April 30, 2003

The Wall Street Journal, the world's most influential financial paper, today supported the Jubilee Iraq contention that much of Saddam's debt is "odious", a technical term meaning that it is illegitimate and the Iraqi people have no obligation to repay it. The WSJ editoral also says that cancellation of these debts would not have a serious effect on Iraq's future ability to borrow - the principal argument used by opponents of debt cancelation. "Ultimately, the issue of what to do about Iraq's debts is for... the new Iraqi government to decide. But we wouldn't blame its leaders if they decided that some of those financial obligations are indeed "odious." And given that this is such an extreme case, international lenders probably wouldn't hold it against them for long."

April 29, 2003

Russia may reschedule debt, but not cancel it. During Tony Blair's visit to Moscow, Finance Minister Alexei Kudrin said: ''There will be big debate on the issue, and I do not rule out that a decision will be made to reschedule part of Iraq's debt and write off another part... Iraq must be given a grace period in repaying its debt because postwar reconstruction there is an urgent need,'' however, he added that Russia was against a ''complete write-off.''

Seperately, speaking last week on Russia's ORT television channel, Alexander Shokhin, the head of the finance and credit committee of the lower house of the Russian parliament, suggested that Iraq's debt to Russia could be reduced by 80%.

April 28, 2003

One of the first serious articles arguing against cancelling Iraq's debts by Edwin Truman in the Financial Times today.

He actually partially agrees with Jubilee Iraq: "It would be economically, politically and morally misguided to expect Iraq to pay all its accumulated external obligations." Regarding reparations from the invasion of Kuwait, he warns that "that burdensome reparations payments are a recipe for resentment, instability and international friction." He goes further than suggesting merely a cancellation of the governmental and corporate reparation claims and suggests that "it may well be necessary to write down further the Gulf war claims by individuals and families that have been adjudicated already but not yet paid: these amount to about $25bn."

He disagrees with us on the case of loans. He doesn't offer any argument why they should be repayed, but merely points out that some could be serviced. "Based on estimated export earnings of $20bn a year, a maximum debt-service ratio of 25 per cent and an estimated interest rate of 6 per cent, the new Iraq might reasonably be expected to service the interest on debt of $80bn." He is suggesting leaving Iraq with a huge part of Saddam's debt and diverting a quarter of it's earnings from rebuilding the country to servicing this odious debt.

He continues "Should Iraq become the first country to benefit from the doctrine of "odious debt"? No. First, some of Iraq's creditors are themselves being forced to pay odious debt. Second, the Iraq case is complicated because it involves Gulf war compensation claims. Third, any changes in the treatment of Iraq's debt will be felt most deeply in the Middle East; western appeals to the doctrine of odious debt may again amount to spending others' money. Finally, many other countries - Indonesia, Nigeria and South Africa, for example - would immediately apply to use the Iraq precedent to wipe out their own odious debt."

Jubilee Iraq response: Truman's first three points are not arguments but just statements. The 1st point is merely a practical political hurdle to agreement, and in passing admits that some debts are indeed odious. Regarding the 2nd point, we agree that compensation claims have not been previously encountered in the century-old Odious Debt debate, but there are many other precedents for cancellation of reparations, something which Truman supports himself. The 3rd point is mistaken; although some Westerns are appealing for cancellation of Saddam's odious debts, a look at the Jubilee Iraq petition will reveal that a majority of people making the appeal are Middle Easterners not Westerners. The 4th point is an argument - the "Domino Effect". Ppast cancellations of odious debt, however, have not resulted in immediate application by other countries. The three countries Truman mentions all have strong cases for cancellation of their odious debts. It woud be a positive result - indeed another reason in favour of Jubilee Iraq - if cancelling Iraq's debts moved forward the debate on cancelling the debts of these other countries.

April 24, 2003

Jubilee Iraq concludes from the statements below that the Paris Club intends to extract payment of Saddam's debts from the Iraqi people. Jean-Pierre Jouyet licked his lips at the mention of Iraq's $20bn oil revenues. To rebuild a country devestated by war, oppression and sanctions, $20bn revenue is small change. The $20bn must also be put in context: France and Britain both have GDPs greater than $1000bn, while the US has a GDP of over $10,000bn.

