Insight on the News Posted May 28, 2003 By By James Miskel

NO: Syria is surrounded by U.S. allies and poses no threat to the region or to the United States.

There are many good reasons for not seeking a regime change in Syria. So many good reasons, in fact, that one wonders whether the idea really is being seriously pursued or merely being trumpeted on the assumption that the regime in Damascus will be more likely to play ball with the United States if it thinks the idea is being seriously pursued.

Given the obvious power and effectiveness of the U.S. military as demonstrated in Afghanistan and Iraq - two locations where many in the West and the Middle East mistakenly were confident that the military would find the going slow and the casualties high - thoughtful people in Damascus and indeed throughout Syria would be justified in worrying that when the next shoe drops, it will land on them. Thoughtful people in Washington will, however, eventually conclude that, absent an unlikely provocation by Syria, the costs of dropping that shoe on Damascus will outweigh the benefits.

So much remains to be done in both Iraq and Afghanistan to solidify the achievements of Operation Iraqi Freedom and the ousting of the Taliban that it makes no sense to undertake another "makeover project." Winning the peace in Iraq and Afghanistan is turning out to be an extraordinarily expensive and time-consuming enterprise, and there is a lot riding on it. Two things in play are American prestige and credibility in the region. If we do not win the peace by institutionalizing representative governments and reviving the local economies, reform in this volatile and important region will be set back - regardless of the regime presiding in Damascus.

There continues to be fighting in both Iraq and Afghanistan. Indeed, the pace of military operations in Afghanistan actually seems to have been picking up in the last month. It has been 15 months since the Afghan Interim Authority headed by Hamid Karzai took over from the Taliban regime, and in another 15 months there probably still will be fighting outside Kabul and its environs.

Pacification may or may not take as long in Iraq, but it would be wise to assume that it will take at least 15 to 30 months after the Iraqi interim authority is installed. Unfortunately, there also are signs that enthusiasm for the reconstruction effort in Afghanistan already may be flagging. U.N. reports indicate that only 20 percent of the aid requirements for the current fiscal year have been met by international donations. Adding a third makeover project in Syria will only make the funding problem in Afghanistan worse and could draw resources away from the reconstruction efforts in Iraq.

So, why throw a third ball into the air while we still are struggling to juggle reconstruction balls in Iraq and Afghanistan? With three balls in the air, the odds of one or all of them being dropped would escalate sharply. A far better approach would be to concentrate on the job at hand in Iraq and Afghanistan. Syria should be put on the U.S. military's back burner until after reconstruction in Iraq and Afghanistan is solidified.

Another consideration is that a forced regime change in Syria will confirm many of the reservations that governments in the Middle East and elsewhere have about how the United States uses its awesome military power. International anxiety about American motives and power would not (and should not) worry us overly much if Syria were posing a clear and present danger to the United States or its allies. But that does not seem to be the case today.

Actually, Syria lately has been behaving more responsibly than it has in the past when it stoked the fires of civil war in Lebanon and aggressively promoted anti-Israeli terrorism. If press reports are to be believed, Damascus has been cooperating in the war on terrorism and has begun to turn back fleeing Iraqis at the border. The cooperation selectively may be targeted at terrorists whom Damascus is willing to throw overboard in order to protect its key client groups, such as Hezbollah. It is, however, enough of a step in the right direction to warrant forbearance at least until after other ways of influencing Syria have been attempted.

Forcing a regime change in Syria while Damascus actually is helping round up terrorists would send a very peculiar signal to the rest of the world about the benefits of cooperation with the United States. There are a number of nations that are working with us in the war on terror despite the rampant anti-American sentiment within their borders. This is the burden of leaders in Pakistan, Yemen and Saudi Arabia.

Regime change in Syria could well make genuine cooperation by such countries more difficult by fueling anti-Americanism. It also could lend weight to the arguments of those among the leadership who resist the political risks of cooperating with the United States in the first place.

Having a more pliant regime in Damascus probably would improve our ability to fight the global war on terrorism, but this would be true only if that new regime were capable of policing terrorist groups. That's the rub. No new regime will be as effective as the current one in doing this job.

