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News, 12-19/4/02 (2) http://www.dawn.com/2002/04/16/int10.htm * Crisscrosses hamper arms inspection in Iraq by Walter Pincus & Colum Lynch Dawn (from Washington Post), 16th April, 02 Safar 1423 WASHINGTON: In an unusual move, Deputy Defence Secretary Paul Wolfowitz earlier this year asked the CIA to investigate the performance of Swedish diplomat Hans Blix, chairman of the new United Nations team that was formed to carry out inspections of Iraq’s weapons programmes. Wolfowitz’s request, involving Blix’s leadership of the International Atomic Energy Agency, illuminates the behind-the- scenes skirmishing taking place in the Bush administration over the prospect of renewed UN weapons inspections in Iraq. [.....] The inspection issue has become “a surrogate for a debate about whether we go after Saddam,” said Richard Perle, an adviser to Defence Secretary Donald Rumsfeld. Officials gave contradictory accounts of Wolfowitz’s reaction to the CIA report, which the agency returned in late January with the conclusion that Blix had conducted inspections of Iraq’s declared nuclear power plants “fully within the parameters he could operate” as chief of the Vienna-based agency between 1981 and 1997. A former State Department official familiar with the report said Wolfowitz “hit the ceiling” because it failed to provide sufficient ammunition to undermine Blix and, by association, the new UN weapons inspection programme. The request for a CIA investigation underscored the degree of concern by Wolfowitz and his civilian colleagues in the Pentagon that new inspections could torpedo their plans for military action to remove Hussein from power. A former member of the previous UN inspection team said the Wolfowitz group is “afraid Saddam will draw us in to a diplomatic minuet.” Secretary of State Colin Powell and his associates at the State Department take a different view. They “see the inspection issue as a play that buys time to enlarge a coalition for an eventual move against Saddam,” according to a former White House foreign policy specialist. State Department officials argue that Hussein will inevitably create conditions for the failure of the UN inspections, by setting down unacceptable terms or thwarting the inspectors inside Iraq so they have to withdraw.-Dawn/The Washington Post News Service. http://www.baghdad.com/p/72/b77e33366236. html * Rumsfeld: Iraq Checks Not Worthwhile The Associated Press, 16th April WASHINGTON: Defense Secretary Donald H. Rumsfeld strongly doubts that sending new U.N. weapons inspectors to Iraq would be worth the effort — a view not officially shared by the State Department. Speaking to reporters Monday about the prospect of resuming efforts to inspect for evidence that Iraq is illicitly developing nuclear weapons and means to deliver them, Rumsfeld made clear that he thinks Iraq inevitably would find ways to deny access or deceive the inspectors. To lift the veil of secrecy from Saddam’s work on weapons of mass destruction would require an inspection system that is ``enormously intrusive’’ — more so than anything tried in the past, Rumsfeld said. ``I just can’t quite picture how intrusive something would have to be that it could offset the ease with which they have previously been able to deny and deceive, and which today one would think they would be vastly more skillful, having had all this time without inspectors there,’’ Rumsfeld said. His remarks contrasted sharply with comments made separately by State Department spokesman Philip Reeker, who told reporters it is the Bush administration’s policy to insist that Iraq permit unfettered inspections. ``Iraq has to comply fully and unconditionally with all applicable United Nations Security Council resolutions, including the return of U.N. weapons inspectors, and cooperate fully with them,’’ Reeker said. He gave no indication the State Department shares Rumsfeld’s view that inspections cannot succeed. Rumsfeld did not say what should be done if effective inspections should prove impossible. In the past he has endorsed the view that if the goal is to stop Iraqi President Saddam Hussein from threatening to use a weapon of mass destruction, then military action would be more effective than diplomacy. In January 1998, Rumsfeld and Paul Wolfowitz, who is now deputy secretary of defense, signed an open letter to then-President Clinton, stating it was nearly impossible to adequately monitor Saddam’s weapons programs. They said the only acceptable strategy is to ``eliminate the possibility’’ that Iraq could use or threaten to use a weapon