Paris Club Chairman Jean-Pierre Jouyet said "The debt due to the Club of Paris was estimated in 1990 at 26bn euros. You have to add to this the war damage -- which is not dealt with by the Club of Paris but by the United Nations -- and the (unpaid) interest. The oil resources, according to the estimates we have -- and I'm being prudent here -- should produce about $20bn in revenue a year."

He said there would be no link between any debt relief for Iraq and the distribution of reconstruction contracts. "We agreed to work according to the usual methods of the Club -- on a consensus basis with equitable treatment for all creditors, after a study by the IMF to see if the quantity of debt that should be annulled corresponds to what is needed for Iraq's development." But a governing authority and sufficient security would have to be established in Iraq before creditors could go there on fact-finding missions, "We don't know today who to talk with."

The Paris Club has issued a brief press release "A further UN security council resolution is anticipated. They note that the IMF and the World Bank stand ready to play their normal role. Paris Club creditors agreed that they stood ready to engage on Iraq's debt. They agreed, as a first step, to carry out a comprehensive assessment of Iraq's indebtedness towards Paris Club countries. On this basis, they will review this issue in the coming months and follow closely developments on Iraq's situation."

April 23, 2003

Check out the new country pages - everything we're got on each creditor. Let us know if you know more!

Bulgaria | Canada | Czech Republic | Egypt | France | Germany | Italy | Jordan | Japan | Kuwait | Poland | IFIs | India | Russia | Saudi Arabia | Serbia | Switerland | UAE | UK | US

April 22, 2003

Jubilee Iraq petition reaches 2000 signatures from 59 countries.

April 21, 2003

Iraq Debt Resolution in US Congress. House Res. 198, proposed by Tom Cole (R, Oklahoma). submitted 11th April (only just posted due to Easter recess) and referred to the Committee on International Relations. The Resolution, following Paul Wolfowitz's comments, is aimed at France, Russia and Germany. Jubilee Iraq welcomes debate in the US on this issue and urges Congress to resolve to first cancel America's own debt and reparation claims on Iraq and then to politely use its diplomatic influence to encourage all its allies, not only the three mentioned in this resolution, to write off their's as well.

First data I've seen on Japanese debt - at Y673bn, about $5.6bn. Y473 is public sector. Apparently "Japan is willing to go along with loan postponement, but has said it would not accept an outright reduction or elimination of existing loans." Although I heard earlier reports from the IMF summit which implied that the finance minister, Masajuro Shiokawa, was reasonably positive on debt forgiveness. Perhaps their position has hardened in response to the position of other Paris Club nations.

Excellent article advocating debt cancellation by Charlotte Deney in the Guardian today.

First coverage of Jubilee Iraq in mainstream media. The UK Daily Telegraph reports today on shortfalls in humanitarian relief, saying: "According to Jubilee Iraq, a new campaigning organisation, part of the shortfall has been because £535 million from the Oil for Food Programme, which should have been used to help Iraqis, has instead been paid to Kuwaitis in compensation for losses sufffered in the last Gulf War." It has taken two weeks for this scandal to get in the media - $860m paid from the so-called-Oil-for-Food fund in reparations to Kuwait, US and UK on April 8th, which was supposed to be the first day of a new humanitarian mandate from the UN to utilise the fund to provide essential relief to Iraqis.

April 20, 2003

Please write to your finance ministers. I've just added lots of information to the lobby page to help you do this. Do get in touch if you can help with information (addresses of government officials) or would like to write a draft letter in your language which people could use.

India is apparently owed nearly $1bn by Iraq, according to The Hindu newspaper, which advocates writing it off.

More news on that US Resolution. Apparently it was dropped right before the recess - hence it's not on record yet. I think by Rep. Cole's (R-Oklahoma) who I will call on Monday to find out more. I'll let you know as soon as I do!