Now that Saddam Hussein's regime in Iraq has fallen, Syria is politically, economically, and geostrategically isolated. Its isolation has given it the look of a country that virtually was designed for containment and nonmilitary forms of pressure. This means that many if not most of the important benefits that could accrue from regime change in Damascus very well might be achieved through other, lower-cost means.

Geostrategically, all of Syria's most powerful neighbors are U.S. allies (Turkey, Israel and now Iraq). To make matters worse from the Syrian perspective, U.S. military forces already are in Turkey and probably will be stationed nearby in Iraq for a considerable period of time. Syria's small coastline also can be intensively patrolled by the dominant naval force in the Mediterranean, the U.S. 6th Fleet. Thus, in a very real sense, Syria virtually is encircled by U.S. military and intelligence assets. Under these circumstances there is very little that Syria can do directly to threaten U.S. interests or destabilize its neighbors without running the risk of quick detection and decisive retaliation. Classic deterrence theory suggests that this threat of retaliation will keep Syria in its box at least until postwar reconstruction is completed in Iraq and Afghanistan and the United States stands down military deployments in the region.

Neither of Syria's other two bordering nations, Jordan and Lebanon, have enough strategic independence after the fall of Saddam in Iraq to defy U.S. efforts to hem in Syria, and neither is economically robust enough to prop up Syria in the face of sanctions. Turkey is Syria's principal source of the single most important economic commodity - water. Water scarcity already is a problem in Syria and the shortage will only get worse as the population continues to grow and urbanize.

Syria's political ideology - the Ba'ath Party's fusion of socialism, secularism and pan-Arabism - has been a desiccated husk for decades. Ba'athism is a spent shell, and there is no reason to worry that it somehow might catch fire across the region and inflame opinion in neighboring countries. In terms of President George W. Bush's argument that the West is not at war with Islam, there even could be a benefit to having an indigenous secular regime in Syria instead of another U.S.-imposed secular regime.

The existence of a Kurdish minority in Syria is another reason for a go-very-slow approach to regime change. Perhaps not as restive as their brethren in Iraq and Turkey, Syrian Kurds nevertheless may view a change in Damascus as an opportunity to begin asserting claims for autonomy and perhaps even support for joining an independent Kurdistan. Either way, it would be an unwelcome complication to the evolving situation in Iraq and an unnecessary irritant in U.S. relations with Turkey. Equitably accommodating Iraq's Kurdish minority without destabilizing Kurdish areas in Turkey could become the central challenge for the new regime in Baghdad. Meeting that challenge will be difficult enough without adding Syrian Kurds to the mix.

As important as the Middle East is, it is not the only region where there are security threats and foreign-policy issues. North Korea's nuclear programs, tensions between India and Pakistan, the ongoing turmoil in Colombia and Venezuela, and U.S. relations with NATO all warrant our attention. Now is not the time to dive deeper into the Middle East pool, particularly since it is possible that nonmilitary measures will be enough to deter Syrian adventurism until the day when the regime change occurs naturally, in response to domestic pressures. For the foreseeable future, the first priority of the United States should be to ensure that reconstruction in Iraq and Afghanistan succeeds. Events in Iraq will be strategically decisive in determining the course of U.S. relations in the Middle East. In comparison, events in an isolated and ideologically bankrupt Syria are a sideshow and should be treated as such.

Finally, it might be wise to reflect on the lessons learned in Operation Iraqi Freedom before launching a military campaign against Syria. A pause in operations also would give the United States an opportunity to replenish military supplies and equipment so that we do not end the next war (wherever it is fought) with nearly empty lockers.

The U.S. military is better than any other armed forces at adapting new tactics and technologies on the basis of "the last war." It is one of our competitive advantages, and we should use it. Syria will, of course, also try to draw lessons from the war in Iraq, but given its poor economy and strategic isolation, dramatic improvements in its military capabilities over the short term are exceedingly unlikely. The truth is that there are no quick fixes available to Syria. Accelerating the acquisition of weapons of mass destruction or increasing support for international terrorism once might have been perceived as quick fixes by the Syrian leadership - as they once were by the Iraqi leadership - but in today's environment they are too risky.

