Thursday, December 18, 2003

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Questions about the DoD memo

Beyond the loonier e-mails I've received regarding the Slate essay, the criticism that crops up most frequently attacks what I said about the DoD memo regarding reconstruction contracts from last week. Basically, they have two points:

  • Why reward countries like Germany, France, and Russia for how they behaved prior to the war?

  • Given the relative success of Baker's mission to Europe, isn't this an example of successful hard-nosed bargaining?

    I wrote about the DoD memo at more length last week, but to expand a little:

    1) When White House officials tell the New York Times that they were surprised by the timing and wording of the memo, you know there was a screw-up.

    2) For those who feel these countries should not be rewarded for their behavior, I'm certainly sympathetic. A question, then: why are Egypt and Saudi Arabia on the list of countries that can receive contracts? Can a case be made that these countries were more cooperative than France, Germany or Russia prior to the war?

    3) This also goes to the bargaining question as well. According to press reports, of the approximately $120 billion in Iraqi foreign debt, only $40 billion is owed to Paris Club members. The rest is owed primarily to the Gulf states, Saudi Arabia in particular. If the DoD memo is supposed to be an example of bare-knuckles bargaining, why wasn't Saudi Arabia -- which owns a much larger portion of the debt than any European country -- excluded from the approved countries as well?

    4) As for Baker's mission, he has achieved some nice joint statements. But as this Chicago Tribune story points out, at this point they are merely words, because of how the Paris Club operates:

    [D]ebt relief for Iraq is by no means a done deal. The Paris Club always has made its debt decisions by the unanimous consent of its 19 permanent members, raising a high hurdle for a controversial subject.

    One member is cash-strapped Russia. It is owed more than $3.5 billion in country-to-country debt by Iraq and $52 billion in pending contract obligations — and has expressed no willingness to forgive any of it.

    posted by Dan on 12.18.03 at 08:47 AM




    Comments:

    “When White House officials tell the New York Times that they were surprised by the timing and wording of the memo, you know there was a screw-up.”

    If so, the screw-up did more good than harm. It certainly got the immediate attention of the Old Europeans.

    “For those who feel these countries should not be rewarded for their behavior, I'm certainly sympathetic. A question, then: why are Egypt and Saudi Arabia on the list of countries that can receive contracts? Can a case be made that these countries were more cooperative than France, Germany or Russia prior to the war?”

    Neither Saudi Arabia nor Egypt took leadership roles against President Bush. Also, does Dan Drezner know what these Arab leaders secretly told the Bush administration? My guess is that there were great differences between their public and private utterances. An Arab leader is always worried about angering the crazies surrounding them. Thus, a lot of their agreements are of a secretive nature.

    “This also goes to the bargaining question as well. According to press reports, of the approximately $120 billion in Iraqi foreign debt, only $40 billion is owed to Paris Club members. The rest is owed primarily to the Gulf states, Saudi Arabia in particular. If the DoD memo is supposed to be an example of bare-knuckles bargaining, why wasn't Saudi Arabia -- which owns a much larger portion of the debt than any European country -- excluded from the approved countries as well?”

    Once again, what are the Saudi leaders saying to the Bush administration in private. I strongly suspect that the Saudis are going to go along with the debt forgiveness plan. Dan Drezner seems to think that political agreements are always made public. Where in heck did he get this peculiar notion, especially in regards to the Arab countries?

    “4) As for Baker's mission, he has achieved some nice joint statements. But as this Chicago Tribune story points out, at this point they are merely words....”

    The Old Europeans merely desire to save face. They may scream and kick a while longer, but debt relief is essentially a done deal. Germany, for instance, apparently is realizing that it’s not good being on the outside looking in with the Bush administration.

    posted by: David Thomson on 12.18.03 at 08:47 AM [permalink]



    You might have mentioned that many of the countries cut out of the bidding process are currently active in Afghanistan. Canada, for example, has lost troops there. Indeed, many NATO countries have made non-trivial contributions to the reconstruction of Afghanistan, such as it is.