You can now get a daily digest of this news, just email jubileeiraqnews-subscribe@yahoogroups.co.uk

Today on Easter Sunday, when Christians celebrate the resurrection of Jesus, please pray for the resurrection of Iraq. Pray that after all the pain of Saddam's oppression, the UN sanctions and 3 devastaing wars, the Iraqi people may enter a period of peace and prosperity. Pray that all the debts will be written off, all wounds healed, and that former enemies may have the grace to forgive one another and live in fellowship together. To any creditor who professes to be a Christian and yet claims debt from Iraq, I remind them of Jesus' commands to love everyone and act with justice, and of the prayer Jesus taught "Father...forgive us our debts, as we also forgive our debtors" (Matthew 6:12). And St.Paul taught that "It is for freedom that Christ has set us free" (Galatians 5.1). So I urge Bush and Blair, who profess to be Christians and claim that through their war they have set Iraq free, to ensure that the Iraqi people enjoy real freedom rather be enslaved anew to Saddam's debts.

Newsweek compares Iraq with Argentina" Now Iraq emerges from the war at the top of another list—that of the biggest emerging-market meltdowns ever. It has a debt-to-GDP ratio of 15 to 1, or several times that of Argentina or Brazil at the height of their troubles last year." The article ends with a chilling prediction: "This is no Argentina. Indeed, if Baghdad is in as little trouble as Buenos Aires in 10 or 15 years, it will be doing miraculously well."

The Boston Globe reports on Eastern European countries who supported the US in the war and now want to benefit from repayment of debt (their former communist governments were active in Iraq during the 1980s) and/or reconstruction contracts. Poland's foreign minister (Wlodzimierz Cimoszewic), said last week that he would like to recover some of the $700m debt from Iraq, ''not necessarily in cash but, if possible, by more permanent participation in the Iraqi economy, to the benefit of both countries.'' Likewise, Witold Jurasz, who served as Poland's ambassador to Iraq from 1986 to 1990, suggested that the debt could be recovered in kind, from oil pumped from the Rumaila fields. The Czech Republic, which claims $60-100m in debts, may have got on America's bad side when the new president, Vaclav Klaus aske for his country's name to be removed from the "Coalition of the Willing". Former president Vaclav Havel, who retired in feburary, had supported war.

Iraq debt resolution in US Congress. I've just spotted reference to this (forthcoming?) resolution, with a list of co-sponsors. Do any Americans have any info on what this resolution says, what stage it is at etc.? All I know is the current list of co-sponsors (as of 11th April), including three international relations committee members: Rep Hayworth, J. D. [AZ-5], Rep Herger, Wally [CA-2], Rep Barrett, J. Gresham [SC-3], Rep Musgrave, Marilyn N. [CO-4], Rep Tiahrt, Todd [KS-4], Rep Simmons, Rob [CT-2], Rep Chabot, Steve [OH-1], Rep Turner, Michael R. [OH-3], Rep Weller, Jerry [IL-11], Rep Gibbons, Jim [NV-2], Rep Smith, Christopher H. [NJ-4] ,Rep Beauprez, Bob [CO-7] ,Rep Porter, Jon C. [NV-3] ,Rep Murphy, Tim [PA-18], Rep Franks, Trent [AZ-2], Rep Gerlach, Jim [PA-6]

April 19, 2003

Japanese page now online thanks to Endo Yasuhala. Any Japanese readers please write to your Finance Minister, Masajuro Shiokawa, asking for a committment to debt cancellation.

Serbia's Minister of Economy and Privatisation, Aleksandar Vlahovic, said that Serbia will demand from Iraq debt which was owed to the former Socialist Federal Republic of Yugoslavia. "The Iraqi debt to former SFRY amounts to $1.8-2bn, and Serbia and Montenegro should get 38 percent of that sum."

Paris Club secretary Delphine D'Amarzit has said the creditor nations will begin taking inventory of the debt at its regular meeting April 23. But for any debts to be wiped away, D'Amarzit insisted, "we'll have to have an Iraqi administration in front of us." Relief could include full write-offs, partial write-offs or debt rescheduling. A debt-for-investment swap would grant creditor countries or their companies special investment rights in the new Iraq.

April 18, 2003

You may have spotted a bit of reorganisation on the website today. The petition is still running but we're giving it less emphasis. It is now time to move the campaign onto the next stage - seriously lobbying governments. An experienced campaigner told me that one letter to a minister is worth 1000 written signatures, let alone online signatures of contestable authenicity. So if you feel strongly about cancelling Iraq's debt then please write to your country's finance minister. If you compose a letter tailored to your own country then please do email it to us to inspire others. Also we haven't yet got all the correct contact addresses for finance ministers, so please do let us know the correct one for your country.

