Bush Taps Baker for Iraq Task

President Bush on Friday called in his family’s trusted troubleshooter, former Secretary of State James A. Baker III, to take on the thorny job of persuading other countries to forgive or restructure Iraq’s immense debt.

Baker’s appointment places one of the closest friends of Bush’s father at the front line of one of the current president’s touchiest problems: how Iraq affects relations between the U.S. and the international community.

“The future of the Iraqi people should not be mortgaged to the enormous burden of debt incurred to enrich Saddam Hussein’s regime,” Bush said in a statement announcing the appointment.

In a sign of Baker’s stature and the issue’s import, White House officials said he would have the title of presidential envoy, an office in the White House and report directly to Bush. He will not be paid, however, and his area of responsibility will be Iraq’s external financial relations. He will have no formal role in the day-to-day effort to rebuild the country.

Baker, 73, who is respected around the world as an elder statesman, served as President Reagan’s secretary of the Treasury and as the first President Bush’s secretary of State -- impeccable credentials for his new task.

But Baker’s ties with the Bush family extend beyond the Cabinet. He has also served as a political “fix-it” man for both Bushes. He resigned as secretary of State to take charge of the elder Bush’s foundering reelection campaign in 1992. In 2000, he served as lead attorney and spokesman for the younger Bush during the Florida recount.

Observers are viewing Baker’s appointment as part of the administration’s efforts to fix two problems in the aftermath of the Iraq war: mending fences with allies and increasing international participation in the rebuilding of Iraq.

“This is an administration that has not always shown a lot of respect for diplomatic niceties,” said James M. Lindsay of the Council on Foreign Relations in New York. “Baker knows how to do it. He’s very forceful and very disciplined. He can be very persuasive.”

Estimates of the size of Iraq’s debt vary widely, but repayment of even the lowest sum could cripple its fragile economy. The International Monetary Fund estimates that the nation owes $120 billion in country-to-country loans and commercial debt.

But Iraq, whose prewar gross domestic product was about $58 billion, owes even more in U.N.-mandated reparations to countries and individuals harmed during its 1990 invasion of Kuwait and the subsequent Persian Gulf War in 1991. A report this year by the Center for Strategic and International Studies, a Washington think tank, estimated the outstanding burden of reparations at about $200 billion.

So far, the two countries owed the most in reparations -- Kuwait and Saudi Arabia -- have given little indication that they are likely to forgive those debts. The decision actually lies with the United Nations, which authorized the reparations, but states also hold firm to the principle that successive governments honor the debts of their predecessors, even if those predecessors were odious.

Some countries that hold large amounts of Iraqi debt, such as Russia, opposed this year’s war to oust Hussein and have been hesitant to set aside their national interests to assist what they see as a flawed American project. Russia, with economic woes of its own, is owed $3.5 billion in country-to-country debt and $52 billion in pending contract obligations.

Bathsheba Crocker, author of the CSIS report, says that Iraq’s total debt burden, including reparations, exceeds $300 billion, which dwarfs the debts left by other deposed regimes.

“This is way larger than anything we’ve seen,” Crocker said. “It’s a crippling burden. It’s an untenable amount to even think about them paying back.”

Administration officials have been frustrated by the hesitance of some countries that are usually allies to offer Iraq financial assistance in the form of grants or debt forgiveness. An October donors conference in Madrid collected pledges of $13 billion for Iraq, most of it in loans. The U.S. has offered $20 billion.

Secretary of State Colin L. Powell and Treasury Secretary John W. Snow have been trying to persuade countries to offer more. But White House officials said Baker was appointed because the job needs full-time attention.

“It recognizes that it’s a very important and focused issue requiring very high-level attention,” said Sean McCormack, a spokesman for the National Security Council.

As secretary of State, Baker is remembered for his 1990 “tin cup” tour that helped line up more than 100 countries in a financial and military coalition that ousted Hussein’s forces from Kuwait. Baker subsequently earned kudos in the Mideast for leveraging the U.S. victory to promote Arab-Israeli peacemaking efforts. Bush and his advisors undoubtedly hope that Baker will be able to draw on those ties in his new position.

Although Baker was one of George H. W. Bush’s closest aides -- the two were tennis partners in Houston long before either entered national politics -- his relationship with the younger Bush has reportedly been more strained. The Bush family reportedly blamed Baker’s reluctance to give up his job as secretary of State for the elder Bush’s mismanaged 1992 reelection campaign. Baker has not been part of the current president’s inner circle of advisors, who tend to be more conservative and ideological than he is.

Fred Greenstein, a presidential scholar at Princeton University, said Baker’s appointment at this point in the Bush administration appeared to be part of a pattern of post-Iraq fence-mending.

Baker “has done this kind of thing before. He’s very organized, focused and very smart. He’s the perfect man for the job.”