The Telegraph
Since 1st March, 1999
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India shut out of Iraq bounty
- Jingle of cash to accompany march of soldiers

Washington, Dec. 10: India, along with leading opponents of the war in Iraq — Russia, France, Germany and Canada — has been barred from contracts worth $18.6 billion to rebuild Iraqi infrastructure, which are to be awarded by the Americans shortly.

In a memo issued by deputy secretary of defence Paul Wolfowitz on Friday, but made public yesterday, the Bush administration has claimed that the exclusion is necessary to protect “the essential security interests of the US”.

Wolfowitz made it clear that reconstruction bids are also being used as carrots to get more countries to contribute troops to Iraq and to ensure that governments which have already sent troops do not buckle in the face of continuing death and mayhem created by insurgents opposed to US occupation.

“Limiting competition for prime contracts will encourage the expansion of international cooperation in Iraq and in future efforts,” the memo said.

“The limitation of sources to prime contractors from those countries (which are coalition partners) should encourage the continued cooperation of coalition members.”

The lucrative contracts are for equipping the Iraqi army, repairing the electrical sector, public works and water projects, rebuilding the housing and health sectors, restoring the oil infrastructure as well as for transportation and communication projects.

The memo lists the US, Iraq and 61 other countries which are eligible to take part in the reconstruction work. It includes such nondescript entities as Palau, Rwanda, Marshall Islands and Micronesia, some of which are actually in need of help with their own infrastructure and reconstruction.

Foreign Aid Watch, a non-government organisation (NGO) here, noted today in response to Wolfowitz’s memo that Kazakhstan was included on the bid list after it sent a mere 25 troops to Iraq. “Perhaps if France, Germany and Russia had sent a ‘Marching Band’ to Iraq, they, too, would have been eligible to cash in on the US taxpayer’s $18.6 billion which amounts to approximately $74.40 per person in the US,” the NGO noted.

The US decision drew stinging criticism from countries that have been made ineligible for participation in the rebuilding effort. Canada’s deputy Prime Minister John Manley said: “It would be difficult for us to give further money for the reconstruction of Iraq. To exclude Canadians just because they are Canadians would be unacceptable if they accept funds from Canadian taxpayers for the reconstruction of Iraq.”

A spokesman for Canadian Prime Minister Jean Chretien pointed out that Canada had already contributed more than $190 million for Iraq’s reconstruction.

India has not yet commented on the US decision, but Russian foreign minister Igor Ivanov showed what could be a model for India to follow. Ivanov threatened that Russia would not restructure the debt owed by Baghdad to Moscow, as sought by Washington.

“Iraq’s debt to the Russian Federation comes to $8 billion and as far as the Russian government’s position on this, it is not planning any kind of a write-off of that debt,” Ivanov told a news conference in Berlin. “Iraq is not a poor country.”

The US is expected to ask India to write off the money it is owed by Iraq when presidential envoy James Baker travels to Delhi shortly. Like Canada, India has pledged its taxpayer’s money for humanitarian work in Iraq since the war.

German foreign minister Joschka Fischer said: “We noted with astonishment today the reports (about Wolfowitz’s memo) and we will be speaking about it with the American side.” France, too, criticised the Americans.

Reflecting the changing mood within the US on Iraq, there was criticism of the decision among American leaders on both sides of the political divide. Senator Joseph Biden, the seniormost Democrat on the Senate Foreign Relations Committee, described the Wolfowitz memo as a “totally gratuitous slap” that “does nothing to protect our security interests and everything to alienate countries we need with us in Iraq”.

Congressman Christopher Shays, a Republican from Connecticut, who has just returned from Iraq, told The New York Times that “it strikes me that we should do whatever we can to draw in the French, the Germans, the Russians and others into the (Iraqi peace) process. I would expect that most of the contracts would go to countries who have done the heavy lifting, but I wouldn’t want to see any arbitrary effort to shut anyone out”.

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