist alongside Iraq's broken and ineffective government.45 It's hard to overstate the disgrace of this attempted resource grab. Iraq's oil profits are the country's only hope of financing its own reconstruction when some semblance of peace returns. To lay claim to that future wealth in a moment of national disintegration was disaster capitalism at its most shameless.

There was another, little discussed, consequence of the chaos in Iraq: the longer it wore on, the more privatized the foreign presence became, ultimately forging a new paradigm for the way wars are fought and how human catastrophes are responded to.

This is where the ideology of radical privatization at the heart of the anti-Marshall Plan paid off handsomely. The Bush administration's steadfast refusal to staff the war in Iraq-whether with troops or with civilian administrators under its control-had some very clear benefits for its other war, the one to outsource the U.S. government. This crusade, while it ceased to be the subject of the administration's public rhetoric, has remained a driving obsession behind the scenes, and it has been far more successful than all the administration's more public battles combined.

Because Rumsfeld designed the war as a just-in-time invasion, with soldiers there to provide only core combat functions, and because he eliminated fifty-five thousand jobs in the Department of Defense and the Department of Veterans Affairs in the first year of the Iraq deployment, the private sector was left to fill in the gaps at every level.46 In practice, what this configuration meant was that, as Iraq spiraled into turmoil, an ever more elaborate privatized war industry took shape to prop up the bare-bones army-whether on the ground in Iraq or back home treating soldiers at the Walter Reed Medical Center. In practice, what this configuration meant was that, as Iraq spiraled into turmoil, an ever more elaborate privatized war industry took shape to prop up the bare-bones army-whether on the ground in Iraq or back home treating soldiers at the Walter Reed Medical Center.

Since Rumsfeld steadfastly rejected all solutions that required increasing the size of the army, the military had to find ways to get more soldiers into combat roles. Private security companies flooded into Iraq to perform functions that had previously been done by soldiers-providing security for top officials, guarding bases, escorting other contractors. Once they were there, their roles expanded further in response to the chaos. Blackwater's original contract in Iraq was to provide private security for Bremer, but a year into the occupation, it was engaging in all-out street combat. During the April 2004 uprising of Moqtada al-Sadr's movement in Najaf, Blackwater actually a.s.sumed command over active-duty U.S. marines in a daylong battle with the Mahdi Army, during which dozens of Iraqis were killed.47 At the start of the occupation, there were an estimated ten thousand private soldiers in Iraq, already far more than during the first Gulf War. Three years later, a report by the U.S. Government Accountability Office found that there were forty-eight thousand private soldiers, from around the world, deployed in Iraq. Mercenaries represented the largest contingent of soldiers after the U.S. military-more than all the other members of the "Coalition of the Willing" combined. The "Baghdad boom," as it was called in the financial press, took what was a frowned-upon, shadowy sector and fully incorporated it into the U.S. and U.K. war-fighting machines. Blackwater hired aggressive Washington lobbyists to erase the word "mercenary" from the public vocabulary and turn its company into an ail-American brand. According to its CEO, Erik Prince, "This goes back to our corporate mantra: We're trying to do for the national security apparatus what FedEx did for the postal service."48 When the war moved inside the jails, the military was so short on trained interrogators and Arabic translators that it couldn't get information out of its new prisoners. Desperate for more interrogators and translators, it turned to the defense contractor CACI International Inc. In its original contract, CACI's role in Iraq was to provide information technology services to the military, but the wording of the work order was vague enough that "information technology" could be stretched to mean interrogation.49 The flexibility was intentional: CACI is part of a new breed of contractor that acts as a temp agency for the federal government-it has ongoing, loosely worded contracts and keeps large numbers of potential workers on call, ready to fill whatever positions come up. Calling CACI, whose workers did not need to meet the rigorous training and security clearances required of government employees, was as easy as ordering new office supplies; dozens of new interrogators arrived in a flash. The flexibility was intentional: CACI is part of a new breed of contractor that acts as a temp agency for the federal government-it has ongoing, loosely worded contracts and keeps large numbers of potential workers on call, ready to fill whatever positions come up. Calling CACI, whose workers did not need to meet the rigorous training and security clearances required of government employees, was as easy as ordering new office supplies; dozens of new interrogators arrived in a flash.52 The corporation that gained most from the chaos was Halliburton. Before the invasion, it had been awarded a contract to put out oil fires set by Saddam's retreating armies. When those fires did not materialize, Halliburton's contract was stretched to include a new function: providing fuel for the entire nation, a job so big that "it bought up every available tanker truck in Kuwait, and imported hundreds more."50 In the name of freeing up soldiers for the battlefield, Halliburton took on dozens more of the army's traditional functions, including maintaining army vehicles and radios. In the name of freeing up soldiers for the battlefield, Halliburton took on dozens more of the army's traditional functions, including maintaining army vehicles and radios.

Even recruiting, long since seen as the job of soldiers, rapidly became a for-profit business as the war wore on. By 2006, new soldiers were being recruited by private head-hunting firms such as Serco or a division of the weapons giant L-3 Communications. The private recruiters, many of whom had never sewed in the military, were paid bonuses every time they signed up a soldier, so, one company spokesperson bragged, "If you want to eat steak, you have to put people in the army."51 Rumsfeld's reign also fueled a boom in outsourced training: companies such as Cubic Defense Applications and Blackwater ran soldiers through live combat training and war games, bringing them to privately owned training facilities, where they practiced house-to-house combat in simulated villages. Rumsfeld's reign also fueled a boom in outsourced training: companies such as Cubic Defense Applications and Blackwater ran soldiers through live combat training and war games, bringing them to privately owned training facilities, where they practiced house-to-house combat in simulated villages.