    I think this is interesting, because it reveals to the extent to which Iraq has come between the U.S. and the rest of the its effort to combat terrorism and stabilize countries that breed terrorism.

    posted by: CY on 12.18.03 at 08:47 AM [permalink]



    “You might have mentioned that many of the countries cut out of the bidding process are currently active in Afghanistan. Canada, for example, has lost troops there. “

    Your example of Canada is inadvertently ammunition for my position. President Bush has already assured the Canadians that they will be involved in the bidding process. You often have to get somebody’s attention before the problems within the relationship can be resolved.

    posted by: David Thomson on 12.18.03 at 08:47 AM [permalink]



    CY wrote: ". Canada, for example, has lost troops there"

    In fact, Canada has had troops killed by Americans.

    posted by: Jon H on 12.18.03 at 08:47 AM [permalink]



    Actually, if Dan or others wants to deconstruct what was said to find intentional slights against a Paris-Berlin axis, I don't have a problem with that. The fact of the matter is that "old Europe" does represent an obstructionist and anti-American constellation of attitudes and behaviors, and if the hegemon should decide to tilt policies in order to show that such attitudes and behaviors have consequences, I don't have a problem with that at all.

    Isn't diplomacy in part an effort to further one's interests by non-military means? What rule -- other than a desire for a foolish consistency -- is the administration breaking here?

    posted by: John Bruce on 12.18.03 at 08:47 AM [permalink]



    why are Egypt and Saudi Arabia on the list of countries that can receive contracts?

    Because, (in my opinion) the more closely they can be connected with the positive recovery and growth of Iraq (as a civil if not quite democratic nation,) the sooner they themselves will be infected by the freedom virus.

    The goal is peace and stability in the Middle East. Meddlesome european nations figure very differently in that equation than...Middle Eastern nations.

    posted by: SkipKent on 12.18.03 at 08:47 AM [permalink]



    Dan:
    On your comments:

    1) When White House officials tell the New York Times that they were surprised by the timing and wording of the memo, you know there was a screw-up.
    Note here "timing and wording", not CONTENT. The content was clearly the intended administration policy.
    The ban on bids from France, Germany and Russia can be justified in several grounds beyond the obvious of not rewarding those that stab you in the back.
    a) When you had countries that actively sabotaged the efforts to liberate Iraq, continue to sabotage efforts to improve the conditions there, and have individuals actively collecting money to support hostile elements in Iraq, why would anybody have confidence that a bidder from those countries would not also sabotage or interfere with the objectives of the mission by simply being sympathetic to hostile elements in Iraq? You need parties committed to work toward the same goal.
    b) Many of the European countries allowed in the bidding also have a military presence that can be used to protect and support nationals of the same countries as needed, and by being of the same nationality being more effective in doing so. There will furthermore be more commitment from those countries to maintain and enhance their military presence for that reason. Thus killing two birds with one stone.
    c) Pure financial considerations. This is U.S. taxpayer money. By limiting the pool of bidders, the chances that the bidders from the U.S. get the contracts are enhanced and the U.S. taxpayer money gets recycled back into the U.S. Technically the U.S. could have simply said: Only U.S. companies allowed to bid.
    2) For those who feel these countries should not be rewarded for their behavior, I'm certainly sympathetic. A question, then: why are Egypt and Saudi Arabia on the list of countries that can receive contracts? Can a case be made that these countries were more cooperative than France, Germany or Russia prior to the war?
    The key thing is the word PRIOR. The fact that Saudi Arabia did not allow U.S. forces to use its territory to launch an invasion does not mean that it had zero role on Iraq military containment prior to the war. I am even amazed that you would even try to make this case. I can only surmise that you feel that the U2 flights from Saudi Arabia prior to the war did not provide any useful information to the U.S, or that all of Iraq's air defenses destroyed from Saudi Soil prior to the war would not have been any threat during an actual war. See the links below.
    http://www.uiowa.edu/~ipiraq/news1.shtml
    http://www.ppu.org.uk/war/countries/mideast/iraq.html
    I would think that this qualifies as more cooperative than France, Germany or Russia.
    I do not have the time to document the case for Egypt, but in general, I think that Egypt could have been far more vociferously opposed to the war that they were. I think that they were only putting out a face for internal consumption, but did not actively sabotage the U.S. like the trio.
    3) This also goes to the bargaining question as well. According to press reports of the approximately $120 billion in Iraqi foreign debt, only $40 billion is owed to Paris Club members. The rest is owed primarily to the Gulf states, Saudi Arabia in particular. If the DoD memo is supposed to be an example of bare-knuckles bargaining, why wasn't Saudi Arabia -- which owns a much larger portion of the debt than any European country -- excluded from the approved countries as well?
    Have you heard of the concept of "parallel strategies"? Have you ever been a supervisor?
    When you have to deal with different elements on a team, even if the objective is the same, a supervisor or a leader has to use different strategies to influence each member of the team to move in the desired direction. Some team members respond to threats, some to strict guidelines and directives, some to carrot and stick, some to pot of gold approaches, and each approach is used because each team member is different and responds differently. This is in part based on how much leverage you have over each team member. Perhaps some report to you directly, perhaps some report to you only indirectly, others do not report to you at all. Yet you need to influence all of them toward the same goal. Thus the use of different strategies. You appear to think that the administration is not intelligent or realist enough to be considering the use of different strategies with different groups of countries to achieve the same goal.
    4) As for Baker's mission, he has achieved some nice joint statements. But as this Chicago Tribune story points out at this point they are merely words, because of how the Paris Club operates:
    [D]ebt relief for Iraq is by no means a done deal. The Paris Club always has made its debt decisions by the unanimous consent of its 19 permanent members, raising a high hurdle for a controversial subject.
    One member is cash-strapped Russia. It is owed more than $3.5 billion in country-to-country debt by Iraq and $52 billion in pending contract obligations - and has expressed no willingness to forgive any of it.