There are no substantial military risks to deferring action. We can afford to wait.

Miskel is a professor of national-security affairs at the U.S. Naval War College in Newport, R.I., and teaches courses on the Middle East at Providence College. He served on the National Security Council staff during the Reagan and George H.W. Bush administrations. This essay reflects his personal views, not the positions of the Naval War College or of the U.S. Navy.

In the second of our series on global institutions, we see how the Iraq conflict accelerated the crisis in the IMF, the World Bank and the WTO

Larry Elliott Wednesday May 21, 2003 The Guardian

Last autumn, Gordon Brown and his fellow finance ministers told the International Monetary Fund to draw up a plan that would give bankruptcy protection to countries. The idea was to give states the same rights as companies if they went belly-up, avoiding the expensive bail-outs that have accompanied the big financial crises of the past decade.

The IMF was given six months to come up with a blueprint, but when it reported back last month the idea was dead in the water. Billions of dollars from the bail-outs ended up in the coffers of the big finance houses of New York and George Bush was told not to meddle with welfare for Wall Street. The message was understood: the US used its voting power at the IMF to strangle the bankruptcy code at birth.

So much, so familiar. The US has wielded clout at the IMF and its sister organisation, the World Bank, since they were created at the Bretton Woods conference in 1944. Add in the World Trade Organisation, seen by its critics as the epitome ofUS corporate capitalism and you have the unholy trinity of globalisation.

The reality is somewhat more complex than this caricature would suggest. There is indeed a crisis looming in the global economic institutions but the problem is less that the Bush administration is seeking to carpet bomb the World Bank, the IMF and the WTO with neo-liberal ideas - rather that the US shows signs of giving up on multilateralism in favour of cutting bilateral deals with willing (and weaker) partners.

First, some background. The Bretton Woods institutions were the economic arm of the new world order designed to ensure there was no repetition of the Great Depression. Collective action at the economic level was seen as just as important as collective action in the political sphere. But over the years, the IMF changed. Set up to combat global market failure, it saw free markets as the solution to every problem in every country, every time. The IMF (and the World Bank) reflected the economic orthodoxy, championing privatisation, liberalisation and tough anti-inflation strategies when they became fashionable in the west.

Europe has more votes than the US, but has rarely dissented from Washington's world view. To complete the picture of a rich-country stitch-up, a European was always appointed to head the IMF, while the US picked the president of the World Bank.

The WTO is a different beast. Created in 1995, it has two safeguards to protect the interests of smaller countries: a one-member, one-vote decision-making structure and an arbitration system under which countries such as Costa Rica, Venezuela and Chile have been able to force the US to change its trade practices or pay sanctions in compensation. Bill Clinton saw this as a price worth paying for opening up global trade to American companies.

If anything, US control-freakery was more in evidence under Clinton than it has been under his successor, because Bush is more of a neo-conservative. In the late 1990s, Larry Summers, Clinton's treasury secretary, was in day-to-day contact with the IMF, letting it know what the administration wanted, and arranged for Joseph Stiglitz to be ousted as the World Bank's chief economist after he criticised the US treasury and the IMF's handling of financial crises.

Bush, by contrast, has pursued much more of an overt America-first policy, using the multilateral system only when it suits the administration. US aid is being channelled into poor countries through the Millennium Challenge Account. The money comes with strings attached: to liberalise service sectors and accept US intellectual property laws. Similarly, the White House does not support the World Bank's fast-track initiative under which rich countries would guarantee the resources to help developing countries implement improvements in education.

In trade policy, the US has been following a twin-tracked strategy, putting forward ambitious proposals for liberalisation at the WTO, but also cutting bilateral deals with Singapore and Chile that provide more favourable terms for US firms than could be negotiated multilaterally.

