December 24, 2003

COMMENTARY

No Debt for Iraq's Oil

 

By KENNETH R. TIMMERMAN

 

Former U.S. Secretary of State James Baker will be wading deeper and deeper into a minefield as he continues his mission to negotiate cooperation from current and former allies in Europe in alleviating the crushing debt left by Saddam Hussein. Nowhere are the obstacles and hidden traps more treacherous than in France, where President Jacques Chirac used to boast of his "personal friendship" with Saddam Hussein.

France is by no means Iraq's largest creditor. Accounts of Saddam's total debt to the French taxpayer, French arms contractors, and French construction firms vary between $3 billion to $10 billion -- a wide spread and a significant amount, but nothing compared to the estimated $100 billion Saddam owed his Arab allies in the Gulf for their support during the 1980-1988 war against Ayatollah Khomeini's Iran.

But the French have made it abundantly clear that they intend to exact a high price for their "cooperation" in joining any international effort to help the Iraqi people rebuild their country, after 35 years of depredations by Saddam and his Baath Party.

Contrary to silly claims made by several candidates seeking the Democratic Party nomination for president in the U.S., President Chirac and Foreign Minister Dominique de Villepin are not holding their breath in anticipation of winning reconstruction contracts paid for by the U.S. taxpayer. Even they are not so cynical as to believe their own wounded protests of having been "left out" of this phase of postwar reconstruction. After all, no self-respecting French government would open up French "cooperation" contracts in Africa, which are paid for with French taxpayer money, to fair, open and competitive bids by American contractors.

What Messrs. Chirac and de Villepin want is far more significant and, for the people of Iraq, far more dangerous. They want Iraq's oil, and they have France's oil and industrial lobby cheering them on.

After all, wasn't this supposed to be a "war for oil?" That's what the predominantly left-wing press in much of Europe proclaimed with great indignation. But that press got the story wrong. As U.S. Defense Secretary Donald Rumsfeld remarked famously, the U.S. government happens to see oil as a commodity to be traded on an open market, not a private reserve that can be controlled by a few oligarchs. "Countries that have oil sell their oil and it really doesn't matter to whom they sell it. If they say no to one customer, that customer will simply go to another supplier," he told Le Figaro earlier this year.

But that is not the view from Paris. Almost as soon as the guns went silent after the first Gulf war in 1991, French oil giants Total SA and Elf Aquitaine -- which have now merged -- sought a competitive advantage over foreign competitors in Iraq by negotiating exclusive production-sharing contracts. These were intended to give them a stranglehold on Iraq's future oil production for decades to come.

The first of two massive deals was announced in June 1994 by then-Iraqi Oil Minister Safa al-Habobi. His name was connected to numerous procurement schemes in the 1980s in association with the Ministry of Industry and Military Industrialization, which supervised Saddam's chemical, biological, and missile and nuclear weapons programs. Speaking in Vienna back then, al-Habobi confirmed that his government was awarding Total SA rights to the future production of the vast Nahr Umar oil field in southern Iraq, and that Elf was well placed to be awarded similar terms in the equally vast Majnoon oil fields on the border with Iran.

Those two deals would have been worth an estimated $100 billion over a seven-year period, and were conditioned on the lifting of U.N. sanctions on Iraq. Simply put, analyst Gerald Hillman told me, the French were saying: "We will help you get the sanctions lifted, and when we do that, you give us this."

Mr. Chirac is too shrewd to have raised the issue with Mr. Baker during their first meeting in Paris on Dec. 16. As Mr. Baker himself declared after the meeting, "The French and the U.S. government want to reduce the debt burden on Iraq so that its people can enjoy freedom and prosperity."

That is indeed a noble cause, and one to which Messrs. Chirac and de Villepin should subscribe on its merits. Until now, their pouting about "internationalizing" post-liberation Iraq sounds like sour grapes, accompanied with veiled threats that France could seek to enforce prewar contracts concluded with Saddam through international arbitration courts, as Russia has done.

Instead of reaching out for the spoils of a war they did not fight, now would be a good time for Messrs. Chirac and Villepin to make a gesture toward the Iraqi people by offering to free them from Saddam's debt. Such a gesture would be welcome. It would also be their first.


Mr. Timmerman is author of "Preachers of Hate: Islam and the War on America," and a senior writer for Insight magazine.

Original article

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