of mass destruction, and this would require military action. ``Everyone knows’’ Iraqi President Saddam Hussein is pressing ahead with a nuclear program and striving to improve and expand his chemical and biological weapons arsenal, Rumsfeld said on Monday. Amid growing speculation that the United States may launch a military offensive in Iraq to oust Saddam, the Iraqi government is negotiating with U.N. Secretary-General Kofi Annan on a resumption of weapons inspections, which ended in 1998 after Saddam refused to cooperate with the inspectors’ demands. Rumsfeld said U.N. inspections in Iraq that began after the 1991 Gulf War were inadequate. ``For the most part,’’ he said, ``anything they found was a result of having been cued to something as a result of a defector giving them a heads-up.’’ In the years since inspectors left Iraq in 1998, the Iraqis have only increased their ability to hide their work, he said. He cited an ``enormous amount’’ of equipment that Iraq has acquired ``enabling them to become more mobile, enabling them to go underground to a greater extent than they had been previously.’’ In a related matter, Rumsfeld denied a Washington Post report that Wolfowitz had asked the CIA to investigate the performance of Swedish diplomat Hans Blix, chairman of a U.N. team formed to resume weapons inspections in Iraq. Blix previously headed the International Atomic Energy Agency. Rumsfeld would not say whether Wolfowitz had asked the CIA for information on Blix but said there was no request for an investigation. A U.S. government official who discussed the matter on condition of anonymity said Wolfowitz asked the CIA to assess Blix’s leadership of the International Atomic Energy Agency. The agency is responsible for monitoring atomic energy programs of member countries, including Iraq. In a response delivered in January, the CIA told Wolfowitz that Blix performed as well as he could within the rules governing inspections of Iraqi nuclear power plants, the official said. At U.N. headquarters in New York, spokesman Fred Eckhard said Annan was concerned by the Post report. ``If it happened the way the article described, I think it would be an attempt at intimidating an international civil servant, and that, of course, would be unacceptable,’’ Eckhard said. Reeker said the State Department has full confidence in Blix. http://www.thetimes.co.uk/article/0,,59-268342 ,00.html * Legality of intervention against Iraq >From Sir Brian Barder The Times, 16th April Sir, In the increasingly divisive argument about military action against Iraq (leading article, April 11), each side is turning a blind eye to a different essential point. Opponents are reluctant to acknowledge that Saddam’s weapons of mass destruction, his programme for further developing them (including, at some stage, nuclear weapons) and his record of willingness to use them, pose a threat to his neighbours and to the wider world; the argument that a refusal to deal with the threat, or delay in dealing with it, may well be more dangerous than early pre-emptive action should not be dismissed. George Bush’s and Tony Blair’s mantra that “inaction is not an option” is a serious argument that deserves a serious response by dissenters. Equally, advocates of early action are worryingly reticent about the need to comply with international law, and specifically with the UN Charter. The possible difficulties for the Americans of getting authority for the use of force in a Security Council resolution are obvious: it would entail convincing Russia, China and France (as well as the UK) that no less dangerous peaceful alternative is available, and, most importantly, working out with them and with other Council member governments an acceptable definition of the objectives of military action. In practice, this would probably mean limiting its aims to Iraq’s implementation of existing Security Council resolutions: Washington would have to give up the additional objective of toppling Saddam. This would be a fair price to pay for legality and international backing. Yet those in London and Washington who are evolving the new doctrine of the limited sovereignty of failed or terrorist states, and the right of stronger states to intervene in their affairs, increasingly imply that such interventions would be legal even if not authorised by the Security Council. The dangers of giving carte blanche to any strong state to intervene in another country by force, without any form of international approval, whenever it deems itself to be even potentially threatened (or when it claims to see the makings of a “humanitarian