Although many in the US strongly oppose the neo-conservative agenda, there are two problems for those seeking change. The first is that the IMF, the World Bank and the WTO are largely friendless bodies. Under its president, James Wolfensohn, the Bank has gone the furthest in reaching out to its critics, but those on the free-market right who see the Bretton Woods institutions as expensive, statist bureaucracies are mirrored by those on the left who view them as agents of neo-liberal oppression. "The truth is that you can't defend what these institutions currently are", says Kevin Watkins of Oxfam, "but they were part of a Keynesian political project, and it is up to the left to make them into something better."

Something better would include an open and meritocratic system for the top jobs at the World Bank, IMF and WTO, rather than the unseemly horse-trading that currently takes place. It would include stopping the IMF and the Bank colonising the territory of other UN organisations. It would involve the Bretton Woods recognising that in a deflationary world there is a need to return to their original pro-growth mandate. And it would involve the other big shareholders - the Europeans - acting in concert to put pressure on Washington.

Alex Wilkes, who runs the Bretton Woods project, a watchdog body set up by aid agencies to monitor the IMF and the World Bank, says there are few signs of this happening. There is too much grandstanding, he says, too much of a tendency to take up symbolic positions.

Watkins of Oxfam says the one arena where the EU flexes its muscles is the WTO, but only to put European corporate demands on the global agenda. Meanwhile, he believes the US is marginalising and downgrading the Bretton Woods institutions just as it is the UN. "This is a critical juncture. Iraq is accelerating the demise of multilateralism."

larry.elliott@guardian.co.uk

nzoom.com

Concerned that Iraq's oil might fall under the control of US-led coalition forces, financier and philanthropist Georges Soros has launched an "Iraq Revenue Watch" to ensure that the Iraqi people will benefit from their own resources.

Watch will monitor the defeated country's oil industry, which should be managed "with the highest standards of transparency and that the benefits of national oil wealth flow to the people of Iraq".

Soros, who made a fortune from foreign currency trading, is well known in Eastern and Central Europe and Central Asia for his humanitarian programs, which are managed by his New York-based Open Society Institute.

The institute has criticised oil-rich countries like Nigeria and Venezuela for squandering their natural resources and for the lack of proper stewardship, which has often led to political abuses, corruption and a failure to raise living standards.

The institute has called on the United States to set up rules to ensure completetransparency in using Iraq's oil to benefit the Iraqi people.

Soros called on the UN Security Council to modify the latest draft of a resolution written by the US and Britain to give an explicit and important role to the UN and to define the responsibilities of those two countries as the occupying powers in Iraq.

He said at a press conference at UN headquarters that the revised draft was still too vague on the UN role.

"If approved (by the council), the resolution ... would establish an indefinite American protectorate of Iraq sanctioned by the United Nations and paid for by Iraq's oil revenues," the Open Society Institute said in a press statement.

"It would also undermine international law," the statement said.

"The UN and the secretary-general should be given a more substantial role in Iraq."

Source: AAP

<a href=ogj.pennnet.com>Oil & Gas JournalMaureen Lorenzetti Washington Editor

WASHINGTON, DC, May 15 -- US House congressional leaders Wednesday sharply criticized the United Nations' management of oil revenues under its Iraq oil-for-aid program and called for strong US involvement in controlling future oil receipts.

"I see no need to continue the United Nations' Oil-For-Food Program and to allow the UN to control oil revenues that rightly belong to the Iraqi people, when the UN lacked the will to enforce its own sanctions against a tyrant and thereby liberate the Iraqi people from unspeakable atrocities," said House Energy and Commerce Committee Chairman Billy Tauzin (R-La) at a subcommittee hearing on the subject. "Continuing the Oil-for-Food Program will only guarantee to again enslave the Iraqi people by denying them the only means they have to preserve the freedom they now have."

House Subcommittee Energy and Air Quality Chairman Joe Barton (R-Tex.) said he will send a letter to the UN asking that Congress receives a "full accounting" of the current oil aid program. He acknowledged that Congress does not have the authority to subpoena the UN's records, "but I encourage the UN to fully explain this program that has not been externally audited." Barton has been a frequent critic of the UN program since it was established in the late 1990s as a way to avert the humanitarian crisis that developed in the wake of Gulf War I and subsequent international sanctions.