Newsnight, the BBC's indepth news program, had a 10min slot on Iraq's debt tonight. (You can watch it online in .ram format). Unfortunately none of the people interviewed made clear either the case for cancelation of odious debts or the arguments against debt cancellation (credit ratings, moral hazard...). Hopefully the program will spark some further debate in the British media, and hopefully next time they'll invite a Jubilee Iraq spokesperson. We'd relish a good public debate with a serious opponent, say Martin Wolfe of the FT, not a strawman like Edwin Truman (who was on NN).

April 17, 2003

Best article I've seen on last weeks political wranglings about Iraq's debt, by Sam Vaknin of UPI. Part two of the article published tomorrow.

Excellent article on reconstruction. Some striking figures whose sources I'm chasing up:

- GDP/Capital = $9000 (1979) = $700 (today - figure from John Sfakianakis @ Harvard's Center for Middle Eastern Studies)
- 1 Dinar = $3.20 (1982) = $0.0003 (today).
- Saddam's rule since 1979 has cost Iraq at least $500bn (Mr. Abdulatif Yousef Al-Hamad, director General of the Arab Fund for Economic Development in Kuwait)
- Saddam spent no less than 50% of all Iraqi oil revenues on himself and his henchmen. (IMF, quoted first here)

Matein Khalid, a Dubai investment banker says, "Iraq could well prove the catalyst of a new economic dawn in the Arab world." Jubilee iraq notes that it is in the interests of all the countries in the region to see this economic dawn. However, if they insist on debt repayments & reparations, the dawn may not break.

Jordanian investment banker Henry Azzam (the CEO of Jordinvest) says that Kuwait will benefit most from the change of regime in Iraq; cancelling Iraqi debt and repertaions "will be more than offset by the major shot in the arm that greater security and a revived Iraqi market would give the country's private sector." Jubilee Iraq would add that Kuwait would also benefit from the warm relationship with the new Iraq which cancelling Saddam's debt would help develop.

Excellent article from Campaign Against Sanctions on Iraq (CASI) which examines Iraq's need versus resources for aid & reconstruction, outlining a context in which debt cancellation is essential.

Unless the UN Security Council lifts the sanctions (that prohibit trade in Iraqi oil apart from under the oil-for-food program) the it will be impossible (legally) for Iraqi oil to be traded to earn revenue for reconstruction. Currently any shipments of oil could be seized creditors to repay some of the $400bn in debt and reparations. This makes Jubilee Iraq's call for debt cancellation particularly urgent. The Iraqi people should not be made to suffer further because of wrangling between other nations.

April 16, 2003

Excellent article on Russia's oil contracts. The projects could not begin while the sanctions were in place. Reuters counted four deals potentially representing over 1.2m barrels per day in production. However the legal status of the contracts is unclear since Saddam's government had rescinded one of the main contracts, for developing the West Qurna by LUKoil, on more than one occasion for political reasons.

The Economist supports cancellation of reparations:"The case for continuing to punish the Iraqi people for the sins of their unlamented dictator is a poor one, as Keynes so eloquently demonstrated in Germany's case at the end of the first world war." It notes that "if Iraqi oil is to generate a sufficient flow of finance to pay for reconstruction, [the debt] burden must be reduced." Also "precedents exist for debt forgiveness on political grounds, as some of Poland's was forgiven in the early 1990s." So far the Economist aligns with Jubilee Iraq's view, however it drops in the statement "The repayment of some Iraqi debt, despite regime change, is crucial to rebuilding Iraq's credibility in international credit markets." However it gives no argument as to why repaying Saddam's debt will achieve this. Jubilee Iraq's contacts in the markets do not believe the treatement of Saddam's debt will have any effect on Iraqs future credit rating since the demaraction between the Ba'ath party and the new government will be so clear.

The Dutch government has indicated it does not intend to waive Iraq's debt to the Netherlands. Nor will it help reconstruct Iraq. Foreign Minister Jaap de Hoop Scheffer told Parliament in a letter that Iraq could borrow money from international agencies such as the World Bank. Are any Dutch speakers reading this who could find out more details please?