And thanks to Rumsfeld's privatization obsession, as he first suggested in his speech on September 10, 2001, when soldiers came home sick or suffering from posttraumatic stress, they were treated by private health care companies for whom the trauma-heavy war in Iraq generated windfall profits. One of these companies, Health Net, became the seventh-strongest performer in the Fortune 500 in 2005, owing largely to the number of traumatized soldiers returning from Iraq. Another was IAP Worldwide Services Inc., which won the contract to take over many of the services at the military hospital Walter Reed. The move to privatize the running of the medical center allegedly contributed to a shocking deterioration in maintenance and care, as more than a hundred skilled federal employees left the facility.52 The greatly expanded role of private companies was never openly debated as a question of policy (much in the way Iraq's proposed oil law suddenly materialized). Rumsfeld did not have to engage in pitched battles with federal employees' unions or high-ranking generals. Instead, it all just happened on the fly in the field, in what the military describes as mission creep. The longer the war wore on, the more it became a privatized war, and soon enough, this was simply the new way of war. Crisis was the enabler of the boom, just as it had been for so many before.

The numbers tell the dramatic story of corporate mission creep. During the first Gulf War in 1991, there was one contractor for every hundred soldiers. At the start of the 2003 Iraq invasion, the ratio had jumped to one contractor for every ten soldiers. Three years into the U.S. occupation, the ratio had reached one to three. Less than a year later, with the occupation approaching its fourth year, there was one contractor for every 1.4 U.S. soldiers. But that figure includes only contractors working directly for the U.S. government, not for other coalition partners or the Iraqi government, and it doesn't account for the contractors based in Kuwait and Jordan who had farmed out their jobs to subcontractors.53 British soldiers in Iraq are already far outnumbered by their countrymen working for private security firms at a ratio of three to one. When Tony Blair announced in February 2007 that he was pulling sixteen hundred soldiers out of Iraq, the press reported instantly that "civil servants hope 'mercenaries' can help fill the gap left behind," with the companies paid directly by the British government. At the same time, the a.s.sociated Press put the number of contractors in Iraq at 120,000, almost equivalent to the number of U.S. troops.54 In scale, this kind of privatized warfare has already overshadowed the United Nations. The UN's budget for peacekeeping in 2006-2007 was $5.25 billion-that's less than a quarter of the $20 billion Halliburton got in Iraq contracts, and the latest estimates are that the mercenary industry alone is worth $4 billion. In scale, this kind of privatized warfare has already overshadowed the United Nations. The UN's budget for peacekeeping in 2006-2007 was $5.25 billion-that's less than a quarter of the $20 billion Halliburton got in Iraq contracts, and the latest estimates are that the mercenary industry alone is worth $4 billion.55 So while the reconstruction of Iraq was certainly a failure for Iraqis and for U.S. taxpayers, it has been anything but for the disaster capitalism complex. Made possible by the September 11 attacks, the war in Iraq represented nothing less than the violent birth of a new economy. This was the genius of Rumsfeld's "transformation" plan: since every possible aspect of both destruction and reconstruction has been outsourced and privatized, there's an economic boom when the bombs start falling, when they stop and when they start up again -a closed profit-loop of destruction and reconstruction, of tearing down and building up. For companies that are clever and farsighted, like Halliburton and the Carlyle Group, the destroyers and rebuilders are different divisions of the same corporations.5356 The Bush administration has taken several important and little-examined measures to inst.i.tutionalize the privatized warfare model forged in Iraq, making it a permanent fixture of foreign policy. In July 2006, Bowen, the inspector general for Iraq reconstruction, issued a report on "lessons learned" from the various contractor debacles. It concluded that the problems stemmed from insufficient planning and called for the creation of "a deployable reserve corps of contracting personnel who are trained to execute rapid relief and reconstruction contracting during contingency operations" and to "pre-qualify a diverse pool of contractors with expertise in specialized reconstruction areas"-in other words, a standing contractor army. In his 2007 State of the Union address, Bush championed the idea, announcing the creation of a brand-new civilian reserve corps. "Such a corps would function much like our military reserve. It would ease the burden on the Armed Forces by allowing us to hire civilians with critical skills to serve on missions abroad when America needs them," he said. "It would give people across America who do not wear the uniform a chance to serve in the defining struggle of our time."57 A year and half into the Iraq occupation, the U.S. State Department launched a new branch: the Office of Reconstruction and Stabilization. On any given day, it is paying private contractors to draw up detailed plans to reconstruct twenty-five different countries that may, for one reason or another, find themselves the target of U.S.-sponsored destruction, from Venezuela to Iran. Corporations and consultants are lined up on "presigned contracts" so that they are ready to leap into action as soon as disaster strikes. A year and half into the Iraq occupation, the U.S. State Department launched a new branch: the Office of Reconstruction and Stabilization. On any given day, it is paying private contractors to draw up detailed plans to reconstruct twenty-five different countries that may, for one reason or another, find themselves the target of U.S.-sponsored destruction, from Venezuela to Iran. Corporations and consultants are lined up on "presigned contracts" so that they are ready to leap into action as soon as disaster strikes.58 For the Bush administration, it was a natural evolution: after claiming it had a right to cause unlimited preemptive destruction, it then pioneered preemptive reconstruction -rebuilding places that have not yet been destroyed. For the Bush administration, it was a natural evolution: after claiming it had a right to cause unlimited preemptive destruction, it then pioneered preemptive reconstruction -rebuilding places that have not yet been destroyed.

So in the end, the war in Iraq did create a model economy-it was just not the Tiger on the Tigris that the neocons had advertised. Instead, it was a model for privatized war and reconstruction-a model that quickly became export-ready. Until Iraq, the frontiers of the Chicago crusade had been bound by geography: Russia, Argentina, South Korea. Now a new frontier can open up wherever the next disaster strikes.

PART 7.

THE MOVABLE GREEN ZONE.

BUFFER ZONES AND BLAST WALLS.

Because you are able to start new, you can start fundamentally at the leading edge, which is a very good thing. It is a privilege for you to have that opportunity, because there are other places that haven't had such systems or are burdened with systems that are a hundred or two hundred years old. In a way, this is an advantage for Afghanistan to start anew with the best ideas and the best technical knowledge.

-Paul O'Neill, U.S. Treasury secretary, November 2002, in postinvasion Kabul

CHAPTER 19.

BLANKING THE BEACH.

