Iraqi FM: Economic Crisis Could Affect U.S. Troops

Iraq's foreign minister says "there is a new world now" because of the global financial crisis and he hopes it won't lead to an immediate withdrawal of the 146,000 American troops in his country.

In an interview with The Associated Press, Iraqi Foreign Minister Hoshyar Zebari said a precipitous withdrawal could have consequences for the country and the region that everyone would regret afterward.

Zebari is due to meet Saturday with Secretary of State Condoleezza Rice in New York, where he was attending the U.N. General Assembly's annual ministerial meeting.

He said he didn't have any indications that the U.S. administration was thinking about pushing for a speedier exit from Iraq, where it has spent more than $550 billion, because of the financial meltdown.

"But this is the logic of the dance," Zebari told the AP on Friday. "Nobody anticipated this major crisis, and still there are ongoing efforts to overcome it, to contain its impact, bail out some of these companies with a huge infusion of cash. But the crisis is evident everywhere."

"This has nothing to do with liking this administration or that administration, or this president or that president, something has landed uninvited," he said. "I think there is a new world now after this crisis, and one has to be realistic about changes in attitudes and policies due to this huge crisis that has affected the world economy."

President Bush's administration is seeking a $700 billion bailout — the largest in U.S. history — which has raised widespread concern in Congress and fears that the United States is on the verge of a major recession.

Asked whether he was concerned that the current financial crisis might lead the U.S. government to push for a speedier exit than Iraq might want, as a cost-saving measure, Zebari said: "I don't know."

"We hope it would not have a dramatic impact to cause ... drastic and calculated decisions that everybody would regret afterwards," he said.

By drastic and calculated, was he referring to an immediate withdrawal?

"Exactly, immediate precipitous withdrawal irrespective of any consequences," Zebari said. "I think there is high stakes for everybody involved in the region, that every administration will take account of."

Iraq's top diplomat said the government still hopes to sign a long-term security pact with the United States before the U.S. presidential election on Nov. 4.

"We are talking, the Iraqi and American side, and I think the draft agreement is almost done. What needs to be done is some political decisions by the leadership," Zebari said. "The window time is closing because we were hoping to get this agreement by the end of July and now we are in September. We haven't given up hope at all, but really still there is no final agreement."

The proposed agreement, which has been under negotiation for most of this year, would replace the U.N. mandate. Any agreement must be ratified by the Iraqi parliament.

The main sticking points include Iraqi objections to blanket immunity for U.S. troops and private contractors and demands for oversight over American forces during raids and detentions.

Zebari said that if it's not possible to reach agreement by the election the alternative is to go back to the U.N. Security Council to extend the mandate of the U.S.-led multinational force in Iraq, which expires on Dec. 31.

Asked whether the U.S. election was playing into the long-term strategic framework agreement with the United States, Zebari chuckled and said "I think it's present. Even if it's not in person, its soul is there."

Zebari said he told the two presidential candidates — Democratic Sen. Barack Obama and Republican Sen. John McCain — that "it would have been in our interest to conclude this agreement before the end term of this administration and that was the whole plan."

He said he explained to both candidates that "as long as this agreement would not be binding for any future administration, that administration will benefit from having something at hand when it takes office."

Zebari described the security situation in Iraq as "fragile."

"We've turned the corner against terrorism, against preventing the country from falling into civil war or sectarian war or division. I think we've passed that," he said.

But he said the security gains must be augmented by political reconciliation, economic benefits for the people, provision of services and better governance.

"And the pace is slow, as you've seen in the past, so that's why people think they are not solid enough and they could be reversed."