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IRAQ REQUIRES A HELPING HAND TO KEEP IT AFLOAT

by Amir Taheri
Gulf News
July 14, 2004

Special to Gulf News

Judging by diplomatic statements the whole world is now eager to help Iraq. "We will do all that we can to help Iraq," says German Foreign Minister Joschka Fischer who had been in the forefront of the campaign to keep Saddam Hussain in power before liberation.

"The international community must come together and help Iraq," echoes France's new Foreign Minister Michel Barnier, signalling a possible change of course in Paris.

Other opponents of the liberation of Iraq have expressed similar sentiments. "Helping Iraq" was a key pledge in a communiqué issued by Iran and Syria at the end of Syrian President Bashar Al Assad's visit to Tehran this week.

Russia, China and India, too, have also indicated readiness to help Iraq. But how sincere are these promises? We shall not know the answer until concrete measures are taken to help Iraq stabilise and speed up rebuilding its economy.

The first step towards helping Iraq is for those countries that have refused to recognise the interim government to do so immediately. This should be followed by the reopening of embassies in Baghdad.

The interim Iraqi government should be allowed to reclaim that country's embassies abroad and to reopen them immediately. These moves will send a signal that everyone now accepts that Iraq has a new legitimate government. Next, those who say they want to help Iraq must stop their disinformation campaign in that country.

It is no secret that the bulk of rumours spread in Iraq each day come from Arab, especially Egyptian and Jordanian, intelligence services. Having shut themselves out of Iraq by an ambivalent attitude last year, Egypt and Jordan, along with other Arab states, are compounding their error by waging psychological war against the new leadership in Baghdad.

A more dramatic version of that psychological war can be observed in the Arab satellite television's coverage of Iraq. These channels, include Al Jazeera of Qatar, or the state owned Al Alam in Iran; and, one must assume, reflect the policies of their governments.

In the very least, these channels should stop broadcasting the video messages of terror groups killing people in Iraq. This does not mean censorship but proper journalistic treatment of material that must not be aired unedited and without comments to put it in context.

The claim of impartiality cannot justify showing videos of beheadings as an act of "resistance to occupation". Another way to help is for Iraq's neighbours, especially Iran and Syria, to stop distributing money and arms to political loose cannons and remnants of he fallen regime. The new Iraqi government says it has "conclusive evidence" that both these countries are involved in fomenting trouble in Iraq.

Those who say they want to help can also contribute troops. Iraq is likely to need a foreign military presence for another three years. Regardless of who wins the next presidential election, the US is certain to provide the bulk of the troops. But others could help. One way to do so could be described as "the Zapatero way".

Spain's new Socialist Prime Minister Jose Luis Zapatero won the election with a promise of withdrawing Spanish troops from Iraq. Now that he is in power he realises the consequences of that policy. He cannot, of course, eat humble tapas. But he is trying to mend things by sending Spanish troops to Afghanistan and Haiti to replace Americans, thus enabling the Pentagon to have more reserves for Iraq.

Germany and France could adopt similar positions, and send troops to replace GIs in some of the 22 peacekeeping missions in which the US shoulders the main burden. A good place to start would be in the heart of Europe, in the Balkans.

The Arab states, too, could adopt the "Zapatero way". Iraqis do not want Arab, or for that matter Turkish, troops on their soil. But Egypt and Jordan, and other Muslim states, notably Turkey, Pakistan and Malaysia, could contribute troops to replace Americans in several African and Asian theatres.

Nato could also help by stopping to treat Iraq as a leper. Iraq needs Nato's help in training the new Iraqi army and police force. This can best be done inside Iraq. French President Jacques Chirac's attempt at preventing this is bad for both Iraq and Nato. Another way to help Iraq is for the OPEC members to allow the newly-liberated nation to export more oil than allowed under its official quota.

Current Iraqi production averages at 1.8 million barrels a day. This could quickly be increased to three million, and Iraq has the potential to reach seven million barrels a day within five years.

Even then, taking into account rising global demand, the price of oil per barrel is likely to stay above the $25 mark regarded by OPEC as ideal. There is no reason why Iraq, which has a large population, and needs the money, should have the same quota as the smaller OPEC members that do not need so much cash.

Much has been said about Iraq's missing billions. By some estimates the fallen regime has hidden some $30 billion of Iraqi money in tax havens around the globe. At least another $10 billion has disappeared in corrupt deals involving the United Nations. The US should take the lead in tracing the missing money and help return it to the Iraqis.

Iraq should also get direct control of the estimated $14 billion that remains in an escrow account managed by the UN.

The measures mentioned above involve no significant financial cost to countries expected to take them. But there are other measures that involve serious money. The first concerns the American aid package of $18 billion. If properly spent this could give a boost to the Iraqi economy which is showing signs of revival.

So far, however, the main part of disbursement has gone to legal fees, consultancies and managerial costs that benefit non-Iraqi, mostly American, businesses.

The package should be redesigned away from big projects that might bear fruit in several years. What Iraq urgently needs is thousands of small and medium projects to improve the average citizen's life quickly.

At this time in Iraq, small is not only beautiful but good politics. It is also good politics for the US to give the Iraqis a real say in how and where the aid is used. More important, perhaps, is the need to solve Iraq's debt problem.

Iraq's foreign debt is around $120 billion, a huge burden for a crippled economy. Of these some $22 billion consists of arrears accumulated by Saddam over the past 13 years. A further $20 billion is owed to the Paris Club countries, notably Russia, France, Germany, Britain and the US. The Gulf states account for a further $60 billion of Iraqi debt.

The rest is owed to other countries and banks. As things stand Iraq would have to allocate a third of its oil income to servicing its debt. This translates into slower economic growth and cuts in social services. The Arab part of the Iraqi debt consists of the money given to Iraq during its eight-year war against Iran. It would be both honourable and good politics to write off that debt.

The Paris Club should write off at least 60 per cent of the debt. The US has asked for a total write-off, while Russia proposes 50 per cent. France, however, says it would not go beyond 30 per cent. The total Iraqi debt should be brought down to $50 billion, including the arrears, with a two to three years grace period and realistic rescheduling.

Iraq, with the world's second largest oil reserves, is a good medium and long-term investment for its creditors. Donors' conferences held during the past year have come up with a number of promises, but none has materialised so far.

What is needed is an implementation schedule to ensure that at least part of the $5 billion pledged in Madrid is made available this year. Helping stabilise Iraq and put it back on the path of economic development and democratisation is a good investment in reshaping the Middle East, indeed the whole Muslim world, ensuring oil supplies, and enhancing the security of the Western democracies.

Amir Taheri, Iranian author and journalist, is based in Europe. He can be contacted at amirtaheri@benadorassociates.com

http://www.benadorassociates.com/article/5901