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services chronicle current affairs pdf Foreign aid foreign trade and foreign direct
investment (FDI) have become weapons of mass persuasion deployed in the
building of both the pro-war pro-American coalition of the willing and the
French-led counter coalition of the squealing. By now it is clear that the
United States will have to bear the bulk of the direct costs of the actual
fighting optimistically pegged at c. $200 billion. The previous skirmish in
Iraq in 1991 consumed $80 billion in 2002 terms - nine tenths of which were
shelled out by grateful allies such as Saudi Arabia and Japan. Even so the USA
had to forgive $7 billion of Egyptian debt. According to the General Accounting
Office another $3 billion were parceled at the time among Turkey Israel and
other collaborators partly in the form of donations of surplus materiel and
partly in subsidized military sales. This time around old and newfound friends
- such as Jordan an erstwhile staunch supporter of Saddam Hussein - are likely
to carve up c. $10 billion between them says the Atlanta Journal-Constitution.
Jordan alone has demanded $1 billion. According to the Knight Ridder Newspapers
in February 2003 an Israeli delegation has requested an extra $4-5 billion in
military aid over the next 2-3 years plus $8 billion in loan guarantees. Israel
the largest American foreign and military aid recipient is already collecting
c. $3 billion annually. It is followed by Egypt with $1.3 billion a year -
another rumored beneficiary of $1 billion in American largesse. Turkey stands
to receive c. $6 billion for making itself available (however reluctantly
belatedly and fitfully) as staging grounds for the forces attacking Iraq.
Another $20 billion in loan guarantees and $1 billion in Saudi and Kuwaiti oil
have been mooted. In the thick of the tough bargaining with Turkey demurring
and refusing to grant the USA access to its territory the International
Monetary Fund - thought by many to be the long arm of US foreign policy -
suddenly halted the disbursement of money under a two years old standby
arrangement with the impoverished country. It implausibly claimed to have just
unearthed breaches of the agreement by the Turkish authorities. This systemic
non-compliance was being meticulously chronicled - and scrupulously ignored by
the IMF - for well over a year now by both indigenous and foreign media alike.
Days after a common statement in support of the American stance the IMF
clinched a standby arrangement with Macedonia the first in two turbulent years.
On the same day Bulgaria received glowing - and counterfactual - reviews from
yet another IMF mission clearing the way for the release of a tranche of $36 million out of a loan of $330
million. Bulgaria has also received $130 million in direct US aid between
2001-3 mainly through the Support for East European Democracy (SEED) program.
But the IMF is only one tool in the administrations shed. President Bush has
increased Americas foreign aid by an unprecedented 50 percent between 2003-6 to
$15 billion. A similar amount was made available between 2003-8 to tackle AIDS
mainly in Africa. Half this increase was ploughed into a Millennium Challenge
Account. It will benefit countries committed to democracy free trade good
governance purging corruption and nurturing the private sector. By 2005 the
Account contained close to $5 billion and is being replenished annually to
maintain this level. This expensive charm offensive was intended to lure and
neutralize the natural constituencies of the pacifistic camp non government organizations
activists development experts developing countries and international
organizations. As the war drew nearer the E10 - the elected members of the
Security Council - also cashed in their chips. The United States has softened
its position on trade tariffs in its negotiations of a free trade agreement
with Chile. Immigration regulations were relaxed to allow in more Mexican
seasonal workers. Chile received $2 million in military aid and Mexico $44
million in development finance. US companies cooperated with Angola on the
development of offshore oilfields in the politically contentious exclave of
Cabinda. Guinea and Cameroon absorbed dollops of development aid. Currently
Angola receives c. $19 million in development assistance. Cameroon already
benefits from military training and surplus US arms under the Excess Defense
Articles (EDA) program as well as enjoying trade benefits in the framework of
the Africa Growth and Opportunity Act. Guinea gets c. $26 million in economic
aid annually plus $3 million in military grants and trade concessions. The
United States has also pledged to cause Iraq to pay its outstanding debts
mainly to countries in Central and East Europe notably to Russia and Bulgaria.
