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[casi] FW: Iraq Inc: A joint venture built on broken promises

Iraq Inc: A joint venture built on broken promises

By David Usborne in New York, Rupert Cornwell in
Washington and Phil Reeves in Baghdad
10 May 2003

America and Britain declared themselves yesterday to
be the "occupying powers" in Iraq and produced a
blueprint for the administration of the country that
confined the United Nations to a co-ordinating role.

Although George Bush declared in Belfast last month
that the UN would have "a vital role" in Iraq, there
was great disappointment yesterday after the
organisation was denied an operational role.

Britain acknowledged in a draft UN Security Council
resolution that, with the United States, it intended
to run Iraq for at least a year 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 maybe 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
America and Britain, 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 foreseeable future".

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 carpetbaggers'
free-for-all was reinforced at the Ronald Reagan
International Trade Centre in Atlanta this week when
lawyers, consultants and business people streamed in,
all hoping for a piece of the action. They heard a
presentation by the US Agency for International
Development (USAid), which is handing out contracts
worth $1.5bn (0.9bn) to rebuild the healthcare
system. The USAid contracts total about $70m. If
America fulfils 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 America and
Britain and audited by an international firm of
accountants. Yesterday's appeal to the United Nations
was contained in a baldly worded draft resolution
tabled by Mr Negroponte. It was co-sponsored by
Britain and Spain. The text, which makes clear that
London and Washington would essentially run Iraq for
at least a year, was expected to attract resistance
from France and Russia. Controversially, the
resolution relegates the UN to an advisory capacity on
a board that will monitor 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

Observers believe America is calculating that the
Security Council will be unwilling to allow a
resurgence of the bitterness that characterised the
weeks before the Allies' invasion of Iraq and will
therefore, after wrangling, eventually acquiesce to
the resolution. But those behind the resolution
recognise it is controversial and are open to
discussions on amendments. They expect a tough battle.

Sir Brian Urquhart, a veteran British diplomat and
former UN under-secretary general, said: "Surely it
would be better for everyone to push this through
rather than reopen all the quarrels and instead do
something to help the poor people of Iraq. I can't
believe that they won't do that."

Yet France and Russia, the most vociferous opponents
of the war may even vote for a redrafted resolution.
President Jacques Chirac said his government would
"undertake discussions on the future of [Iraq] in an
open and constructive spirit". But a statement from
the French Foreign Ministry said that a "strong
involvement of the international community, through a
central role of the UN, 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
after Iraq's invasion of Kuwait. America argues that,
without the resumption of full trade, the economic
reconstruction of Iraq cannot hope to get off the

France and Russia have 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 several
existing UN resolutions. The Anglo-American draft
omits all mention of UN weapons inspectors.

Separately, the text envisions taking away UN control
of Iraq's oil sales. This also runs directly counter
to the view of several of the nations opposed to war,
who have 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" on 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
within 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 and UK officials.
An advisory board with the UN co-ordinator and envoys
from other international financial institutions would
oversee the disbursement of the revenues, and make

The immediate reaction to the plans 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

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

In Brussels, Poul Nielson, the European Union
commissioner for development, voiced dismay at the
text. He said Washington 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."

 2003 Independent Digital (UK) Ltd

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