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Bush friend to handle iraqi international debt { December 6 2003 } Original Source Link: (May no longer be active)
http://www.sunspot.net/news/bal-te.baker06dec06,0,2554555.story?coll=bal-home-headlineshttp://www.sunspot.net/news/bal-te.baker06dec06,0,2554555.story?coll=bal-home-headlines
Bush family ally drafted to help Iraq
James Baker, ex-secretary of state, to seek support of major world leaders
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By Mark Matthews
Sun National Staff
Originally published December 6, 2003
WASHINGTON - With continued instability in Iraq posing one of the biggest threats to his re-election, President Bush tapped yesterday a trusted family troubleshooter, former Secretary of State James A. Baker III, to enlist support from major world leaders for Iraq's transition to self-governance.
The White House said Baker's assignment will be to "forge an international consensus" on restructuring Iraq's crippling $120 billion international debt, a key hurdle in putting the country on a sound economic footing before the U.S. occupation ends.
Baker will be dispatched as a special presidential envoy to deal with heads of state in Asia, Europe and the Persian Gulf, reporting directly to Bush. While focused on debt relief, Baker's talks may well encompass broad issues involving Iraq's future and its relations with other countries, and thus give him a voice in American policy.
"Heads of state don't deal with mechanics," a senior administration said yesterday. "Where those conversations go, I don't know. He doesn't know."
In a statement announcing Baker's appointment, Bush said the debt incurred by Saddam Hussein "endangers Iraq's long-term prospects for political health and economic prosperity," and said it must be resolved in a way "that does not unjustly burden a struggling nation at its moment of hope and promise."
Bush said Baker "will lead an effort to work with the world's governments at the highest levels, with international organizations and with the Iraqis in seeking the restructuring and reduction of Iraq's official debt."
The dispatching of Baker, who will be assigned a U.S. government plane, is the latest move in a strategy that the Bush administration hopes will provide a smooth transition to self-rule and enable the United States to reduce its role in Iraq substantially.
The United States has pledged to return full sovereignty to Iraqis by the middle of next year, ending the role of the U.S.-led occupation authority. U.S. forces are likely to remain for some time after that under an agreement with a new Iraqi government. Continued bloodshed and turmoil in Iraq are widely considered one of the key obstacles to Bush's re-election next year now that the economy appears to be improving.
American efforts to develop a representative, democratic government in Iraq have been problematic. And the top U.S. administrator, L. Paul Bremer III, said in Baghdad yesterday that insurgents would likely become more violent between now and the handover on June 30.
"In the immediate phase ahead of us, between now and the end of June, we will actually see an increase in attacks, because the people who are against us now realize that there's huge momentum behind both the economic and political reconstruction of this country," Bremer said.
Trusted friend
Baker, 73, has frequently been summoned to help the Bush family at times of political need, running the elder Bush's presidential campaigns and leading the successful legal fight over the disputed Florida ballots in 2000 for the younger Bush.
A lawyer-politician who served as secretary of state under the president's father and secretary of the Treasury and White House chief of staff under Ronald Reagan, Baker has long experience negotiating with world leaders. Winning debt relief for Iraq likely will involve dealing with broad questions of what post-war Iraq will look like, as well as the demands and grievances of a long list of creditor nations.
About $40 billion of Iraq's debt is owed to Russia, Japan, France, Germany, the United States and other countries that make up the Paris Club, the 19-nation forum through which debtor countries' repayment problems are handled. About $80 billion is owed to Arab countries and nations outside the Paris Club.
Three of Iraq's leading lenders from the past, France, Germany and Russia, have signaled a willingness to ease Iraq's debt repayment terms.
But all three opposed the U.S. invasion of Iraq and have since demanded a much stronger international role in rebuilding the country than the United States has allowed. France also wants a quicker transfer of sovereignty to Iraq from the U.S.-led Coalition Provisional Authority to Iraqis.
'Significant efforts'
French Foreign Ministry spokesman Herve Ladsous, meeting with reporters here this week, indicated that discussions on Iraq's debt would probably have to deal with broader policy questions.
"When the time comes we are ready to be fairly generous," he said, but added that France, and possibly other members of the Paris Club, would insist on reaching agreement with a sovereign government of Iraq that had been recognized through a United Nations resolution.
Russia might use its Iraqi debt renew its stake in Iraq's oil industry.
Kuwait and the other oil-rich Persian Gulf states, which are owed tens of billions of dollars borrowed by Iraq to finance its war against Iran in the 1980s, are considered reluctant to let go of this important financial leverage over Iraq until they are assured that it will be a stable, friendly neighbor.
In addition to its debt, Iraq has about $170 billion of unsettled claims against it for reparations stemming from the 1990 invasion of Kuwait.
"It's going to take some significant efforts to get everyone on the same page," said Bathsheba N. Crocker, an expert in post-conflict reconstruction at the Center for Strategic and International Studies. "That's why we need someone like Baker, who is at a senior level and has the ear of the president."
Baker is now a senior partner in the law firm of Baker Botts and senior counselor of the Carlyle Group, an investment firm.
Copyright © 2003, The Baltimore Sun
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