"THE SECOND TSUNAMI".

The tsunami that cleared the sh.o.r.eline like a giant bulldozer has presented developers with an undreamed-of opportunity, and they have moved quickly to seize it.

-Seth Mydans, International Herald Tribune, International Herald Tribune, March 10, 2005 March 10, 200554.

being held up by the governments reconstruction team as the showcase for its plans to "build back better."

That's where we met Roger, who gave us, after only a few minutes, a very different version. He called it "a plan to drive the fishing people from the beach." He claimed that this ma.s.s eviction plan long predated the giant wave, but the tsunami, like so many other disasters, was being harnessed to push through a deeply unpopular agenda. For fifteen years, Roger told us, his family had spent fishing season in a thatched hut on the beach in Arugam Bay, near where we were sitting. Along with dozens of other fishing families, they had kept their boats beside their huts and dried their catch on banana leaves in the fine white sand. They mingled easily with tourists, most of whom were Australian and European surfers staying in hostels along the beach, the kind of place with ratty hammocks out front and London club music playing on speakers lodged in palm trees. The restaurants bought fish straight off the boats, and the fishing people, with their colorful traditional lifestyles, provided just the splash of authenticity most rugged travelers were looking for.

For a long time, there was no particular conflict between the hotels and the fishing people in Arugum Bay, in part because the ongoing civil war in Sri Lanka ensured that neither industry could grow beyond a small scale. The east coast of Sri Lanka saw some of the worst of the fighting as it was claimed by both sides-the Liberation Tigers of Tamil Eelam (known as the Tamil Tigers) in the North, and the Sinhalese central government in Colombo-but was never fully controlled by either. Reaching Arugam Bay required navigating a maze of checkpoints and running the risk of getting caught in a shootout or a suicide bombing (the Tamil Tigers are credited with having invented the exploding suicide belt). All the guidebooks contained stern warnings about steering clear of Sri Lanka's volatile east coast; the wave breaks were notoriously good, but only worth the trouble for the seriously hard core.

The breakthrough came in February 2002, when Colombo and the Tigers signed a cease-fire agreement. It wasn't exactly peace but more like a taut pause in the action, one punctured by the occasional bombing or a.s.sa.s.sination. Despite this precarious state, as soon as the roads were opened, the guidebooks began pumping up the east coast as the next p.h.u.ket: great surfing, beautiful beaches, funky hotels, spicy food, full-moon raves... "a hot party spot," according to Lonely Planet Lonely PlanetAnd Arugam Bay was the center of the action. At the same time, the opening of checkpoints meant that fishing people from around the country could return in large numbers to some of the most plentiful waters along the eastern coast, including Arugam Bay.

The beach was getting crowded. Arugam Bay was zoned as a fishing port, but local hotel owners began complaining that the huts blocked their views, that the fragrance of drying fish turned off their customers (one hotelier, a Dutch expat, told me that "there is such a thing as smell pollution"). Some of the hoteliers started lobbying the local government to relocate the boats and fishing huts to a different bay, one less popular with foreigners. The villagers pushed back, pointing out that they had been living on these lands for generations, and that Arugam Bay was more than a boat launch -it was fresh water and electricity, schools for their children and buyers for their catch.

These tensions threatened to explode six months before the tsunami hit, when there was a mysterious fire on the beach in the middle of the night. Twenty-four fishing huts were reduced to ash. Roger and his family, he told me, "lost everything, our belongings, our nets and ropes." k.u.mari and I spoke with many fishing people in Arugam Bay, and all insisted that the fire was arson. They blamed the hotel owners, who obviously wanted the beach to themselves.

But if the fire really was a bid to scare off the fishing people, it didn't work; the villagers became more determined than ever to stay, and the people who lost their huts quickly rebuilt.

When the tsunami came, it did what the fire couldn't: it cleared the beach completely. Every single fragile structure was washed away-every boat, every fishing hut, as well as every tourist cabana and bungalow. In a community of only 4,000, about 350 were killed, most of them people like Roger, Ivan and Jenita, who make their living from the sea.4 And yet, underneath the rubble and the carnage was what the tourism industry had been angling for all along-a pristine beach, scrubbed clean of all the messy signs of people working, a vacation Eden. It was the same up and down the coast: once the rubble was cleared away, what was left was. . . paradise. And yet, underneath the rubble and the carnage was what the tourism industry had been angling for all along-a pristine beach, scrubbed clean of all the messy signs of people working, a vacation Eden. It was the same up and down the coast: once the rubble was cleared away, what was left was. . . paradise.

When the emergency subsided and fishing families returned to the spots where their homes once stood, they were greeted by police who forbade them to rebuild. "New rules," they were told -no homes on the beach, and everything had to be at least two hundred meters back from the high-water mark. Most would have accepted building farther from the water, but there was no available land there, leaving the fishing people with nowhere to go. And the new "buffer zone" was being imposed not only in Arugam Bay but along the entire east coast. The beaches were off-limits.

The tsunami killed approximately thirty-five thousand Sri Lankans and displaced nearly a million. Small-boat fishing people like Roger made up 80 percent of the victims; in some areas the number was closer to 98 percent. In order to receive food rations and small relief allowances, hundreds of thousands of people moved away from the beach and into temporary camps inland, many of them long, grim barracks made of tin sheet that trapped the heat so unbearably that many abandoned them to sleep outside. As time dragged on, the camps became dirty and disease ridden and were patrolled by menacing, machine-gun-wielding soldiers.

Officially, the government said the buffer zone was a safety measure, meant to prevent a repeat of the devastation should another tsunami strike. On the surface it made sense, but there was a glaring problem with that rationale -it was not being applied to the tourism industry. On the contrary, hotels were being encouraged to expand onto the valuable oceanfront where fishing people had lived and worked. Resorts were completely exempted from the buffer-zone rule-as long as they cla.s.sified their construction, no matter how elaborate or close to the water, as "repair," they were free and clear. So all along the beach in Arugam Bay, construction workers hammered and drilled. "Don't tourists have to fear a tsunami?" Roger wanted to know.

