Iraq's Governing Council appears to have a clear vision of their country's national interests--and this may bring them into greater conflict with their supporters in Washington.

Writing in The National Interest's winter 2003/04 energy supplement, Joe Barnes, Amy Jaffe and Edward L. Morse note: "The idea that a grateful Iraqi citizenry will relinquish its rights to high oil prices out of gratitude to the United States for their liberation seems, to put it gently, farfetched."  ("The New Geopolitics of Oil," at http://www.inthenationalinterest.com/Articles/Vol2Issue49/Vol2Issue49Ene...)

Iraqis may be grateful to the United States for liberation from Saddam Hussein's tyranny, but this does not mean that they feel their national interests are fully in alignment with those of the United States.  And, based on the results of their meetings in Moscow, it appears that the Governing Council is prepared to take a more independent line in charting Iraq's postwar future.

The visit of Abdul Aziz Al-Hakim, the head of the Governing Council, and Jalal Talabani, head of the Patriotic Union of Kurdistan, to Moscow appears to have produced several results, namely:

1)                 A commitment by Russia to consider reducing Iraq's debt and outstanding interest payments by two-thirds in return for consideration of Russian commercial interests, including contracts signed with the Hussein government;

2)                 A pledge that Russia would invest up to $4 billion in Iraq, principally in the energy and communications sector

What is important about this?  First and foremost, both Baghdad and Moscow bypassed the United States.  Russian President Vladimir Putin chose to make the announcement directly to Iraq's representatives, rather than via former Secretary of State James Baker.  The message is clear- the United States can take no credit for this, and it is in Iraq's interests to deal directly with Russia rather than via Washington intermediaries.

The Governing Council, for its part, wants to demonstrate its independence and also, by involving Russia directly, provide for a "mixed" set of investors.  Fearing, perhaps, that the Pentagon directives on reconstruction contracts might deprive Iraq of investment capital and give excluded countries no stake in successful Iraqi reconstruction, reassuring Russia directly that its interests will be considered enabled Baghdad to bring Russia into the process.  Thus, Russian Energy Minister Igor Yusufov announced: "The Iraqi side proposed to resume talks at the level of experts on Russian contracts which have already been signed.  … This proposal was accepted by Russian President Vladimir Putin and he ordered the government to work in this direction."

So now the United States is placed in an awkward position.  It can stand back and let the Governing Council cut deals with Russia - and one assumes that agreements on are deck for France and Germany.  It can interfere and seriously erode the legitimacy of the Governing Council as a transition institution toward full Iraqi sovereignty. 

One, in fact, even hopes that perhaps Washington has tacitly encouraged the Governing Council to take these steps, as ways to vest Russia and other countries as shareholders in Iraqi reconstruction and to give the Governing Council a boost in its internal and external legitimacy, especially in the wake of Saddam Hussein's capture.

At any rate, the Moscow talks offer a "win-win" solution for all involved. If carried out, large-scale forgiveness of Iraqi debt and the promise of major new investments in Iraq help to reduce the burdens shouldered by American taxpayers and bolster the stability of the postwar regime in Iraq.  Let's not look this gift horse in the mouth.

Nikolas K. Gvosdev is the editor of The National Interest