Peace
For Oil
Exclusive commentary by Greg Lewis / WashingtonDispatch.com
February 25, 2003
Can the Iraqi people, who have been under the rule of
Saddam Hussein's tyrannical regime for decades, be required to repay Iraq's
international debt after Saddam is removed from power? On the answer to
this question rests a not insignificant component of the economic futures
of three nations — Germany, France, and Russia — that have
been recalcitrant in the UN debate on Iraq. The three have painted themselves
into a corner because of their business dealings with Saddam's Baathist
regime, and the economic bind in which they find themselves is at the
root of their threats to veto UN resolutions in favor of expediting Saddam's
ouster.
A major part of their reluctance to support regime change
in Iraq is due to the fact that International Law does not look kindly
on nations that help provide the means for dictators to suppress their
own people. At issue is what is known as the Doctrine of Odious Debt.
The doctrine was formulated more than a century ago and refined in the
period after World War I when the issue of war reparations took on international
significance as national boundaries were redrawn and some sort of fairness
principle was sought for assessing the legitimacy of debt and calculating
reparations. This doctrine essentially says that the people under the
rule of a tyrant cannot be held responsible for the debts incurred by
that tyrant in their country's name if such debts were incurred for the
purpose of stifling political dissent and keeping the people subsurvient
to the regime. A look at the economic situations of Germany, France, and
Russia will help to clarify the implications of this legal principle.
Germany's economy can best be described as what happens
when socialists go on a bender and the authorities turn their backs instead
of citing them for DWI and getting them off the road and into rehab. So
over-regulated and union-dominated is the German economy that in addition
to six weeks' vacation, upwards of a dozen legal holidays, and substantial
cash "vacation" bonuses, workers receive at least one mandated
"pinkelpause" ("pee break" in the vernacular) per
workday. Apparently German employers weren't attentive enough to their
employees' needs to answer nature's call, and legislation was required
to make sure that those employees were not being prevented from relieving
themselves.
In the wake of such growth- and productivity-destroying
regulation (coupled with increasing restrictions associated with membership
in the European Union and the ongoing difficulties of attempting to integrate
East and West German labor and industry), the German economy's projected
growth rate for the current year is a dismal two tenths of one percent.
This despite the fact that Germany has been the largest western supplier
to Iraq of munitions, technical products, and so-called dual-use goods.
The value of this business was more than US$ 300 million in 2001, and
its loss would be, if not catastrophic, at least detrimental to Germany's
hopes for economic recovery.
Germany is not alone. In typically perverse fashion, the
French have found yet another dictatorial regime to appease in the name
of "peace in our time." In 2001, France did approximately US$
1.5 billion worth of business with Iraq, more than any other European
Union country. Since the oil-for-food program began in 1996, France's
trade with Iraq has amounted to US$ 3.1 billion. And France is owed more
than US$ 4 billion by Saddam's government, putting it in third place among
Iraq's creditors. But in addition to legitimate business with Iraq under
the aegis of oil-for-food, France has been an important supplier to Saddam's
military. A significant percentage of the Iraqi air force consists of
Mirage jets, while French Exocet missiles are included in its armory.
France is Iraq's largest western trading partner, and French petroleum
interests hold the rights to develop Iraqi oil fields promising yields
of more than 20 billion barrels.
Russia is Iraq's largest creditor, with estimates of Iraq's
indebtedness to Russia ranging from US$ 7 billion to 12 billion. To a
country whose GDP hovers in the US$ 300-350 billion range, this is not
a debt that can be forgiven easily. In addition, Russia, in the name of
its LUKoil, has recently gained significant commitments from Saddam Hussein
to develop Iraqi oil fields.
None of the three countries can afford to see Iraq's debt
to them cancelled under the Doctrine of Odious Debts, nor can they afford
to forego the enormous military and oil development contracts they have
negotiated with Saddam's regime. All three are seeking behind-the-scenes
deals which will protect their creditor status and business interests
in the event a U.S.-led coalition ousts Saddam.
For his part, Saddam virtually bankrupted Iraq in the
war against Iran, even before the Gulf War of 1991. In the Gulf War, because
of the damage he wreaked on Kuwaiti oil fields, he also amassed a huge
reparations bill. Because of his own country's ruined oil industry, Saddam
would not have been in a position to service Iraq's international debt,
even had he not faced sanctions resulting from the Gulf War. But the key
to this debt is that it can very clearly be argued to have been incurred
for the purposes of suppressing Iraq's Shiite majority as well as many
of Iraq's minority populations, including Kurds. Saddam is transparently
using this debt to Russia, Germany, and France, as well as the carrot
of future oil and industrial development deals, to influence his three
major business partners to help him remain in power by voting against
UN-approved regime change. If Saddam's ouster is achieved, their chances
of collecting the money owed them and bringing to fruition future economic
commitments is in serious jeopardy.
The major concern of the international "peace"
movement seems to be that the United States is going to depose Saddam
Hussein for the purposes of doling out Iraqi oil development rights to
U.S. companies. Hence the watchword, "No blood for oil." In
fact, however, the "peace" movement, which marches in lockstep
with Russia, Germany, and France, is by default advocating "peace
for oil"; they would, in effect, trade the lives of Iraqi citizens
and the danger to western countries of Iraqi weapons of mass destruction
for the assurance that Saddam will remain in power to pay his debts and
honor future contracts with three of his largest creditors. As odious
as the debt itself is, the cynical implicit support of Saddam's regime
in the name of "peace" is doubly odious.
While oil is certainly one of the reasons for considering
forcible regime change in Iraq, as far as the U.S. is concerned it is
not the only, or even the primary, reason. The same can't be said for
the key remaining anti-invasion holdouts. Their economic interests have
essentially blinded them and their supporters in the peace movement to
the human-rights and weapons-of-mass-destruction aspects of overthrowing
Saddam Hussein's regime, making them co-conspirators in the perpetuation
of a murderous government, a government whose ouster would be a blow struck
in the name of political, social, and economic freedom the world over.
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