The UK Daily Telegraph writes that "Iraq's debt burden has been exaggerated... many of Iraq's debts, especially to other Middle Eastern countries, are denominated in the Iraqi dinar, which has plunged in value." Does anyone have any information about this and what it would mean for debt estimates? None of the principal sources - CSIS, US Dept. of Energy, World Bank - have made this claim to my knowledge.

The British government is prepared to forgive some, but not all, of the GBP1 billion debts owed by Iraq, officials said yesterday. The debt is owed to the Export Credit Guarantee Department (ECDG). The government hopes there will be an internationally agreed restructuring and the payments will be rescheduled. "It is taxpayers' money at the end of the day," said the spokesman. "It would not send a good signal just to write it off." Jubilee Iraq notes that the British government was perfectly happy to spend tax payers money to overthrow Saddam Hussein. What king of signal does it send to demand payment of any of his debts from the Iraqi people whom we claim to have liberated?

April 15, 2003

A quiet day on the political front. Jubilee Iraq has been busy however. You'll have noticed the growing number of translations - thanks to everyone who's writen these. Russian and Portugese coming soon. We're keen to find contact people for italy, france and the arab countries if anyone is interested? Our petition crossed the 1000th mark today (with 44 countries represented) and is past 1200 as I write. Most of the people signing are outside the UK and many in the Middle East, which is good news. We're also beginning to get official supporters, who we welcome warmly. Two prominent Iraqis have come on board today, Sinan al Shabibi and Hussain Sinjari, we hope many more - indeed all iraqi political groups - will link up with us soon. Jubilee Iraq's aim will be to support the new Iraqi government in repudiating Saddam's debts. In the West our latest supporter is Noam Chomsky.

China says it is owed billions of dollars in debt from Iraq and will pursue the debt through international channels. A foreign ministry spokesman said China would deal with the debt issue through "friendly consultation and in accordance with international laws and practices".

Jay Garder (US Director for "The Office of Reconstruction and Humanitarian Assistance") has urged governments to forgive Iraq's debt.

Switerland: Kurt Schaerer (head of export finance at SECO - the State Secretariat for Economic Affairs) told Swissinfo that it is reviewing SFr300m ($215m) owed by Iraq, accrued mainly through unpaid exports of machinery and building materials. Schaerer stressed the need to a agree a common position with IMF and Paris Club. “The real discussion must take place based on concrete figures and facts, which can only be established once the situation is more stable and we [have a] perspective on Iraq."

Lots of articles these days, most repetative. A few good ones are:
Moscow Times - Debate Rages on Reconstructing Iraq - Good summary of the debate so far.
Pravda - The Theatre of Debt Aburdity - Argues against debt cancelation from a Russian perspective.
Wall Street Journal - Division on Rebuilding Iraq - 12/4/3 - Analyses US motives for advocting debt forgiveness.

I've heard rumours to two reports on Iraq's debt. One by Standard Bank and the other, called Iraq: Just the debt by Exotix. If anyone reading this works in finance and could send me a copy of these that would be very useful! A quote from the Exotix report, mentioned in MEES, is Exotix report is that the company expects to see “a surprising number of claims in which the Statute of Limitations has lapsed.” This may give the regime new government an “innovative means to eradicate a good portion of its debt by only acknowledging strong legal claims and the claims of creditors who may provide ongoing commercial benefits to the economy. This might obviate the need for aggressive debt forgiveness across all London Club debt.” Does anyone know much about these "Statutes of Limitation"? Would it apply to the bilateral debt or just the commercial debt? Please let me know if you can help!

April 14, 2003

An unnamed Russian trade offical told Interfax news agency that Russia will discuss restructuring debt if Russian contracts in Iraq are respected. "These conditions imply the participation of Russian companies in the economic reconstruction of Iraq, the return of Russian companies to large projects in Iraq, primarily in oil and gas fields, and promises to discuss prospects for trade and economic cooperation." Moscow believes the debt should be discussed by all the creditors, "but bilateral consultations with the new administration of Iraq are not excluded at the initial phase."