To him and his colleagues, the buffer zone looked like little more than an excuse for the government to do what it had wanted to do before the wave: clear the beach of fishing people. The catch they used to pull from the waters had been enough to sustain their families, but it did not contribute to economic growth as measured by inst.i.tutions like the World Bank, and the land where their huts once stood could clearly be put to more profitable use. Shortly before I arrived, a doc.u.ment called the "Arugam Bay Resource Development Plan" was leaked to the press, and it confirmed the fishing community's worst fears. The federal government had commissioned a team of international consultants to develop a reconstruction blueprint for Arugam Bay, and this plan was the result. Even though it had been only the beachfront properties that were damaged by the tsunami, with most of the town still standing, it called for Arugam Bay to be leveled and rebuilt, transformed from a hippie-charming seaside town into a high-end "boutique tourism destination"-five-star resorts, luxury $300-a-night ecotourism chalets, a floatplane pier and a helipad. The report enthused that Arugam Bay was to serve as a model for up to thirty new nearby "tourism zones," turning the previously war-torn east coast of Sri Lanka into a South Asian Riviera.5 Missing from all the artists' impressions and blueprints were the victims of the tsunami-the hundreds of fishing families who used to live and work on the beach. The report explained that villagers would be moved to more suitable locations, some several kilometers away and far from the ocean. Making matters worse, the $80 million redevelopment project was to be financed with aid money raised in the name of the victims of the tsunami.

It was the weeping faces of these fishing families and others like them in Thailand and Indonesia that had triggered the historic outpouring of international generosity after the tsunami -it had been their relatives piled up in mosques, their wailing mothers trying to identify a drowned baby, their children swept to sea. Yet for communities like Arugam Bay, the "reconstruction" meant nothing less than the deliberate destruction of their culture and way of life and the theft of their land. As k.u.mari said, the entire reconstruction process would result in "victimizing the victims, exploiting the exploited."

When the plan got out, it sparked outrage across the country, and nowhere more than in Arugam Bay. As soon as we arrived in town, k.u.mari and I stumbled into a crowd of several hundred demonstrators dressed in a kaleidoscopic mix of saris, sarongs, hijabs and flip-flops. They were gathered on the beach and were just beginning a march that would pa.s.s in front of the hotels, then on to the neighboring town of Pottuvil, home of the local government.

As they marched past the hotels, a young man in a white T-shirt with a red megaphone led the demonstrators in a call-and-response. "We don't want, we don't want. . ." he called out, and the crowd shouted back, "Tourist hotels!" Then he shouted, "Whites. . ." and they cried, "Get out!" (k.u.mari translated from Tamil with apologies.) Another young man, skin toughened by the sun and the ocean, took over megaphone duties and yelled, "We do do want, we want, we do do want. . ." and the answers came flying: "Our land back!" "Our homes back!" "A fishing port!" "Our aid money!" "Famine, famine!" he shouted, and the crowd replied, "Fisher people are facing famine!" want. . ." and the answers came flying: "Our land back!" "Our homes back!" "A fishing port!" "Our aid money!" "Famine, famine!" he shouted, and the crowd replied, "Fisher people are facing famine!"

Outside the gates of the district government, leaders of the march accused their elected representatives of abandonment, of corruption, of spending aid money meant for the fishing people "on dowries for their daughters and jewelry for their wives." They spoke of special favors handed out to the Sinhalese, of discrimination against Muslims, of the "foreigners profiting from our misery."

It seemed unlikely that their chants would have much effect. In Colombo I spoke with the director general of the Sri Lankan Tourist Board, Seeni-vasagam Kalaiselvam, a middle-aged bureaucrat with a bad habit of quoting from his country's multimillion-dollar "brand personality profile." I asked him what would become of the fishing people in places like Arugam Bay. He leaned back in a rattan chair and explained. "In the past, in the coastal belt, there were a lot of unauthorized establishments. . . not constructed according to the tourism plan. With the tsunami, the good thing that happened to tourism is that most of these unauthorized establishments [have been] affected by the tsunami, and the buildings are no longer there." If fishing people come back and rebuilt, he explained, "We again will be forced to demolish. . . . The beach will be clean."

It hadn't started this way. When k.u.mari first came to the east coast in the days after the tsunami, none of the official aid had arrived yet. That meant everyone was a relief worker, a medic, a gravedigger. The ethnic barriers that had divided this region suddenly melted away. "The Muslim side was running to the Tamil side to bury the dead," she recalled, "and Tamil people were running to the Muslim side to eat and drink. People from the interior of the country were sending two lunch parcels each day from each house, which was a lot because they are very poor. It was not to get anything back; it was just the feeling 'I have to support my neighbor; we have to support the sisters, the brothers, the daughters, the mothers.' Just that."

Similar cross-cultural aid was breaking out across the country. Tamil teenagers drove their tractors from the farms to help find bodies. Christian children donated their school uniforms to be turned into white Muslim funeral shrouds, while Hindu women gave their white saris. It was as if this invasion of salt water and rubble was so humblingly powerful that, in addition to grinding up homes and buckling highways, it also scrubbed away intractable hatreds, blood feuds and the tally of who last killed whom. For k.u.mari, who had done years of frustrating work with peace groups trying to bridge the divides, it was overwhelming to see such tragedy met with such decency. Instead of endlessly talking about peace, Sri Lankans, in their moment of greatest stress, were actually living it.

It also seemed that the country could count on international support for its recovery efforts. At first, the help wasn't coming from governments, which were slow to respond, but from individuals who saw the disaster on TV: schoolchildren in Europe held bake sales and bottle drives, musicians organized star-studded concerts, religious groups collected clothes, blankets and money. Citizens then demanded that their governments match their generosity with official aid. In six months, $13 billion was raised-a world record.6 In the first months, much of the reconstruction money reached its intended recipients: NGOs and aid agencies brought emergency food and water, tents and temporary lean-tos; rich countries sent medical teams and supplies. The camps were built as a stopgap, to give people a roof while permanent homes were constructed. There was certainly enough money to get those homes built. But when I was in Sri Lanka six months later, progress had all but stopped; there were almost no permanent homes, and the temporary camps were starting to look less like emergency shelters and more like entrenched shantytowns.