disaster”) are, or should be, obvious. Bypassing the UN Charter’s mandatory safeguards in this way would mean returning to the law of the jungle. The key to securing broad public support for action against Saddam, and to gaining general acceptance of the new interventionist doctrine, is for the US and UK Governments openly to acknowledge now that the use of force in these circumstances always requires the explicit authority of the Security Council, and to start working for it when the time comes, despite the compromises inevitably entailed. We should not repeat the expensive mistakes made in 1999 over Kosovo. Yours sincerely, BRIAN BARDER (HM Diplomatic Service, 1965-91), firstname.lastname@example.org April 13 http://www.dawn.com/2002/04/18/int10.htm * Mideast distracts US from Iraq by Carol Giacomo Dawn, 18th April, 04 Safar 1423 [.....] Judith Yaphe, a Mideast scholar with the government's National Defence University, said Bush faced serious problems going after Saddam right from the start. But the recent expansion of the intifada into a spiralling cycle of Palestinian suicide bombings parried by Israeli army thrusts into the West Bank has become "a major stumbling block," she said in a telephone interview. Hostility toward the United States, Israel's top ally, is high in Arab countries and to win the support of Arab leaders for a US-led anti-Saddam operation any time soon would be harder than ever, she said. As evidence, Yaphe cites a photograph from the recent Arab summit in Beirut in which Saudi Crown Prince Abdullah embraces the envoy from the Iraqi leader. "For that picture to be allowed (to be published) is stunning ... and deliberate ... It says something about the Arabs at this point ... It signals that they are clearly against any move against Iraq," she said. Judith Kipper of the Council on Foreign Relations also considers a US-led anti-Saddam operation to be "pushed off for the foreseeable future." This has been apparent since late last year when the Afghanistan war stretched thin the US military, their training and their equipment, she said. AFGHAN ENGAGEMENT: Despite hopes of wrapping up the Afghan operation quickly, US forces remain fully engaged there. Meanwhile, Kipper said it was estimated 200,000 US troops and three aircraft carriers would be needed in the Gulf to take on Saddam. Fall out from the Mideast turmoil has grown. David Mack, a former US diplomat now with the Middle East Institute, said Israeli Prime Minister Ariel Sharon's assault on Palestinian leader Yasser Arafat had backfired, making Bush, not Arafat look "irrelevant." "This is a serious blow to US influence in the region, and in the long term it is also bad for Israel," he added. For all Bush's talk of targeting Iraq, James Zogby of the Arab American Institute said: "I never thought he'd do it. The more it was talked about, the less they were going to do it." Committing massive U.S. forces to the Gulf could also endanger US allies Turkey and Jordan.-Reuters , "This will foil all efforts by the proreform government to improve Iran's relations with the outside world." News, 12-19/4/02 (2) ECONOMIC CONSEQUENCES http://www.independent.co.uk/story.jsp?story= 284025 * Oil is the reason America wants to be rid of Saddam by Adrian Hamilton Independent, 12th April 2002 One wouldn’t normally accuse Tony Blair of naivety or the Labour left of missing a trick when it comes to anti-Americanism. But it is utterly astonishing that a week of discussion of Iraq and the Middle East could fail to connect them to the other big story of the week – oil. Oil has always been at the heart of Middle East politics. Even more so now that prices are on the rise and Saddam Hussein is using the oil weapon. The US reach for secure oil supplies is as much behind Washington’s determination to overthrow Saddam Hussein now as any question of Saddam’s danger to the world. This is not to accuse Washington of some deeply nefarious international conspiracy with the oil companies. It doesn’t need that. It is simply to point out that a country as dependent on imports as America is bound to take a strategic view of its interests, all the more so when it is headed by a president from an oil state who has earned most of his personal fortune from the commodity. It would be astonishing if America didn’t plan to tie up oil reserves for itself. It always has in the past, which is why it (and the British and French) supported Saddam Hussein for so long, when he was using chemical weapons against his own people. What is extraordinary is that Tony Blair should not recognise this as an integral part of American motivation