Diplomatic constraints, economic freedom
( 2003-09-23 22:09) (Economist)
As President George Bush prepares to address the United Nations General Assembly on Tuesday, he will be hoping to push through a new UN resolution that would encourage other countries to contribute troops and money to Iraq. Liberalisation of the Iraqi economy is also in the air.
NOT since pre-war days have American and European leaders engaged in such whirlwind diplomacy over Iraq. On Saturday September 20th, Britain¡¯s prime minister, Tony Blair, met the leaders of France and Germany in Berlin to discuss an American-backed United Nations resolution that would authorise a multinational force to patrol the country. Colin Powell, America¡¯s secretary of state, has been dashing around trying to persuade members of the Security Council to pass the resolution (which America hopes would also encourage other countries to donate aid money to Iraq). President George Bush will do the same this week: he is addressing the UN General Assembly on Tuesday and will spend extra time glad-handing swing voters on the Security Council. Later this week, Mr Bush will meet host Russia's president, Vladimir Putin, for more talks that will cover Iraq.
The White House posts President Bush's statements on Iraq. See also the US State Department's Iraq information. The UN's Iraq section gives information on Iraq-related Security Council resolutions. The German government, the French presidency, the French Ministry of Foreign Affairs and the British government issue statements on Iraq. The US Department of Defence and US Central Command post news on the security situation. The Coalition Provisional Authority sets out the proposed economic reforms.
Will all this rushing around achieve anything? Not if Saturday¡¯s meeting between Jacques Chirac of France, Gerhard Schr?der of Germany and Mr Blair is any precedent. After an afternoon of talks¡ªthe first face-to-face meeting between the three leaders since the war¡ªthe question of Iraq still caused sharp disagreements. ¡°On Iraq, our views are not quite convergent,¡± said Mr Chirac, in a pleasant bit of understatement. ¡°We all want to see...a key role for the UN,¡± said Mr Blair, vaguely and inconclusively.
The difference in views between, on the one hand, America and Britain (which led the invasion of Iraq) and, on the other, France and Germany (which opposed the war) will be more prominently on display when world leaders gather at the UN¡¯s headquarters this week. Mr Bush is also due to have private meetings with Mr Schr?der and Mr Chirac.
All sides have said that they do not want to dwell on past disputes but rather to focus on finding the best way to get Iraq functioning again. This will not be easy. Germany has made conciliatory noises towards America, with Mr Schr?der writing in the New York Times that Germany was ready to provide humanitarian aid to Iraq and help train Iraqi policemen (though this is hardly a promise of billions of dollars, as America would prefer). As before the war, France and America in particular seem far apart. France is agitating for self-government for Iraqis as soon as possible. Mr Chirac has urged America to transfer sovereignty to the all-Iraqi Governing Council within a month, with full power to follow shortly. America thinks this is ridiculous¡ªit would, Washington argues, mean handing power to Iraqis before the Governing Council (composed largely of former exiles) gains legitimacy, and would thus consign the country to more chaos. In his speech on Tuesday, Mr Bush will firmly insist that America was right to invade Iraq, and will not concede to French demands for a swift turnover of sovereignty, according to the New York Times. The French are expected to abstain from voting on the UN resolution rather than vetoing it.
While diplomatic wrangles absorb world leaders at the UN, Iraqis have been formulating new ways to jump-start their shattered economy. America is pressing other countries to forgive Iraq¡¯s debts, estimated at $130 billion. On Sunday in Dubai, the recently appointed Iraqi finance minister, Kamel al-Keylani, announced strong measures to open the country¡¯s previously closed economy to foreign investment. The new laws, already approved by America¡¯s Coalition Provisional Authority, set the top rate of corporate and personal income tax at a lowly 15%. (By way of comparison, Russia took a similar route three years ago, simplifying its tax code and introducing a 13% flat tax on personal income.) Entrance by foreign banks will also be eased: up to six will be able to buy Iraqi banks in full, and others will be able to buy stakes of 50%. Natural resources¡ªin other words, oil¡ªwill stay in Iraqi hands.
Some Iraqis have already voiced worries that the new laws will hurt Iraqi
entrepreneurs, as better-funded foreign businesses edge out local start-ups. But
just how many foreign businesses will take up Mr al-Keylani¡¯s inducements is
unclear. Most will be wary of Iraq¡¯s wobbly security environment. On Monday, a
car bomb exploded outside the UN¡¯s offices in Baghdad, killing at least one
person and stirring raw memories of the bomb in the same spot last month that
left 23 people dead. One of the Governing Council¡¯s 25 members was also shot at
the weekend, and remains in a critical condition; she was presumably targeted by
militants for ¡°collaborating¡± with Americans. Few soldiers, let alone private
companies, want to work in the midst of such relentless
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