The US is proposing that the UN begin phasing out the oil-for-aid program over a 4-month period before the current program expires June 3. It also is seeking a detailed resolution that lifts sanctions and protects the interim government from oil revenue claims so oil can start flowing.

US officials say the resolution "will abolish outdated provisions relating to the sale of oil and other goods and facilitate Iraq's ability to trade freely in the international market," according to a Department of State fact sheet.

A "reconstituted" Iraqi State Oil and Marketing Organization (SOMO) will conduct oil sales consistent with international market practices, DOS said. "These transactions will be audited by independent public accountants, who will report their findings to an international advisory board that will include representatives from the UN, World Bank, and IMF (International Monetary Fund). To ensure that the Iraqi people are not penalized because of (deposed ruler) Saddam (Hussein) and can receive the benefits of their national patrimony, oil sales will be immunized against attachment by international creditors or others with claims against the former regime."

US officials are calling for a vote next week, but there is resistance from France and Russia, whose officials say taking such a sweeping action would be premature, given that it is unclear how an Iraqi government will pay existing debt. Some US lawmakers are calling on Iraq's creditors to forgive much of that outstanding debt.

Experts testify Oil experts representing government, academia, and the private sector also testified before the subcommittee.

Robert Ebel, director of the energy program at the Center for Strategic and International Studies in Washington, DC, said a number of interested observers make the interpretation that, under the Geneva Convention, the occupying power has the right to sell the oil and to use the income for the restoration of order and the benefit of the Iraqi people. He also noted that this is not a universally held position. "Not all would agree. Nonetheless, is the United States today an occupying power, having shifted from that of a liberating power? Apparently so, and that means the Geneva Convention can apply."

Ebel added that accepting the role of an occupying power raises an associated question: What is the status of those oil contracts that have been signed with Russia and China? Will they be honored?

"Under international law, it would seem that these rights should be protected in that contract sanctity is maintained in the event of a change in government."

Jim Barnes, research fellow at the James Baker III Institute for Public Policy at Rice University, said that oversight of oil revenue is best handled by multinational agencies such as the International Monetary Fund and World Bank. "The fund will presumably be involved in such critical matters as rescheduling Iraqi debt in any case; the bank will no doubt be called upon to play an important role in Iraqi reconstruction."

The Bush administration proposals call for the UN and the IMF to be part of an advisory board that would have auditing authority over a fund that would serve as a repository for Iraq's oil revenues.

Barnes noted that significant funds remain in escrow accounts under the current UN aid program. "These funds need to be disbursed to pay for emergency aid to Iraq. It might be best to permit the UN to continue managing these funds, on an expedited and transparent basis, until the balance is liquidated." The US proposal before the UN suggests something along those lines.

Testifying on Iraq's role in international oil markets, Guy Caruso, administrator of the Energy Information Administration, said the country is "crucial" to long-term world oil supplies but, in the short term, the market has adjusted to its absence. Despite several disruptions in supply since last November (Venezuela, Nigeria, and Iraq), and low inventories, the prospects for improvements in short-term world oil supply are good over the next several quarters.

He said that analysts assume that as disrupted sources move back toward normal production (now particularly Iraq), the increased production from those areas will be accommodated by reductions in supply from other OPEC producers. "Thus the development of excess supplies that might sharply pressure prices in the downward direction is not expected over the next several quarters," he said.

Correction A May 15 article about the U.N. Security Council incorrectly attributed a quotation in the final paragraph. It was Secretary of State Colin L. Powell who said: "There are some outstanding issues, and we will be working on these issues in the spirit of partnership in trying to come to a solution." News From Iraq • Plan to Secure Postwar Iraq Faulted (The Washington Post, May 19, 2003) • Iraqi Clerics Urge Anti-U.S. Protest (The Washington Post, May 19, 2003) • Kurds' Influence in Kirkuk Rises Along With Discord (The Washington Post, May 19, 2003) • More News from Iraq

Subscribe to The Post By Colum Lynch Washington Post Staff Writer Thursday, May 15, 2003; Page A24

UNITED NATIONS, May 14 -- The Bush administration pressed the U.N. Security Council today to vote as early as next week on a resolution that would lift sanctions on Iraq and permit the United States and its military allies to export Iraqi oil to finance the country's reconstruction.