in its post-11 September policies. For the single most important foreign policy fact of the 11 September attacks is the extent to which they have undermined America’s traditional relationship with Saudi Arabia. Three quarters of the hijackers involved in the attacks were Saudi and most of the financing of al-Qa’ida emanated from the desert kingdom. For the first time that anyone can remember, officials of the State Department and White House began openly to brief against the regime there, suggesting both that the royal family had had its day and that its importance as a strategic ally was greatly exaggerated. It was this implied threat that is in part responsible for Saudi Arabia’s dash to lead a moderate peace position in the Middle East and to declare so promptly that it would make up any oil that Iraq cut back. But as an oil producer, Saudi Arabia has nevertheless reached its peak. Its finances, thanks to gross overspending and endemic corruption, are in a mess. The balance of power within the royal family has shifted to the isolationists away from the pro-westerners. The US must look to alternative sources at the very least to secure its future increase in imports and to keep a lid on prices which threaten its economic recovery. There are only two unexploited sources with anything like the potential reserves of Saudi Arabia. One is Iraq, held back by political constraint for nearly 30 years, and the Caspian, restrained by Russian self-interest and incompetence. Washington is now going determinedly for both. Even if Iraq were not developing weapons of mass destruction and Saddam Hussein were merely sitting in a corner with his thumb in his mouth, it is probable that the US would now be seeking his removal. In Central Asia, 11 September has also accelerated policies which the US was pursuing in any case. Development of the Caspian could bring huge new supplies on to the market. The question is whether they would be pipelined via Russia and its semi-satellites or Iran and the Middle East. Washington wants it moved through pro-Moscow territories. But this in turn has led it to support, with the complicity of Moscow, the nastier former communist regime of Uzbekistan and to encourage the pro-Russian and anti-Islamic elements in the surrounding countries. That is probably the last thing that Britain should be lending its weight to. Our interest, and Europe’s, has to be in bringing Iran into the Middle Eastern regional fold and in diversifying European energy sources. Excessive reliance on Russia as the route of provision cannot be good. So too with Iraq. In a general sense a change in the Iraqi regime and an easing in the current supply squeeze would be a good thing. But the question is what kind of regime would replace it. America’s interest is in ensuring a central, probably authoritarian, regime to keep the oil supply flowing. That is, after all, why America together with the Saudis did not ensure the demise of Saddam Hussein after the Gulf War or support the rebellions in north and south. The last thing they wanted was an Iraq that split up. So long as Saddam Hussein was contained and the price of oil was falling (as it was), why worry? It’s the reverse in price trends that have changed things. Europe cannot be said to have the same interest. An independent Kurdistan or even southern Shia Iraq should not concern us so long as they are democratic and peaceable. Which is the most important point of all. The demand for security of oil supplies almost invariably leads to support for the more unpleasant regimes of the world. There can be few more unsavoury than our new ally Uzbekistan, for example. Yet that is where America is heading. Where oil is concerned, Washington has its own interests. For Tony Blair to think that he is only supporting a moral crusade and the demands of friendship without realising that he is also being used to further America’s own commercial self-interest is simply to act the chump. http://quotes.freerealtime.com/dl/frt/N?art=C20 02041200102r6254&SA=Latest%20News * If Military History Should Repeat Itself, Will The Markets And Economy Follow Suit? by Jim McTague Free Real Time [whatever that is], 12th April What would happen to the markets if the U.S. attacks Iraq, as many politicalobservers at home and abroad believe it will this year? The immediate reaction probably would be a global pullback in stocks. And theconflict almost certainly would boost energy prices, affect the value of thedollar and of gold, slow the pace of the global economic recovery and discouragethe Fed from boosting interest rates. Norbert Walter, chief