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