Aid workers complained that the Sri Lankan government was putting up roadblocks at every turn-first declaring the buffer zone, then refusing to provide alternative land to build on, then commissioning an endless series of studies and master plans from outside experts. As the bureaucrats argued, survivors of the tsunami waited in the sweltering inland camps, living off rations, too far from the ocean to begin fishing again. While the delays were often blamed on "red tape" and poor management, there was in fact far more at stake.

Before the Wave: Foiled Plans

The grand plan to remake Sri Lanka predated the tsunami by two years. It began when the civil war ended and the usual players descended on the country to plot Sri Lanka's entry into the world economy-most prominently USAID, the World Bank and its offshoot the Asian Development Bank. A consensus emerged that Sri Lanka's most significant compet.i.tive advantage lay in the fact that it was one of last places left uncolonized by go-go globalization, a by-product of its long war. For such a small country, Sri Lanka still had a remarkable amount of surviving wildlife-leopards, monkeys, thousands of wild elephants. Its beaches were strangers to high-rises, and its mountains were dotted with Hindu, Buddhist and Muslim temples and holy sites. Best of all, raved USAID, it was "all contained in a s.p.a.ce the size of West Virginia."7 Under the plan, Sri Lanka's jungles, which provided such effective cover for guerrilla fighters, would be opened up to adventure ecotourists, who would ride the elephants and swing like Tarzan through the canopies the way they do in Costa Rica. Its religions, accomplices in so much bloodshed, would be retrofitted to nourish the spiritual needs of Western visitors-Buddhist monks could run meditation centers, Hindu women could perform colorful dances at hotels, Ayurvedic medical clinics could soothe aches and pains.

In short, the rest of Asia could keep the sweatshops, call centers and frenetic stock markets; Sri Lanka would be there waiting when the captains of those industries needed a place to rest up. Precisely because of the enormous wealth created in the other outposts of deregulated capitalism, money would be no object when it came to enjoying the perfectly calibrated combination of luxury and wilderness, adventure and attentive service. Sri Lanka's future, the foreign consultants were convinced, rested with chains like Aman Resorts, which has recently opened two stunning properties on the southern coast, with rooms going for $800 a night and plunge pools in every suite.

The U.S. government was so enthusiastic about Sri Lanka's potential as a high-end tourism destination, with all the possibilities for resort chains and tour operators, that USAID launched a program to organize the Sri Lankan tourism industry into a powerful Washington-style lobby group. It takes credit for increasing the budget for tourism promotion "from less than $500,000 a year up to approximately $10 million a year."8 The U.S. emba.s.sy, meanwhile, launched the Compet.i.tiveness Program, an outpost mandated to advance U.S. economic interests in the country. The program's director, a graying economist named John Varley, told me that he thought the Sri Lanka Tourist Board was thinking small when it talked about attracting a million tourists a year by the end of the decade. "Personally, I think they could double that." Peter Harrold, an Englishman who directs the World Bank operation in Sri Lanka, told me, "I've always thought of Bali as the perfect comparator." The U.S. emba.s.sy, meanwhile, launched the Compet.i.tiveness Program, an outpost mandated to advance U.S. economic interests in the country. The program's director, a graying economist named John Varley, told me that he thought the Sri Lanka Tourist Board was thinking small when it talked about attracting a million tourists a year by the end of the decade. "Personally, I think they could double that." Peter Harrold, an Englishman who directs the World Bank operation in Sri Lanka, told me, "I've always thought of Bali as the perfect comparator."

There is no question that high-end tourism is a bankable growth market. The overall revenues for luxury hotels, where rooms cost an average of $405 a night, went up a rather striking 70 percent between 2001 and 2005 -not bad for a period that included the post-September 11 slump, the war in Iraq and spiraling fuel costs. In many ways, the phenomenal growth of the sector is a by-product of the extreme inequality that resulted from the generalized triumph of Chicago School economics. Regardless of the overall state of the economy, there is now a large enough elite made up of new multi-millionaires and billionaires for Wall Street to see the group as "superconsumers," able to carry consumer demand all on their own. Ajay Kapur, the former head of Citigroup Smith Barney's global equity strategy group in New York, encourages his clients to invest in his "Plutonomy basket" of stocks, featuring companies like Bulgari, Porsche, Four Seasons and Sotheby's. "If plutonomy continues, which we think it will, if income inequality is allowed to persist and widen, the plutonomy basket should continue to do very well."9 But before Sri Lanka could fulfill its destiny as a playground for the plutonomy set, there were a few areas that needed some drastic improvements-fast. First off, to attract top-notch resorts, the government had to drop the barriers to private land ownership (roughly 80 percent of Sri Lanka's land was owned by the state).10 It needed more "flexible" labor laws under which investors would staff their resorts. And it needed to modernize its infrastructure-highways, sw.a.n.k airports, better water and electricity systems. However, since Sri Lanka had driven itself deep into debt buying weapons, the government could not pay for all these rapid upgrades on its own. The usual deals were on offer: loans from the World Bank and IMF in exchange for agreements to open the economy to privatization and "public-private partnerships." It needed more "flexible" labor laws under which investors would staff their resorts. And it needed to modernize its infrastructure-highways, sw.a.n.k airports, better water and electricity systems. However, since Sri Lanka had driven itself deep into debt buying weapons, the government could not pay for all these rapid upgrades on its own. The usual deals were on offer: loans from the World Bank and IMF in exchange for agreements to open the economy to privatization and "public-private partnerships."