John D. Negroponte, the U.S. ambassador to the United Nations, said that the 15-nation council's failure to act quickly to end the 13-year-old embargo could jeopardize the country's capacity to make a swift recovery from years of war and misrule. "The sanctions need to be lifted as soon as possible," he told reporters after a closed council meeting. "The oil tanks are almost full in Iraq; the crude is about to reach the point of just sitting there and waiting to be exported."

In an attempt to broaden support in the council, Negroponte offered to circulate a "modified" draft resolution Thursday that "attempts to take into account many" of the council's concerns over the United Nations' role in Iraq.

U.S. officials said the administration is considering new language that would help assure the council that it intends to give the United Nations a significant role in postwar Iraq and subject use of Iraqi oil revenue to independent international scrutiny. They said they are also prepared to commit to providing the council with periodic briefings on the status of U.S.-led efforts to disarm Iraq.

But the officials suggested that the administration would insist on retaining control of the country's oil revenue and achieving a clear council mandate to rule the country until a democratically elected government is in place.

"We put forward a resolution that is pretty minimalist in terms of what we need to be able to do to help the Iraqi people to establish a democratic path," national security adviser Condoleezza Rice said at a news conference at the Foreign Press Center in Washington. "And so, we expect cooperation from all Security Council members."

Although there is wide support in the council for an end to sanctions, Russia, France, Germany and other key members assert that the U.S. resolution lacks a central enough role for the United Nations, and grants excessive powers to the United States and Britain to manage Iraq's economic and political future.

Several representatives raised concerns about a provision in the U.S. resolution, which Britain and Spain co-sponsored, that would grant the United States and its allies control over Iraq's oil and shield Iraq's oil revenue from foreign debtors owed billions of dollars. "So far, immunity has been granted only to the U.N.," Germany's U.N. Ambassador Gunter Pleuger told Bloomberg News. "If you protect a state, what would prevent Kuwait or Venezuela from saying, 'We are oil producers, too, and want immunity.' "

Russia and France, two key commercial partners with the former Iraqi government, have also expressed concern that a U.S. proposal to phase out the U.N.-run oil-for-food program in four months would place ordinary Iraqis who rely on it for their subsistence at risk and jeopardize more than $10 billion in contracts for products that were approved before the fall of Iraqi president Saddam Hussein.

Under the terms of the oil-for-food deal, which was established in December 1996, Iraq is permitted to export oil, subject to U.N. supervision, to purchase food, medicine and other humanitarian goods.

The U.S. resolution would transfer authority to spend and manage Iraq's oil proceeds from the United Nations and Iraq to the United States and Britain. A transitional Iraqi government, which the United States is hoping to put in place in a matter of weeks, would have a consultative role in determining how their oil profits are spent.

An international advisory board, including representatives from the World Bank, the International Monetary Fund and the United Nations, would have the power to chose auditors to monitor the use of Iraq's oil revenue.

French Foreign Minister Dominique de Villepin told the French newspaper Le Monde this week that there must be "undisputed international control" over Iraq's oil industry and revenue. He also insisted that the United Nations' role in overseeing the establishment of a new Iraqi government must be strengthened.

"Who, if not the United Nations, can confer international legitimacy?" De Villepin said. "At the end of an initial phase of making the country safe, the United States will have progressively to take responsibility for the political transition."

Despite the differences, most council members expressed a desire to move beyond the political battles that sharply divided the council before the war. Russian Foreign Minister Igor Ivanov, speaking in Moscow with Secretary of State Colin L. Powell, said that Russia has "decided not to focus on our past disagreements" over the war. "There are some outstanding issues, and we will be working on these issues in the spirit of partnership in trying to come to a solution," he said.