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Iraq: Analysts Say Exclusions From Contracts Could Hurt U.S.

For months, the administration of U.S. President George W. Bush has been hinting that countries that did not support the invasion of Iraq would pay a price. Now the Defense Department has published a list of the nations whose companies are eligible to bid on lucrative contracts for rebuilding Iraq. Conspicuously absent are Canada, France, Germany, and Russia, which all opposed the U.S.-led war. RFE/RL spoke with international affairs analysts who say punishing these countries is unwarranted and may give credibility to critics who question Bush's motives for the invasion.

Washington, 11 December 2003 (RFE/RL) -- Companies in Britain, Italy, Poland, and Spain stand to earn a good part of the $18 billion that the United States is willing to spend on the reconstruction of Iraq, according to a newly released Pentagon document. But companies in Canada, France, Germany, and Russia do not.

The Pentagon exclusion came as unwelcome news to those countries. Canada's incoming prime minister, Paul Martin, yesterday blasted the U.S. decision. "I find it really very difficult to fathom. First of all, Canada has put in close to $300 million in terms of the reconstruction of Iraq. We have troops in Afghanistan and are carrying a very, very heavy load in that country," he said. "I also think that what is most important is, in fact, the reconstruction of Iraq. There is a huge amount of suffering going on there and I think it is the responsibility of every country to participate in developing it."

Russia also had harsh words for the move, which came even as Bush was appealing to countries to ease Iraq's debt burden. Defense Minister Sergei Ivanov yesterday said Moscow had no intention of forgiving Iraq's $8 billion debt to Russia.

The announcement appeared to be in retaliation for the Pentagon decision. Foreign Minister Igor Ivanov, speaking in Berlin, said the task of rebuilding Iraq is a job for the entire world -- not just those countries in Bush's good graces. "With regards to the reconstruction of Iraq, I think it is a common task of the international community, and all those countries that are ready to provide assistance to the Iraqi people in the postwar reconstruction of the country should have all the opportunities to do that," he said.

United Nations Secretary-General Kofi Annan also weighed in, calling the U.S. decision divisive and unhelpful in stabilizing Iraq.

In Washington, the White House defended the move. Spokesman Scott McClellan said countries that were members of the so-called "coalition of the willing" -- who contributed troops and other resources to toppling Saddam Hussein -- should have the right to enjoy what he called the "prime contracts" funded by $18 billion in U.S. taxpayer dollars.

"All this is, we believe, fully consistent with our [World Trade Organization] WTO obligations," McClellan said. "We have looked at this and, again, we are talking about a significant contribution being made by U.S. taxpayers to the reconstruction efforts in Iraq."

The Pentagon exclusions apply only to companies seeking primary contracts. A company from any country may bid on a subcontract.

McClellan also held out this incentive for countries to consider changing their minds: "If countries decide they want to participate in the efforts and join the efforts of the coalition forces in Iraq, then circumstances can change."

But analysts say such inducements are not likely to work. They say this latest move by the Pentagon threatens to unravel the delicate progress the United States has made in recent months to improve relations with its longtime allies and Russia.

Thomas Carothers is the co-director of the Democracy and Rule of Law Program at the Carnegie Endowment for International Peace, a private policy-research center in Washington. He told RFE/RL that he was in Moscow recently speaking with government officials about Middle East issues. He says most of the people he met felt that the United States is trying to punish their country economically for its stand against the Iraq war.

"Russians are obviously very ambivalent about the invasion of Iraq. But, you know, what really bothers them is the notion that America is crowding out Russia in Iraq and making sure Russia's pushed out economically. That's actually what sticks in their throat much more than the mere exertion of American power. And all it would take would be a minor give-back by the United States to Russia on a few contracts to just bring Russia much closer in this regard. And [Russians are] really surprised [Americans are] not willing to do that," Carothers said.

Carothers says limiting the bidding only hurts the excluded countries and means little economic gain for the United States. What is worse, he says, is that the Pentagon has justified the exclusions as essential for U.S. security, but has not elaborated on how. This, he says, makes the decision appear petty and gratuitous.

Further, Carothers says, the Bush administration insisted from the start that the war in Iraq was about security, and it dismissed critics' claims that the United States wanted to control the world's second-largest known oil reserves. Now, he says, Bush has made it seem that profit was a factor, after all.

"This invasion was not supposed to be about economic gain. And treating the reconstruction contracts as favors that are given out to people highlights the fact that there is some economic gain for people. So it's a bit tawdry," Carothers said.

Simon Serfaty agrees. Serfaty is the director of the Europe Program for the Center for Strategic and International Studies, another Washington think tank. He said that to exclude some countries from bidding gives Bush's critics the opportunity to revive what he called the "unbecoming" argument that the United States invaded Iraq for its oil or to enrich corporations in America and in countries that supported the invasion of Iraq.

"By linking membership in the 'coalition of the willing' with the overall effort at reconstruction, we introduce the profit motive in the work of the coalition that is frankly misleading and self-defeating," Serfaty said.

This is unfortunate, Serfaty says, because he is convinced that Bush chose to go to war strictly for security reasons that sprang from the terrorist attacks in the United States on 11 September 2001.

According to Serfaty, the point of the war was to keep the people of the United States, Europe, and the Middle East from having to live in fear of random acts of terror as Israelis have done for decades. He says the Bush administration should not now give the world the impression that it is rewarding those who supported its Iraq policy and punishing those who did not.

Serfaty says the United States should focus on its core mission in Iraq and set international politics aside -- both for the Iraq's sake and its own.

"What we should do now is not engage [in] a new conflict with allies but mend fences with them. We've got to state our goal: to achieve an expeditious reconstruction and rehabilitation of Iraq. And the most effective way to do that is by widening the current coalition of the willing into a coalition of states that would be not only willing, [but also] capable," Serfaty said.

With all countries contributing, each in its unique way, Serfaty says, Iraq and its people could begin to prosper more quickly. With bidding limited, he says, the process could drag on far longer than Bush might anticipate.