economist for Deutsche Bank Group, says markets worldwideremain overpriced and are due for a major correction that could be triggered byan invasion of Iraq. Just how deep and how long any decline might be depends onthe effectiveness of the American campaign. As recent history shows, the morequickly a war is brought to a successful conclusion, the better. On August 2, 1990, when Iraq invaded Kuwait, beginning a half-year stretch inwhich Washington and Baghdad exchanged threats but not blows, the stock market,as measured by the Standard and Poor’s 500, stood at 351.48. Within two months,it fell 10%, to 315.21. On Jan. 16, 1991, the day the U.S. and its allies launched the assault thatquickly would rout Iraqi troops, the benchmark average was at 316.17. On Feb.25, the first trading day after the allied ground offensive that sent Iraqitroops fleeing, the S&P 500 opened at 365.65. On March 1, the day of thecease-fire, when the war had been decisively won, it closed up 17% from thewar’s start, at 370.47. (The dates of the war, from the Department of DefenseWebsite, are in Eastern Standard Time.) The S&P closed 1991 at 417.09. Memories of that happy outcome may figure in the stock market’s apparent lack ofconcern about rumors of a coming rematch with Saddam. Last month, Rep. Lindsey Graham, a South Carolina Republican who is privy tointelligence briefings, predicted the U.S. would attack Iraq before the summerends. American intelligence experts believe Iraq is harboring terrorists andbuilding weapons of mass destruction. When the first wire stories on Graham’s remarks moved, shortly after 10 a.m. onMarch 27, the Dow Industrials were at 10351.28. They then moved upward, closingat 10426.91. At the time, Michael Murphy, a managing partner and chief equitiestrader at Wachovia Securities in Baltimore, told Barron’s: “There’s no panic. Noone is running for the doors.” It wasn’t until after Good Friday, March 29, when Israel invaded a Palestiniancompound in the West Bank that the stock market began what had been a mildslump, until last week’s slump. Deutsche Bank’s Walter finds the market’s indifference to the possibility of awar with Iraq puzzling, especially because he believes the American and Europeaneconomies will be less robust than generally anticipated, owing to tradedisputes, weak export growth and capital spending, and disappointingproductivity gains in Europe. So fragile is the current case for stocks, hesays, that any negative surprise — say, the unlikely event of Saddam Husseinproving less of a pushover this time — could precipitate the big downturn. An extended campaign could lead to calls among Arab states to support Iraq bycutting oil production, causing a spike in energy prices more severe than theone we’ve seen recently, even if the threat proves hollow. Coupled with theheightened fears of terrorism that a war would engender, this would hurtairlines and tourism worldwide. The U.S. balance-of-payments deficit would runup, owing to the expense of the campaign, which, this time, wouldn’t besubstantially financed by America’s allies. That could weaken the dollar, raising inflation fears. But the need to keep aneconomic recovery going could constrain the Fed from boosting rates to pre-emptinflation. And what about the price of gold? Historically, it has been a refuge fromuncertainty. In recent years, however, it hasn’t benefited much from globalcrises. When Iraq invaded Kuwait, gold was trading at $380.70 an ounce. By thetime Operation Desert Storm ended, on March 1, it had fallen to $366.90. So, itis uncertain whether a war would push the metal up from its recent level ofabout $300 an ounce. A conflict with Iraq, like the current war on terrorism, would boost stocks ofdefense contractors and security specialists. And any threat to the oil supplyand consequent jump in prices would benefit many energy companies and Russia —the biggest non-OPEC petroleum producer. Walter’s own strategy is to wait for the right buying opportunity: “I’m sittingon mountains” of cash, he says. “It’s not a matter of when the market willcorrect itself, but when.” History suggests the markets always swoon at the onset of a war, but quicklyrecover if it becomes apparent that the U.S. will win. >From 1939 until after Pearl Harbor, for example, the S&P 500 declined 40% to7.47. After Jimmy Doolittle’s daring 1942 raid on Tokyo, investors becamebullish. Stocks ended up rising 73% from Pearl Harbor to the end of 1945, to17.36. And stocks were clobbered in the first few days after the market reopenedfollowing last year’s terrorist attacks, but finished the year strongly, rising19% from the