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[PEN-L:32374] Re: protection rents, part 1



It's beginning to look like, financially, Iraq II will be the opposite
of Iraq I.  Ten years ago, the US fought the war as a mercenary and was
repaid by other capitalist powers; we ended up with an approximately
$100B transfer on the current account.  This time around, the US will
have to be the one to shell out for acquiescence to an unpopular war.

Peter

Ian Murray wrote:

U.S. Discusses Aid for Turkey to Defray Costs of an Iraq War


By Bradley Graham Washington Post Staff Writer Tuesday, November 19, 2002; Page A20


The United States has begun discussions about compensating Turkey for economic losses and other costs likely to be incurred in a U.S.-led war against Iraq, according to American and Turkish officials.

Both sides described the discussions as still at an early stage and marked
by a wide gap in what the Turks would like to receive and what the United
States is willing to pay. But the mere existence of the talks, which
participants said were initiated by the United States within the past two
months, reflects the importance that U.S. officials place on Turkey in any
war with Iraq.

A longtime NATO ally bordering northern Iraq, Turkey is in position to serve
as a crucial base for U.S. military operations. Its bases and airfields
would likely be prime staging areas for American forces, and Turkish troops
could play a significant role policing the flow of refugees from Iraq or
guarding prisoners of war. At the same time, U.S. officials have expressed
concern that Turkish forces may attempt to take advantage of a war and
occupy northern Iraq to block the creation of an autonomous Kurdish region,
which could serve as a base of operations for Turkey's own separatist Kurds.

Preparing for possible military conflict with Iraq, the Bush administration
has launched a number of diplomatic and military moves to secure basing,
overflight rights and other crucial assistance from countries in the Persian
Gulf region and elsewhere. But U.S. officials described the offer of
economic assistance to Turkey as unusual, saying similar discussions have
been initiated with only one other ally in the region -- Jordan.

"We've told them that if there is military action against Iraq, we would
recognize that Turkey would have some losses and we would have to move in
some fashion to help them," a senior administration official said.

As another sign of the high-level attention that Turkey is receiving within
the administration, President Bush got involved yesterday in furthering
Turkey's bid to join the European Union. He phoned the EU president, Danish
Prime Minister Anders Fogh Rasmussen, and stressed the importance of
"advancing Turkey's evolution toward" membership when EU leaders convene in
Denmark next month, according to a White House spokesman. Bush also plans to
meet with Turkish President Ahmet Sezer on Wednesday while the two leaders
are in Prague for a NATO summit.

Turkey already allows U.S. and British warplanes to use an air base at
Incirlik to patrol a "no-fly" zone over northern Iraq established after the
1991 Persian Gulf War. U.S. authorities express little doubt that Turkey
would support the United States in another war with Iraq.

But Turkish officials fear the potential economic and political
consequences. Turkey lost billions of dollars in tourist revenue and trade
with Iraq as a result of the 1991 war and confronted a surge in Kurdish
refugees. With their economy now in recession, many Turks see another war as
undercutting the prospects of recovery and further straining their country's
massive debt burden, which is being helped by $16 billion from the
International Monetary Fund. They also express concern that a war could
reignite unrest in Turkey's mainly Kurdish southeast, where the military has
spent much of the last two decades fighting Kurdish separatists.

It was public outrage over the state of the economy that helped fuel a
victory in Turkey's national election earlier this month by the Justice and
Development Party, whose leaders hold strong Islamic beliefs. So far,
however, U.S. officials say they have been encouraged by some of the new
leading party's initial moves. "We're favorably impressed with the quality
of people being mentioned for the top economic posts and other ministerial
jobs," another senior administration official said.

U.S. and Turkish officials familiar with the discussions over a war
compensation package said several options have been mentioned, including
outright grants, preferential trade terms for Turkish exports to the United
States, U.S. military equipment transfers and contracts for Turkish firms to
help in the reconstruction of a post-war Iraq.

"We've heard a wish list from the Turkish side," a senior official said.
"There's a whole host of ways it could be structured."

Turkish authorities said they also hope for a significant boost in U.S. aid
even if no war comes. They say just the talk of war has shaken Turkey's
economy, discouraging tourism and trade, raising oil prices and limiting
access to international financial markets.

Turkey already has begun to see an increase in some U.S. assistance.
Congress recently appropriated $200 million in grants to support Turkish
economic reforms and approved another $28 million to help cover Turkey's
expenses as head of the international peacekeeping force in Afghanistan. The
House also has passed trade legislation that would give Turkish goods
duty-free access to the U.S. market. But the measure has yet to be taken up
in the Senate.

While congressional sources report bipartisan sentiment in favor of
expanding economic benefits to Turkey, they said an administration move to
provide new weapons could run into resistance. U.S. military sales to Turkey
have been stymied since the late 1990s by human rights concerns over
treatment of Turkish Kurds.






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