    Your are getting very Krugmanian here. Things are going for Baker much better than anyone expected and all you can say is, there is still a lot of work to do here. The fact is, you expected France and Germany to respond negatively to the memo and rebuff Baker. You were wrong.
    Furthermore, read the following link about Putin agreeing to start negotiations on Iraq’s debt.

    http://abcnews.go.com/wire/World/ap20031218_1509.html

    You might yet be proven right, but as of now the administration has the upper hand.

    sytrek

    posted by: sytrek on 12.18.03 at 08:47 AM [permalink]



    "A question, then: why are Egypt and Saudi Arabia on the list of countries that can receive contracts? Can a case be made that these countries were more cooperative than France, Germany or Russia prior to the war?"

    They certainly did not cause as many problems in the UN.

    "why are Egypt and Saudi Arabia on the list of countries that can receive contracts"

    As a guess I would say that because only the prime contracts are subject to this ban, it doesn't matter vis-a-vis Egypt and Saudi Arabia. Neither country has the kind of corporation that could make a successful bid on the prime contracts anyway. No need to exclude them, they have no competent corporation for these purposes anyway.

    posted by: Sebastian Holsclaw on 12.18.03 at 08:47 AM [permalink]



    Re#3

    Because,

    In the end we'er doing more then just Not rewarding France et al, for thier behavior, we are deliberatly and conscioulsy sending france a message that we have not forgotten their deliberate and vocal attacks on american poicy.

    Everyone wants to dress it up pretty, but it's straight up Tit for tat...

    Persoanlly I think the french deserve alot worse, say losing favor nation status.

