Thursday, December 18, 2003

Baker in Paris

In an article entitled "France and Germany Join U.S. in Effort to Reduce Iraq's Debt", the New York Times states:

"France and Germany agreed Tuesday to work with the United States toward a 'substantial reduction' of Iraq's towering foreign debt next year. The accord marked a significant step forward in the United States' effort to rebuild Iraq, as well as progress in mending ties with the two countries most opposed to the American-led war there."

This sounds like a huge victory for Bush and Baker, proving that Wolfowitz's announcement that France and Germany were cut out of reconstruction contracts did not prevent Baker from getting what he asked for (note the gloating). But you have to read the fine print. From later in the same article, referring to the group of countries called the Paris Club, a group of 19 industrialized countries that have worked together to alleviate the financial obligations of over-indebted countries:

"The Bush administration would like to see the group's countries cancel as much as 90 percent of the Iraqi debt due them, treatment that has in the past been reserved for so-called heavily indebted poor countries, mostly aid-dependent nations in Africa. With the world's second-largest proven oil reserves, Iraq is unlikely to qualify for that moniker."

In other words, all they've agreed to is the normal process of Paris Club discussions, which normally involve debt reduction of impoverished third-world countries. Iraq, with all its oil, certainly won't qualify for anything more than a nominal reduction, and will probably just have the debt restructured. From the Financial Times:

"The Paris Club will also have to work out a debt forgiveness arrangement that takes account of the country's potential wealth and does not breach criteria designed exclusively for heavily indebted poor countries."

The Europeans, being nothing if not diplomatic, and not willing to publicly embarrass Bush's envoy, said all the right things but promised absolutely nothing. They know that Bush's sudden interest in debt forgiveness has nothing to do with his concern for the Iraqi people and everything to do with facilitating the looting of Iraq by American corporations. Baker begged but brought back butkus.

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