All these plans and terms were neatly laid out in Regaining Sri Lanka, Regaining Sri Lanka, the country's World Bank-approved shock therapy program finalized in early 2003. Its prime local advocate was a Sri Lankan politician/entrepreneur named Mano t.i.ttawella, a man who bears a striking resemblance to Newt Gingrich, both physically and ideologically. the country's World Bank-approved shock therapy program finalized in early 2003. Its prime local advocate was a Sri Lankan politician/entrepreneur named Mano t.i.ttawella, a man who bears a striking resemblance to Newt Gingrich, both physically and ideologically.11 Like all such shock therapy plans, Regaining Sri Lanka Regaining Sri Lanka demanded many sacrifices in the name of kick-starting rapid economic growth. Millions of people would have to leave traditional villages to free up the beaches for tourists and the land for resorts and highways. What fishing remained would be dominated by large industrial trawlers operating out of deep ports-not wooden boats that launch from the beaches. demanded many sacrifices in the name of kick-starting rapid economic growth. Millions of people would have to leave traditional villages to free up the beaches for tourists and the land for resorts and highways. What fishing remained would be dominated by large industrial trawlers operating out of deep ports-not wooden boats that launch from the beaches.12 And of course, as has been the case in similar circ.u.mstances from Buenos Aires to Baghdad, there would be ma.s.s layoffs at state companies, and the prices of services would have to go up. And of course, as has been the case in similar circ.u.mstances from Buenos Aires to Baghdad, there would be ma.s.s layoffs at state companies, and the prices of services would have to go up.

The problem for the plan's advocates was that many Sri Lankans simply didn't believe that the sacrifices would pay off. This was 2003, and the starry-eyed faith in globalization had long since been extinguished, especially after the horrors of the Asian economic crisis. The legacy of war also proved to be an obstacle. Tens of thousands of Sri Lankans had lost their lives in the conflict in the name of "nation," "homeland" and "territory." Now, when peace had finally arrived, the poorest among them were being asked to give up the little plots of land and property they had -a vegetable garden, a simple house, a boat-so that a Marriott or a Hilton could build a golf course (and villagers could pursue careers as street hawkers in Colombo). It seemed like a lousy deal, and Sri Lankans responded accordingly.

Regaining Sri Lanka was rejected first through a wave of militant strikes and street protests, then, decisively, at the polls. In April 2004, Sri Lankans defied all the foreign experts and their local partners and voted in a coalition of center-leftists and self-identified Marxists who vowed to sc.r.a.p the entire was rejected first through a wave of militant strikes and street protests, then, decisively, at the polls. In April 2004, Sri Lankans defied all the foreign experts and their local partners and voted in a coalition of center-leftists and self-identified Marxists who vowed to sc.r.a.p the entire Regaining Sri Lanka Regaining Sri Lanka plan. plan.13 At the time, many of the key privatization schemes had not yet gone through, including water and electricity, and the highway projects were being challenged in court. For those dreaming of building a plutonomy playground, it was a major setback: 2004 was supposed to have been Year One of the new investor-friendly, privatized Sri Lanka; now all bets were off. At the time, many of the key privatization schemes had not yet gone through, including water and electricity, and the highway projects were being challenged in court. For those dreaming of building a plutonomy playground, it was a major setback: 2004 was supposed to have been Year One of the new investor-friendly, privatized Sri Lanka; now all bets were off.

Eight months after those fateful elections, the tsunami hit. Among those mourning the demise of Regaining Sri Lanka, Regaining Sri Lanka, the significance of the event was understood immediately. The newly elected government would need billions from foreign creditors to reconstruct the homes, roads, schools and railways destroyed in the storm-and those creditors knew well that when faced with a devastating crisis, even the most committed economic nationalists suddenly become flexible. As for the militant farmers and fishing people who had blocked roadways and staged ma.s.s rallies to derail their previous attempts to clear the land for development, well, Sri Lanka's villagers were otherwise occupied at the moment. the significance of the event was understood immediately. The newly elected government would need billions from foreign creditors to reconstruct the homes, roads, schools and railways destroyed in the storm-and those creditors knew well that when faced with a devastating crisis, even the most committed economic nationalists suddenly become flexible. As for the militant farmers and fishing people who had blocked roadways and staged ma.s.s rallies to derail their previous attempts to clear the land for development, well, Sri Lanka's villagers were otherwise occupied at the moment.

After the Wave: A Second Chance

In Colombo, the national government moved instantly to prove to the wealthy countries who control the aid dollars that it was ready to renounce its past. President Chandrika k.u.maratunga, elected on an overtly antipriva-tization platform, claimed that the tsunami had been, for her, a kind of religious epiphany, helping her to see the free-market light. She traveled to the storm-ravaged coast and, standing amid the rubble, announced, "We are a country blessed with so many natural resources, and we have not made use of them fully. ... So nature itself must have thought 'enough is enough' and whacked us from all sides and taught us a lesson to be together."14 It was a novel interpretation-the tsunami as divine punishment for failing to sell off Sri Lanka's beaches and forests. It was a novel interpretation-the tsunami as divine punishment for failing to sell off Sri Lanka's beaches and forests.

The penance began immediately. Just four days after the wave hit, her government pushed a bill through that paved the way for water privatization, a plan citizens had been forcefully resisting for years. Of course now, with the country still swamped with sea water and graves not yet dug, few even knew it had happened -much like the timing of Iraq's new oil law. The government also chose this moment of extreme hardship to make life even harder by raising the price of gasoline -a move designed to send lenders an unmistakable message about Colombo's fiscal responsibility. It also began developing legislation to break up the national electricity company, with plans to open it up to the private sector.15 Herman k.u.mara, the head of Sri Lanka's National Fisheries Solidarity Movement, which represents the small boats, referred to the reconstruction as "a second tsunami of corporate globalization." He saw it as a deliberate attempt to exploit his const.i.tuents when they were most injured and weakened -as pillage follows war, so this second tsunami rushed in after the first. "People were vehemently opposed to these policies in the past," he told me. "But now they are starving in the camps, and they are just thinking about how to survive the next day-they don't have a place to sleep, they don't have a place to be, they have lost their source of income, they have no idea how they will feed themselves in the future. So it's in that situation that the government pushes ahead with this plan. When people recover, they will find out what had been decided, but by then the damage will already be done."

