Putin Criticizes US on Iraq, Signals Possible Shift on Debt Write-Off

By Sergei Blagov | July 7, 2008 | 8:14 PM EDT

Moscow (CNSNews.com) - Russian President Vladimir Putin Thursday reiterated his support for the U.S.-led war on terrorism, but at the same time attacked Washington for going to war against Iraq earlier this year.

His government, meanwhile, has signaled a more flexible approach towards the question of what to do about Iraq's foreign debt.

Putin told a nationally televised question-and-answer session that the U.S.-led war on Iraq should have been authorized by the U.N. Security Council.

"There were no international terrorists in Iraq before the war," he charged, adding that military action without Security Council sanction "cannot be viewed as just, to say the least."

Asked by one caller if he viewed Iraq as "a second Vietnam" for the U.S., he said great powers and empires had often given way to "feelings of invincibility, greatness, infallibility."

"I hope this will not happen to our American partners," Putin continued. "We are not interested in the U.S. defeat in combat against international terrorism. We are partners in the war on terror."

Shortly after the broadcast, Putin met with President Bush's special envoy on Iraq, former Secretary of State James Baker, to discuss the Iraqi debt issue.

After the meeting, the Kremlin said in a statement that Russia has expressed readiness to join the deliberations of the Paris Club - a grouping of 19 creditor nations - "in the nearest future" in order to reduce Iraq's debt burden.

But the willingness was conditional. The statement said Russia's negotiating position would be determined by the economic interests of the country and its companies in Iraq.

Earlier, Russia said it had no intention of writing off the $8 billion - inflation-adjusted estimates put the figure at $11-12 billion - which it is owed by Iraq.

That stance was aired after Moscow learned it could not participate in contracts for U.S.-funded reconstruction projects in the post-war country.

Russia was upset by the U.S. decision to bar the countries which opposed the war - including Russia, France, Germany and Canada - from competing for $18.6 billion worth of contracts to rebuild Iraq.

Of the various countries excluded from the bidding, Russia may ultimately may have the most at stake.

It wants to develop Iraq's West Qurna oil fields, which contain some of the largest deposits in the world.

Baghdad in March 1997 signed a 23-year, $20 billion deal to develop the fields with a consortium led by Lukoil, one of Russia's largest oil companies.

Lukoil insists that the contract, which could see the development of 7-8 billion barrels, remains valid.

Russia was also Iraq's largest supplier in the U.N. oil-for-food program. Of the $18.3 billion in oil-for-food contracts approved by the Security Council since the program began in late 1996, some $4.2 billion went to Russia.

Eleven Russian companies were buying tens of million of barrels of oil from Iraq under the U.N. arrangement. One of them, Russia's state oil company Zarubezhneft, was tasked with coordinating purchases from Iraq.

Zarubezhneft, which has operated in the Middle East since the 1970s, has conceded that it has little chance of keeping its earlier deals, in the new post-Saddam Iraq.

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