SF Bay Guardian Life During Wartime

May 10, 2003

Iraq Inc.: A joint venture built on broken promises
By David Usborne, Rupert Cornwell and Phil Reeves

America and Britain declared themselves yesterday (Fri) to be the "occupying powers" in Iraq and produced a blueprint for the administration of the country which reduced the United Nations to an advisory role. This is despite President George Bush declaring in Belfast on 8 April that "we are committed to working with international institutions, including the UN, which will have a vital role to play in this task."

Britain acknowledged in a draft UN Security Council resolution that, along with the United States, it meant to run Iraq for the foreseeable future as a conquering power. Both countries urged the Council to agree to an instant lifting of economic sanctions against Iraq and accept that, as "occupying powers", they would have near-total control of the country's oil revenues for 12 months and may be much longer.

Despite earlier promises that the UN should have an important role administering the delivery of humanitarian aid to the country, this task now goes to the US and UK, with the UN reduced to a co-ordinator. John Negroponte, the US ambassador to the UN, said yesterday that there would be no role for the team of UN weapons inspectors led by Hans Blix "for the forseeable future".

The immediate reaction in Baghdad was negative. "This is very, very bad. We are in the same situation as we were with Saddam," said Bassen al-Khoja, 31. "[They] stole the oil money from the people and we got nothing and now the Americans and British are doing exactly the same. We are not going to see any benefit from it." Similar disgust was expressed by Fareed Ismail al-Qaisi, 42, who is unemployed. "The United Nations should control the oil money, not the Americans," he said.

Whatever the fate of the UN resolution, Washington has already started a secretive carve-up of the Iraq reconstruction pie in which all the slices thus far have gone to US companies - many of them with close connections to the Bush Administration.

The impression that Iraq is becoming a carpetbagging free-for-all was reinforced at the Ronald Reagan International Trade Center in Atlanta this week when lawyers, consultants and business people streamed in, all hoping for a piece of the pie. They heard a presentation by the US Agency for International Development (USAID), which is handing out contracts worth $1.5bn ((pounds sterling)0.9bn) to rebuild the healthcare system. The USAID contracts total about $70m. If the US follows through on its sweeping promise to rebuild Iraq's entire infrastructure the total may reach several hundred billion dollars. The contracts will be paid for from Iraqi oil revenues, controlled by the US and UK and audited by an international firm of accountants.

Yesterday's appeal to the UN was contained in a baldly-worded draft resolution tabled by Mr Negroponte. It was co-sponsored by Britain and Spain. The text, however, which makes clear that London and Washington would essentially run Iraq for at least a year, was expected to attract brisk resistance at least from France and Russia.

Controversially, the resolution relegates the UN to an advisory capacity on a board that will audit the spending of Iraq's oil revenue on reconstruction. A "special co-ordinator", who would be appointed by Kofi Annan, the UN secretary general, would also orchestrate UN humanitarian efforts. This is at odds with past Anglo-American statements which said that the UN would have a "vital role" in Iraq.

The US is calculating that the Security Council will be unwilling to allow a further eruption of the bitterness that characterised the weeks before the coalition's invasion of Iraq and will therefore, after some debate, acquiesce to the resolution. Even some of the staunchest defenders of the UN appeared to agree.

"Surely it would be better for everyone to push this through rather than re-open all the quarrels and instead do something to help the poor people of Iraq," said Sir Brian Urqhart, a veteran British diplomat and former UN under secretary general. "I can't believe that they won't do that." Despite the strong impression that Britain and America are busy carving up the spoils of war, France and Russia, the most vociferous opponents of the war may even vote for the resolution.

France's President Jacques Chirac said his government would "undertake discussions on the future of this country in an open and constructive spirit". More ominously, a statement from the French Foreign Ministry, said that a "strong involvement of the international community, through a central role of the United Nations, is indispensable to provide legitimacy" to any post-war Iraqi government.

At the resolution's core are provisions to lift the economic sanctions that were put in place in 1990 following Iraq's invasion of Kuwait. The US argues that without the resumption of full trade, the economic reconstruction of Iraq cannot hope to get off the ground. Russia has insisted, by contrast, that sanctions cannot be lifted until the elimination of weapons of mass destruction in Iraq has been verified by UN weapons inspectors, as stipulated under numerous existing UN resolutions. The US-UK draft notably ignores the UN weapons inspectors altogether.

Separately, the text envisions taking away UN control of Iraq's oil sales. This also runs directly counter to the view of Moscow, which has argued for keeping a UN hand on the Iraqi oil industry. Last night, the Russian envoy to the UN, Sergei Lavrov, said he had "lots of questions" about the text. Washington is asking that the UN oil-for-food programme, which currently takes in all oil revenues and distributes them for the purchase of food, medicine and other humanitarian supplies, be wound up after four months. Control of oil revenues would pass to the "Iraqi Assistance Fund" to be held by the Central Bank of Iraq, managed by US officials. An advisory board with the UN co-ordinator and envoys from other international financial institutions would audit the disbursement of the revenues.

It is the first time that Washington and London have formally acknowledged that they consider themselves "occupying powers" in Iraq. It is a status that is governed by the Geneva Conventions that also lays out strict responsibilities and obligations for those powers under international law.

In Brussels, the European Union commissioner for development, Poul Nielson, voiced dismay at the text. He said the US was "on its way to becoming a member of Opec", adding: "They appropriate the oil. The unwillingness to give the UN a legal, well defined role also speaks a language that is quite clear."