If the Washington lenders were able to move quickly to exploit the tsunami, it was because they had done something remarkably similar before. The dress rehearsal for posttsunami disaster capitalism took place in a little-examined episode following Hurricane Mitch.

In October 1998, for an entire interminable week, Mitch had parked itself over Central America, lashing the coasts and mountains of Honduras, Guatemala and Nicaragua, swallowing villages whole and killing more than nine thousand people. The already impoverished countries could not dig themselves out without generous foreign aid-and it came, but at a steep price. In the two months after Mitch struck, with the country still knee-deep in rubble, corpses and mud, the Honduran congress pa.s.sed laws allowing the privatization of airports, seaports and highways and fast-tracked plans to privatize the state telephone company, the national electric company and parts of the water sector. It overturned progressive land-reform laws, making it far easier for foreigners to buy and sell property, and rammed through a radically pro-business mining law (drafted by industry) that lowered environmental standards and made it easier to evict people from homes that stood in the way of new mines.16 It was much the same in neighboring countries: in the same two months post-Mitch, Guatemala announced plans to sell off its phone system, and Nicaragua did likewise, along with its electric company and its petroleum sector. According to The Wall Street Journal, The Wall Street Journal, "The World Bank and International Monetary Fund had thrown their weight behind the [telecom] sale, making it a condition for release of roughly $47 million in aid annually over three years and linking it to about $4.4 billion in foreign-debt relief for Nicaragua." "The World Bank and International Monetary Fund had thrown their weight behind the [telecom] sale, making it a condition for release of roughly $47 million in aid annually over three years and linking it to about $4.4 billion in foreign-debt relief for Nicaragua."17 Phone privatization had nothing to do with hurricane reconstruction, of course, except inside the logic of the disaster capitalists at Washington's financial inst.i.tutions. Phone privatization had nothing to do with hurricane reconstruction, of course, except inside the logic of the disaster capitalists at Washington's financial inst.i.tutions.

Over the next few years, the sales went through, often at prices far below market value. The buyers, for the most part, were former state-owned companies from other countries that had been privatized themselves and were now scouring the globe for new purchases that would increase their share prices. Telmex, Mexico's privatized phone company, snapped up Guatemala's telecom company; the Spanish energy company Union Fenosa bought up Nicaragua's energy companies; San Francisco International Airport, now a private company, bought all four Honduran airports. And Nicaragua sold off 40 percent of its telephone company for only $33 million, when PricewaterhouseCoopers had estimated the value at $80 million.18 "Destruction carries with it an opportunity for foreign investment," announced Guatemala's foreign minister on a trip to the World Economic Forum in Davos in 1999. "Destruction carries with it an opportunity for foreign investment," announced Guatemala's foreign minister on a trip to the World Economic Forum in Davos in 1999.19 By the time the tsunami hit, Washington was ready to take the Mitch model to the next level-aiming not just at individual new laws but at direct corporate control over the reconstruction. Any country hit by a disaster on the scale of the 2004 tsunami needs a comprehensive plan for reconstruction, one that will make the wisest use of the influx of foreign aid and ensure that the funds reach their intended recipients. But Sri Lanka's president, under pressure from Washington lenders, decided that the planning could not be entrusted to her government's elected politicians. Instead, just one week after the tsunami leveled the coasts, she created a brand-new body called the Task Force to Rebuild the Nation. This group, and not Sri Lanka's Parliament, would have full power to develop and implement a master plan for a new Sri Lanka. The task force was made up of the country's most powerful business executives from banking and industry. And not just any industry-five of the ten members of the task force had direct holdings in the beach tourism sector, representing some of the largest resorts in the country.20 There was no one from the fishing or farming sectors on the task force, not a single environmental expert or scientist or even a disaster-reconstruction specialist. The chair was Mano t.i.ttawella, the former privatization czar. "This is an opportunity to build a model nation," he declared. There was no one from the fishing or farming sectors on the task force, not a single environmental expert or scientist or even a disaster-reconstruction specialist. The chair was Mano t.i.ttawella, the former privatization czar. "This is an opportunity to build a model nation," he declared.21 The creation of the task force represented a new kind of corporate coup d'etat, one achieved through the force of a natural disaster. As in so many other countries, in Sri Lanka, Chicago School policies had been blocked by the normal rules of democracy; the 2004 elections proved that. But with the country's citizens pulling together to meet a national emergency, and politicians desperate to unlock aid money, the express wishes of voters could be summarily brushed aside and replaced with direct unelected rule by industry-a first for disaster capitalism.

Somehow, in only ten days, and without leaving the capital, the business leaders on the task force were able to draft a complete national reconstruction blueprint, from housing to highways. It was this plan that called for the buffer zones and that kindly exempted hotels. The task force also redirected the aid money to the superhighways and industrial fishing ports that had met so much resistance before the catastrophe. "We see this economic agenda as a bigger disaster than the tsunami, which is why we had been fighting so hard to prevent it before and why we defeated it in the last elections," Sarath Fernando, a Sri Lankan land-rights activist told me. "But now, just three weeks after the tsunami, they give us the same plan. It's obvious that they had it all ready to go before."55 Washington backed up the task force with the kind of reconstruction aid that was by now familiar from Iraq: megacontracts to its own companies. CH2M Hill, the engineering and construction giant from Colorado, had been awarded $28.5 million to oversee other major contractors in Iraq. Despite its central role in the Baghdad reconstruction debacle, it was given an additional $33 million contract in Sri Lanka (later expanded to $48 million), primarily to work on three deep-water harbors for industrial fishing fleets and to build a new bridge to Arugam Bay, part of the plan to turn the town into a "tourist paradise."22 Both of these programs -carried out in the name of tsunami relief-were disastrous for the primary victims of the tsunami, since the trawlers scooped up their fish, and the hotels didn't want them on the beach. As k.u.mari put it, "It's not just that the 'aid' isn't aiding, it is that it is hurting." Both of these programs -carried out in the name of tsunami relief-were disastrous for the primary victims of the tsunami, since the trawlers scooped up their fish, and the hotels didn't want them on the beach. As k.u.mari put it, "It's not just that the 'aid' isn't aiding, it is that it is hurting."

