No Weasels Need Apply

The memo lists 63 countries whose companies are eligible to compete for 26 prime reconstruction contracts that the Defense Department and other U.S. agencies plan to award by Feb. 3. That list includes Australia and Britain, major members of the U.S.-led coalition in Iraq, as well as others such as Azerbaijan, Palau, Rwanda and Colombia.

Wolfowitz said in his memo that coalition partners "share in the U.S. vision of a free and stable Iraq. The limitation of sources to prime contractors from these countries should encourage the continued cooperation of coalition members."

The $18 billion is taxpayer money, "so the U.S. should have a say in how that is spent," a senior State Department official said last night. "We're spending it on those who have already contributed to Iraq. . . . They contributed blood and treasure to liberate Iraq."

Actions have consequences.

Oh, there's also precedent in international law that allows Iraq to repudiate the odious debt owed to countries like France and Russia.

Debts are "odious" when they are contracted without the consent of the people and not spent in their interests and when the creditor is aware of this. The doctrine of odious debts was formalised in 1927 by Alexander Sack, a Russian international law scholar working in Paris.

"When a despotic regime contracts a debt, not for the needs or in the interests of the state, but rather to strengthen itself, to suppress a popular insurrection, etc, this debt is odious for the people of the entire state. This debt does not bind the nation; it is a debt of the regime, a personal debt contracted by the ruler, and consequently it falls with the demise of the regime. The reason why these odious debts cannot attach to the territory of the state is that they do not fulfil one of the conditions determining the lawfulness of State debts, namely that State debts must be incurred, and the proceeds used, for the needs and in the interests of the state. Odious debts, contracted and utilised, for purposes which, to the lenders' knowledge, are contrary to the needs and the interests of the nation, are not binding on the nation - when it succeeds in overthrowing the government that contracted them - unless the debt is within the limits of real advantages that these debts might have afforded. The lenders have committed a hostile act against the people, they cannot expect a nation, which has freed itself of a despotic regime, to assume these odious debts, which are the personal debts of the ruler."

In many cases countries have taken on the odious debt of former dictatorships as a result of political pressure or fear of being penalised by creditors in the future. There are, however, some clear precedents for odious debt being repudiated, such as Mexico (1867), Cuba (1898) and Poland (1919). Jubilee Iraq is not proposing immediate repudiation, although Iraq may choose to do this if any creditors refuse arbitration. Instead we are working to set up an arbitration tribunal where creditors who wish to ask repayment from the Iraqi people for debts which they lent to Saddam's regime can attempt to demonstrate that their loans were not odious. There was a similar arbitration process between Costa Rica and Britain in 1923. In the case of Iraq the tribunal will be much more complicated since there are dozens of creditors. Moreover it may choose to handle reparation claims as well as debts resulting from standard loans.