James Harding
The Financial Times, UK
June 12, 2003

Washington — Richard Perle, the influential Pentagon adviser, on Wednesday called for the complete forgiveness of Iraqi national debt, an act which would teach banks the risks of lending to a “vicious dictatorship”.

Voicing a widely held but largely private view of many within the Bush administration, Mr Perle also endorsed preferential treatment for companies from the US, UK, Australia and Poland in the competition for Iraq reconstruction contracts.

“Some countries opposed the liberation of Iraq. France opposed the liberation. Germany opposed liberation. So did Russia,” said Mr Perle. “You could forgive the Iraqis for not rushing into business contracts with companies from countries who, had their policies prevailed, would have left Iraq in the hands of Saddam Hussein.”

Elaborating on the point, Mr Perle said that if a future Iraqi administration had to choose between competing bids from Alcatel, the French telecommunications group, and a British concern, it would likely lean away from the French. “There will be a natural disinclination to reward a company from a country which opposed the liberation of Iraq.”

The first priority in the reconstruction of Iraq, Mr Perle said, should be the elimination of the Iraqi debt. Estimates of Iraq’s national borrowings vary, but the Center for Strategic and International Studies, the Washington-based think-tank, estimates debt at $60bn-$130bn (£36bn-£78bn).

The leading creditors to Iraq are the Gulf states, Russia and Japan, and a host of commercial banks.

“If the French banks, the German banks and some American banks are unhappy about that [debt forgiveness,” Mr Perle said, then they would have learnt a lesson about the “moral hazard. . . of lend[ing] to a vicious dictatorship.” Mr Perle, a member of the Pentagon’s influential Defense Policy Board, was not speaking on behalf of the US administration, but in a personal capacity.

Mr Perle, a dogged advocate of regime change by force both within the corridors of the administration and on the television news networks, also took the chance to defend the Bush administration against allegations that it has manipulated intelligence.

Insisting that US-led forces in Iraq will, eventually, find evidence of weapons of mass destruction, Mr Perle dismissed as “lies” suggestions that the Bush administration and the Blair government in London had massaged the information they received on Iraq’s weapons programmes.

The Associated Press has published a calculation of civilian casualties in the war based on records from 60 of Iraq’s 124 hospitals. The estimate is that at least 3,240 people died, including 1,896 in Baghdad.