When I asked him why the U.S. government was spending its aid money on projects that ensured the displacement of tsunami survivors, John Varley, director of USAID's Compet.i.tiveness Program, explained that "you don't want to restrict the aid so it only goes to tsunami victims. . . . Let it be for the benefit of all Sri Lanka; let it contribute to growth." Varley compared the plan to an elevator in a high-rise building: on the first trip it picks up one group of pa.s.sengers and takes them to the top, where they create wealth that allows the elevator to go back down and pick more people up. The people waiting at the bottom have to know that the elevator will be back for them too -eventually.

The only direct money that the U.S. government was spending on small-scale fishing people was a $1 million grant to "upgrade" the temporary shelters where they were being warehoused while the beaches were redeveloped.23 It was a good indication that the tin-and-particle-board shelters were temporary in name only; that they were indeed destined to become permanent shantytowns-the kind that ring most major cities in the global South. There are no great relief drives to help the people who live in those slums, of course, but the tsunami victims were supposed to be different. The world watched them lose their homes and livelihoods on live TV, and the arbitrariness of their fate provoked a visceral, global feeling that what was lost needed and deserved to be replaced -not through trickle-down economics, but directly, with hand-to-hand aid. But the World Bank and USAID understood something that most of us did not: that soon enough, the distinctiveness of the tsunami survivors would fade and they would melt into the billions of faceless poor worldwide, so many of whom already live in tin shacks without water. The proliferation of these shacks has become as much an accepted feature of the global economy as the explosion of $800-a-night hotels. It was a good indication that the tin-and-particle-board shelters were temporary in name only; that they were indeed destined to become permanent shantytowns-the kind that ring most major cities in the global South. There are no great relief drives to help the people who live in those slums, of course, but the tsunami victims were supposed to be different. The world watched them lose their homes and livelihoods on live TV, and the arbitrariness of their fate provoked a visceral, global feeling that what was lost needed and deserved to be replaced -not through trickle-down economics, but directly, with hand-to-hand aid. But the World Bank and USAID understood something that most of us did not: that soon enough, the distinctiveness of the tsunami survivors would fade and they would melt into the billions of faceless poor worldwide, so many of whom already live in tin shacks without water. The proliferation of these shacks has become as much an accepted feature of the global economy as the explosion of $800-a-night hotels.

In one of the most desolate inland camps on the southern coast of Sri Lanka, I met a young mother named Renuka, arrestingly beautiful even in rags, and one of the people waiting for Varley's elevator. Her youngest child, a girl, was six months old, born two days after the tsunami. Renuka had summoned superhuman strength to grab both of her boys and run, nine months pregnant and in water up to her neck, away from the wave. Yet after this extraordinary feat of survival, she and her family were now quietly going hungry on a parched piece of land in the middle of nowhere. A couple of canoes, donated by a well-meaning NGO, made a pitiful sight: three kilometers from the water, and with not even a bicycle for transportation, they were little more than a cruel reminder of a former life. She asked us to carry a message to everyone who was trying to help the tsunami survivors. "If you have something for me," she said, "put it in my hand."

The Wider Wave

Sri Lanka wasn't the only country that got hit by this second tsunami - similar stories of land and law grabs have come out of Thailand, the Maldives, and Indonesia. In India, tsunami survivors in Tamil Nadu were left so impoverished that up to 150 women were driven to sell their kidneys in order to buy food. An aid worker explained to The Guardian The Guardian that the state government "would prefer the coast was used to build hotels, but the result is desperate people." All the tsunami-struck countries imposed "buffer zones" preventing villagers from rebuilding on the coasts, freeing up the land for increased development. (In Aceh, Indonesia, the zones were two kilometers wide, though the government was eventually forced to repeal the edict.) that the state government "would prefer the coast was used to build hotels, but the result is desperate people." All the tsunami-struck countries imposed "buffer zones" preventing villagers from rebuilding on the coasts, freeing up the land for increased development. (In Aceh, Indonesia, the zones were two kilometers wide, though the government was eventually forced to repeal the edict.)24 A year after the tsunami, the respected NGO ActionAid, which monitors foreign aid spending, published the results of an extensive survey of fifty thousand tsunami survivors in five countries. The same patterns repeated everywhere: residents were barred from rebuilding, but hotels were showered with incentives; temporary camps were miserable militarized holding pens, and almost no permanent reconstruction had been done; entire ways of life were being extinguished. It concluded that the setbacks could not be chalked up to the usual villains of poor communication, underfunding or corruption. The problems were structural and deliberate: "Governments have largely failed in their responsibility to provide land for permanent housing," the report concluded. "They have stood by or been complicit as land has been grabbed and coastal communities pushed aside in favour of commercial interests."25 When it came to posttsunami opportunism, however, nowhere compared with the Maldives, perhaps the least understood of the affected countries. There, the government wasn't satisfied with merely clearing the poor people from the coasts-it used the tsunami to try to clear its citizens out of the vast majority of the country's livable zones.

The Maldives, a chain of roughly two hundred inhabited islands off the coast of India, is a tourism republic in the same way that certain Central American countries used to be called banana republics. Its export product is not tropical fruit but tropical leisure, with a staggering 90 percent of the state's revenues coming directly from beach holidays.26The leisure that the Maldives sells is a particularly decadent, enticing kind. Nearly one hundred of its islands are "resort islands," patches of lush vegetation surrounded by halos of white sand that are entirely controlled by hotels, cruise lines or wealthy individuals. Some are leased for up to fifty years. The most luxurious of the Maldivian islands cater to an elite clientele (Tom Cruise and Katie Holmes on their honeymoon, as an example) that is drawn not just to the beauty and the diving but to the promise of total seclusion that only private islands can provide.

With architecture "inspired" by traditional fishing villages, the spa-resorts compete over who can pack their thatched huts on stilts with the most exciting array of plutonomy toys and perks -Bose Surround Sound home entertainment, Philippe Starck fixtures in outdoor bathrooms, sheets so fi