Iraq's Odious Debts

Bush freezing out the world

John Hall
Alameda Times-Star, USA
June 23, 2003
One sign of how unruly and lawless Iraq has become since the American-led occupation began is that the World Bank won’t go near the place.

Normally, this institution is used to operating in unstable places where development funding is underway. But the bank’s president, James Wolfensohn, says it remains too unsafe to send a team into Iraq, and allied officials cannot guarantee protection. So, at the moment, the agency has only three representatives there – an almost laughable start for one of the world’s biggest reconstruction and development challenges.

After the war in Kosovo, the World Bank was all over the problem – raising capital for rebuilding the country. Now in Iraq, a country 10 times as populous and infinitely more complex, this huge financing agency is barely involved.

Wolfensohn, an Australian, is friendly to U.S. interests and to the Bush administration. But he says he is hearing more and more negative reaction to requests for assistance to American efforts. Especially on the question of forgiving debts to free up funds for Iraq’s battered infrastructure, Wolfensohn said the common attitude is, “You bombed it. You fix it.”

This isn’t the picture administration officials are drawing. Paul Bremer, the U.S.-appointed governor of Iraq, boasted last week that 58 nations are now donating to the reconstruction, including France and Germany, which had bitterly opposed the U.S. invasion.

Partners in Bush’s “coalition of the willing” are the chief decision-making authority for Iraq. International organizations like the World Bank are part of an advisory council without any power, relegated almost to a sideline, advisory role.

The bank’s imposing Washington headquarters, which looks from a distance like it hangs over the White House, is crawling with experts on rehabilitation and reconstruction.

A team of 10 World Bank specialists was supposed to have been in Iraq by now, writing a needs assessment. But even that mission has been put on hold.

The administration is more interested in working with American bankers to build a commercial banking system from the ground up.

IF the World Bank doesn’t feel needed, it is no accident. The administration, seared by its experience at the United Nations in the run-up to war, is in full-scale retreat from international institutions. French, Russian and Chinese officials, after trying to block the invasion, continue to protest what they consider an American attempt to dominate reconstruction and investment opportunities.

Opportunities at the moment seem well disguised. Iraq’s enormous oil reserve a few months ago had many people salivating. It was the magic elixir that would make the U.S. occupation brief and cost-free, even though more realistic voices at the time warned of rose-colored exuberance.

Now, Iraq’s oil fields stand in ruin as looting, sabotage and neglect continue to cripple production, according to The New York Times. Experts say the target of 1.5 million barrels daily production won’t be achieved until the end of the year, let alone this summer as the administration had planned. Bremer said Iraq was barely squeezing out enough oil to meet its own needs.

Poverty and an explosive potential for civil unrest continue to grow.

Unemployment, which was 50 percent before the war, is “substantially” higher now, according to Bremer. He said things were starting to improve, but continued violence is being directed at American troops and evidence mounts that organized resistance is being directed by remnants of Saddam Hussein’s Baathist party.

The occupation is turning out to be every bit as unmanageable – and potentially long – as Secretary of State Colin Powell and others warned the president that it would be. The administration’s planning for this bad possible case, let alone the worst, was inadequate.

Wolfensohn has attempted to return the World Bank to its original mission of fighting poverty but has encountered right-wing sniping as well as leftist, anti-globalization riots. A former investment banker, he has enormous resources at his fingertips to help straighten out Iraq. But the administration and its former great power friends first must straighten themselves out.

The key will be relief from Iraq’s debts and the enormous bills Saddam Hussein ran up in building his massively ineffective army, Wolfensohn told a breakfast meeting organized by the Christian Science Monitor. But neither the Russians nor the French, the biggest creditors, are going to be in a very warm and charitable mood while they are in the Bush administration’s deep freeze.

John Hall is the senior Washington correspondent of Media General News Service.

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