low point reached on September 21. Still, history doesn’t always repeat itself. “Iraq certainly is on my radar,” says Tom McManus, chief investment strategistfor Banc of America Securities, a subsidiary of Bank of America. “We’ve beenmore defensive, suggesting that people keep just 50% of their investments inequities, versus a normal weighting of 65%.” Like Walter, he’s skeptical thatthe recovery will be robust. Regarding Iraq, he cautions, “If you take into account additional resources thegovernment will require to mount a military campaign, then it gives furtherweight to the argument that people should be somewhat wary of stocks at currentprices.” He suggests adding in a risk premium when calculating a stock’searnings yield, which he defines as the amount of earnings from continuingoperations, divided by the price of the stock. “The average publicly traded U.S. company should offer a risk premium of 3% to4%, in real terms,” says McManus. “Over the past 10 to 15 years, it has rangedbetween 2% and 5%. Today, it is near 2%, which I believe is too low.” McManuscalculates a stock’s risk premium by comparing its forward earnings yield to theyield on a 10-year bond. For stocks to quickly rebound from any Iraq-related military action, of course,the U.S. must score a decisive victory in a relatively short period. One reason investors may not be fretting about Iraq is that George W. Bush sofar hasn’t pulled his punches. They also have seen America’s military in action. http://observer.co.uk/worldview/story/0,11581,6 839 10,00.html * Will the euro be a casualty of Blair’s Iraq war? by Mark Leonard The Observer, 14th April Every war in history has had unintended consequences. As Tony Blair returns from his Texan hoe-down having firmed up British support for “regime-change” in Baghdad, a regional war in the Middle East and a political war inside the Labour Party are being widely predicted. But there may be another unexpected casualty of an Iraq war: British membership of the euro. For Blair to convince his country and party of the need to help take out Saddam, he will need to prove that the Iraqi dictator poses the gravest threat to global and western security. But, for a Prime Minister pledged to “focus like a laser beam” on the problems of the public services to also resolve Britain’s long history of ambivalence towards continental Europe would mean fighting a political “war on three fronts”. This may not be impossible - but it would take a feat of political leadership unparalleled in Britain since 1945. [.....] The most important issue is that of timing. For all of the heated media debate about Saddam now, there will need to be a long diplomatic and military build-up to any offensive, most likely to occur this autumn or next spring. Yet the autumn has also long been seen as the key moment for a major, public pro-European push. As much of the British public return from continental holidays having experienced the tangible reality of the shiny, new currency, the pro-euro arguments could expect a better hearing than ever before. Pro-Europeans hope that the Queen’s Speech will include a Bill paving the way for a referendum. The late autumn is also exactly the time when Gordon Brown is due to start his official assessment of the economic tests. But it is at precisely this time that Tony Blair will have an intensive role as international cheerleader for the War Against Terrorism Phase 2 - rallying opinion, smoothing egos and painstakingly constructing global coalitions. Any modern war is a battle for public opinion. Western nations do not risk losing wars like those in Kosovo, Afghanistan or even Iraq on the battlefield: it is the “wobbles” at home and on the international diplomatic scene which are the primary threats to the success of prolonged military missions. Can Blair win the public argument for the war and at the same time make the argument for the euro? High summits in Damascus won’t leave much time for the kind of Town Hall Meetings in Dagenham that will turn public opinion on the euro around. And a media distracted by war will work in favour of the euro- sceptics who have an interest in closing down debate and keeping public opinion where it is. [.....] ------------------------------------------------- This mail sent through UK Online webmail _______________________________________________ Sent via the discussion list of the Campaign Against Sanctions on Iraq. To unsubscribe, visit http://lists.casi.org.uk/mailman/listinfo/casi-discuss To contact the list manager, email email@example.com All postings are archived on CASI's website: http://www.casi.org.uk