Iraq owes the Russian Federation alone close to $9 billion. Some of the Russian
contracts with the Iraqi oil industry thought to be worth dozens of billions of
dollars may even be honored by the victors promised the Bush administration. It
reneged on both promises. Debt relief reduced Iraqs debt by 90% and all Saddam
Hussein era contracts were vitiated. Thus the outlays on warfare are likely be
dwarfed by the price tag of the avaricious constituents of president Bushs
ramshackle coalition. New York Times columnist Paul Krugman aptly christened
this mass bribery The Martial Plan. Quoting some observers he wrote The
administration has turned the regular foreign aid budget into a tool of war
diplomacy. Small countries that currently have seats on the U.N. Security
Council have suddenly received favorable treatment for aid requests in an
obvious attempt to influence their votes. Cynics say that the coalition of the
willing President Bush spoke of turns out to be a coalition of the bought off
instead. But this is nothing new. When Yemen cast its vote against a November
1990 United Nations Security Council resolution authorizing the use of force to
evict Iraq from Kuwait - the United states scratched $700 million in aid to the
renegade country over the following decade. Nor is the United States famous for
keeping its antebellum promises. Turkey complains that the USA has still to
honor its aid commitments made prior to the first Gulf War. Hence its
insistence on written guarantees signed by the president himself. Similarly
vigorous pledges to the contrary aside the Bush administration has allocated a
pittance to the reconstruction of Afghanistan in its budgets - and only after
it is prompted to by an astounded Congress. Macedonia hasnt been paid in full
for NATOs presence on its soil during the Kosovo conflict in 1999. Though it
enjoyed $1 billion in forgiven debt and some cash Pakistan is still waiting for
quotas on its textiles to be eased based on an agreement it reached with the
Bush administration prior to the campaign to oust the Taliban. Congress is a
convenient scapegoat. Asked whether Turkey could rely on a further dose of
American undertakings Richard Boucher a State Department spokesman responded
truthfully I think everybody is familiar with our congressional process. Yet
the USA despite all its shortcomings is the only game in town. The European
Union cannot be thought of as an alternative benefactor. Even when it promotes
the rare coherent foreign policy regarding the Middle East the European Union
is no match to Americas pecuniary determination and well-honed pragmatism. In
2002 EU spending within the Euro-Mediterranean Partnership amounted to a meager
$700 million. The EU signed association agreements with some countries in the
region and in North Africa. The Barcelona Process launched in 1995 is supposed
to culminate by 2010 in a free trade zone incorporating the European Union
Algeria Morocco Tunisia Egypt Israel Jordan Lebanon the Palestinian Authority
Syria and Turkey. Libya has an observer status and Cyprus and Malta have joined
the EU in the meantime. According to the International Trade Monitor published
by the Theodore Goddard law firm the Agadir Agreement the first
intra-Mediterranean free trade compact was concluded In March 2003 between
Egypt Jordan Morocco and Tunisia. It is a clear achievement of the EU. The
European Union signed a Cooperation Agreement with Yemen and in 1989 with the
Gulf Cooperation Council comprising Saudi Arabia Kuwait Bahrain Qatar United
Arab Emirates and Oman. A more comprehensive free trade agreement covering
goods services government procurement and intellectual property rights is in
the works. The GCC has recently established a customs union as well. Despite
the acrimony over Irans not-so-civilian nuclear program the EU may soon ink a
similar set of treaties with Iran with which the EU has a balanced trade
position - c. $7 billion of imports versus a little less in exports. The EUs
annual imports from Iraq - at c. $4 billion - are more than 50 percent higher
than they were prior to Iraqs invasion of Kuwait in 1990. It purchases more
than one quarter of Iraqs exports. The EU exports to Iraq close to $2 billion
worth of goods far less than it did in the 1980s but still a considerable value
and one fifth of the countrys imports. EU aid to Iraq since 1991 exceeds $300
million. But Europes emphasis on trade and regional integration as foreign
policy instruments in the Mediterranean is largely impracticable. Americas cash
is far more effective. Charlene Barshefsky the former United States trade
representative from 1997 to 2001 explained why in an opinion piece in the New
York Times The Middle East ... has more trade barriers than any other part of
the world. Muslim countries in the region trade less with one another than do
African countries and much less than do Asian Latin American or European
countries. This reflects both high trade barriers ... and the deep isolation
Iran Iraq and Libya have brought on themselves through violence and support for
terrorist groups ... 8 of (the regions) 11 largest economies remain outside the
WTO. Moreover in typical EU fashion the Europeans benefit from their
relationships in the region disproportionately. Bilateral EU-GCC trade for
instance amounts to a respectable $50 billion annually - but European
investment in the region declined precipitously from $3 billion in 1999 to half
that in 2000. The GCC on its part has been consistently investing $4-5 billion
annually in the EU economies. It also runs an annual trade deficit of c. $9
billion with the EU. Destitute Yemen alone imports $600 million from the EU and
exports a meager $100 million to it. The imbalance is partly attributable to
European non-tariff trade barriers such as sanitary regulations and to EU-wide
export subsidies. Nor does European development aid compensate for the EUs
egregious trade protectionism. Since 1978 the EU has ploughed only $210 million
into Yemens economy for instance. A third of this amount was in the form of
food support. The EU is providing only one fifth of the total donor assistance
to the country. In the meantime the USA is busy signing trade agreements with
all and sundry subverting what little leverage the EU could have possessed. In
the footsteps of a free trade agreement with Israel America has concluded one
with Jordan in 2000. The kingdoms exports to the United States responded by
soaring from $16 million in 1998 to c. $400 million in 2002. Washington
negotiated a similar deal with Morocco. It is usurping the EUs role on its own
turf. Who can blame French president Jacques Chirac for blowing his lid. banking
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