Gayle Smith
Gayle Smith

The Bush administration has poured another bucket of cold water on efforts to internationalize the stabilization of Iraq. With its public announcement yesterday that reconstruction contracts will be limited to coalition partners – and withheld from “Old Europe” – the Pentagon has increased the cost to Americans, weakened the traditional alliances America needs to defeat terrorism, and undermined Iraq’s long-term future.

Some will argue that it is both logical and fair that the $18 billion provided by the U.S. to rebuild Iraq should benefit only those nations who supported the U.S. intervention. But this argument holds only if the frame of reference is the past and the goal is payback. Looking forward and assuming a grander mission, the Pentagon’s latest directive will do more harm to America than to any of the countries that have been so tactlessly excluded.

The directive signed by Deputy Secretary Paul Wolfowitz states that “It is necessary for the protection of the essential security interests of the United States to limit competition for the prime contracts of these procurements to companies from the United States, Iraq, Coalition partners and force contributing nations.” This excludes countries like Canada, a leading contributor to peacekeeping operations, prominent champion of human rights, and one of the world’s most generous aid donors. Does the Bush administration truly believe that the “essential security interests of the United States” would be harmed if a Canadian company rebuilt the road from Baghdad to Tikrit?

Probably not. But Canada – like Germany and France, and Russia and China – did not line up with the United States in support of invading Iraq last March. In the eyes of the Bush Administration, that single act erased decades of cooperation and moved former allies from the friends’ side of the ledger to what appears to be a bizarre new variation on the enemies list.

A childish game of tit for tat is no substitute for the skillful diplomacy required to “encourage the expansion of international cooperation in Iraq and in future efforts” that Mr. Wolfowitz desires. By alienating America’s traditional allies – the same countries that can contribute troops and reconstruction dollars – the administration is increasing the likelihood that the additional troops and new reconstruction monies needed over time will have to come from the United States.

The implications for Iraq are no less serious. Not all of the Iraqi infrastructure slated for reconstruction was originally built by members of the U.S.-led coalition. By excluding countries that might have built some of the factories, electrical grids, hospitals and water pumping stations that are now being rebuilt with U.S. taxpayer money, the administration is in some cases necessitating the rebuilding, rather than repair, of Iraqi facilities. Meanwhile, by ensuring that the Iraqi market is secured by Coalition members, the United States is narrowing the scope of Iraq’s long-term trade arrangements rather than laying the ground for a sovereign Iraq to engage with multiple trading partners.

The longer term implications are staggering. The administration has legitimized political interference in government procurement operations, setting the stage for future contracts to be subjected to the whims of individual government agencies. It has upended trade relations by using its status as occupying authority to monopolize a single market. And it has certainly lent credence to the view held by some that one of its aims is to secure the spoils of victory.

The Bush administration’s spin is that excluding other nations from bidding on reconstruction contracts is in the interests of U.S. taxpayers. If the administration really wants to serve the interests of U.S. taxpayers, it needs to focus less on revenge and more on the tasks at hand – expanding troop contributions from other nations, leveraging an increase in donor contributions to Iraq’s reconstruction, and ensuring that the rebuilding of Iraq paves the way for the emergence of a vibrant, integrated economy.

Furthering those goals could be achieved with as little as it took Paul Wolfowitz to sign off on a document that has set back U.S. policy and left much of the world speechless. The United States should award reconstruction contracts on merit. Companies and firms that can provide the best value for money, comparative advantage, and meaningful investments in Iraq’s long-term economic viability should lead the pack.

There is no downside, unless the Bush administration considers cooperating with the likes of Canada and France and Germany to be an admission of failure. And there is a considerable upside. As the presence of foreign companies increases, so does the likelihood of governments to provide troops to secure their interests. As involvement in the reconstruction is internationalized, aid contributions will increase. And as companies compete, openly and fairly, Iraq stands a better chance of reaping benefits awarded on the basis of effectiveness rather than spite.

Gayle Smith is a senior fellow at the Center for American Progress.

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