    Eric-

    posted by: EWB on 12.18.03 at 08:47 AM [permalink]



    Excellent commentary on slate, and right-on-the-money. I find it quite amusing that you get these types of responses when the issues are broad, common-knowledge/common sense facts. It is no secret that State and Defense have fought or disagreed on virtually every detail of foreign policy since 9-11. This is not your subjective opinion, it's just plain fact. I'm not going to debate the decision to award or not award rebuilding contracts to non-coalition members. But making this type of terse announcement one day before you want them to forgive billions in debt (read:Help us with the costs of re-building the new Iraq), is just plain stupid. Furthermore, your article made no negative comments on the specific policy, rather the process in which it was being carried out. There seems to be support for that argument within the party as well as the administration. Agree with the policies or not, the point is that this administration needs to clean up the infighting and not take a hands-off approach when it comes to details of HOW the job gets done. I can't understand how some of these right-wing wacko's twist this story around as some kind of left-wing attack on the president. Unbelievable.

    posted by: Dave V on 12.18.03 at 08:47 AM [permalink]



    How important will the last point -- the one about Russia -- be?

    It could be quite important. A request to forgive Iraqi debt flies in the teeth of Putin's unapologetic attitude toward the Soviet past, and also of his inveterate promotion of the business interests of politically compliant Russian corporations. Just in terms of their domestic politics the French and German governments have much more room for flexibility, and whatever else may be true of their dealings with Saddam Hussein no one can say that his regime would not have existed without their help -- which certainly can be said of the former Soviet government.

    Bush, having as we all know looked into Putin's soul, has heretofore tip-toed around Russia's slurge back toward dictatorship, its war in Chechnya, and its frequently unhelpful attitude on some other questions. It will be interesting to see how his administration reacts if the Russians stonewall on Iraqi debt, as I expect they will.

    posted by: Zathras on 12.18.03 at 08:47 AM [permalink]



    "When White House officials tell the New York Times that they were surprised by the timing and wording of the memo, you know there was a screw-up."

    Do you really believe that anybody at the White House talks to the NYTimes? Oh, I know, its the NYTimes, they never lie!

    The Russians may well be broke, but that does not increase their bargaining leverage. They would much rather have 10% of what they are owed in cash now than sitting around and waiting until the cows come home to get 100%.

    Finally, I can see why your grandfather turned the store over to your nasty uncle Mo, instead of your father, "a dreamer" he said, "a great scholar, but no seichel."

    posted by: Robert Schwartz on 12.18.03 at 08:47 AM [permalink]



    I'm just thinking right on to the administration. You guys are wacky. Left punch with Perle from Defense, right hook with Baker, France dodging, offering some rope a dope. Now countries are talking about the Iraq debt. What's not to like? Is there really some problem here?

    I read the comments and feel like I'm missing some "big point."

    posted by: russ e on 12.18.03 at 08:47 AM [permalink]



    russ, russ, russ - the "big point" is that Bush is an idiot, and that therefor nothing he does can possibly achieve a positive result. If good things happen on his watch, well, that was just good luck, or happenstance, or something.

    The fact that Bush used some elementary negotiation tactics ("see the stick? Good. Now lets talk about carrots"), and is getting the predictable results (the French have shown no hesitation about dismissing US overtures out of hand in the past, but are suddenly willing to talk about debt relief) is minimized, with the usual tactic.

    Whenever Bush does well, expectations must be raised so that he falls short. What's that, the French and their pals are suddenly willing to talk about debt relief? Well, the fact that they didn't agree over breakfast to write off every single loan shows that Bush and Baker are fools!

    You know the drill.

    posted by: R C Dean on 12.18.03 at 08:47 AM [permalink]



    ALLCON:

    From the Credit where Credit is due department:

    RC Dean called this one correctly several days before it came to pass in the "Process Critique" thread.

    Curiously, Dan had to have read this post *before* his latest Slate piece went live, unchanged.

    oh well...

    posted by: TommyG on 12.18.03 at 08:47 AM [permalink]



    I guess your readers are a good representation of the confusion in US thinking on Iraq reconstruction. You see it IS possible for a nation to be, at the same time hypocritical AND incompetent on the same misinformed, misled ignorances. Bushcheney DO (if nothing else) represent.

    posted by: R H Pace on 12.18.03 at 08:47 AM [permalink]






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