Germany's World War I reparations totaled about twice its GDP. The debts were never paid in full. They proved to be an impossible burden, fueled German resentment, and possibly contributing to the subsequent rise of Hitler. Iraq's debts amount to 15 times its annual GDP of perhaps $25 billion.CSM

April 13, 2003

Does anyone have any suggestions for respected Arabs who could champions debt forgiveness to the Arab creditors (Kuwait, Saudi...)?

SUMMARY OF STATEMENTS YESTARDAY IN WASHINGTON - Debt forgiveness looking less likely now.

John Snow (US Treasury Secretary) said that G7 officials "began substantive discussions about how our nations and the international institutions can work together to help the Iraqi people recover -- not just from 25 days of conflict, but from 25 years of economic misrule." The ministers "had useful discussions about how to proceed with the Iraqi debt -- recognizing that the Iraqi people cannot bear the burden of current debt levels -- and we recognize the need of the Paris Club to begin to address this issue."

Hans Eichel (German Finance Minister) said his country was not prepared to start writing off its Iraqi debt. "We do not only expect to get our money, we will get our money back. If a country has the possibility of repaying its debt, it must do so.”

Francis Mer (French Finance Minister) said "One does not clear the slate (but) this (debt) can be progressively renegotiated. This does not mean ... that the past must be forgotten and that the debts of a country should be dropped after a change in government."

Andrei Illarionov (an economic adviser to Putin) told Reuters that no country is seriously talking about writing off Iraq's debt. "I haven't heard anybody seriously discussing the possibility of writing the Iraqi debt off. The Paris Club is not about writing off, it's not about reduction. It's about how particular countries can and should service their debt and different mechanisms can be used to persuade a country's creditors to do it in a timely and appropriate manner. It is very well known that Iraq is not a less developed country so that the procedures [e.g. ‘Cologne terms' 90% write off - JI] that would be applied to a lesser developed country can hardly be applied to Iraq" he said. Russia itself went to the Paris Club of creditors after its economic collapse in 1998, but only received a rescheduled over 19 years period with two years of grace.

Horst Kohler (IMF Managing Director) said that it was still "premature" to discuss restructuring or forgiving some of Iraq's foreign debt. "We need to know the numbers.”

The International Monetary and Financial Committee (IMFC) said: "It is important to address the debt issue, and we look forward to early engagement of the Paris Club (group of creditor nations)." Reuters

A UN Security Council resolution to rebuild Iraq is likely after the US dropped its insistence that it could initiate IMF and World Bank action without one.

April 12, 2003

G7 finance ministers call on the Paris Club of creditor governments to move quickly in resolving Iraq's debt problems. France's finance minster Francis Mer said "it will be a long process" to determine the size of Iraq's debt. He said the G-7 countries had pledged to address the issue "calmly, methodically and in a professional manner. We need to get the country back on the road."

A study currently being prepared in Kuwait suggests that the $27bn debt owed to Kuwait should be invested in the reconstruction of Iraq, financial sources have told Kuwaiti daily al-Qabas. The study assumes that compensation from a new regime in Iraq would be delayed because of the burden on the country's finances. Under the proposals put forward, the Kuwait Investment Authority (KIA) would hold a portfolio of the money awarded to Kuwait by the UNCC and invest it in rebuilding Iraq's infrastructure and agriculture and oil sectors. Kuwait would then be able to liquidate its assets at a later date by selling its assets to the private sector. (MEES XLVI.10) Has anyone else hear about this??? Do email if you know anything.

In spite of Putin's comments yestarday, Russian Finance Minister Alexei Kudrin said Russia will not forgive Iraq's debt until Russia's own Soviet debts are written off. "No one has forgiven Russia's debt, regardless of what kind of regime it was and regardless of the country's clout. For this reason, international law and our membership of the Paris Club of creditor nations will allow us to press for the repayment of our loans. We are acting on the basis of the same rules here: we are doing what is being done to us." Jubilee Iraq sympathises with this position. The communist period debts probably should have been written, however Iraq should not be made to suffer for this. We urge Russia not to "do as it has been done to" but to follow the golden moral rule and rather "do as it would wish to be done to by ohers."

While a humanitarian crisis unfolds in Iraq, $860m has just been transfered from Iraq's Oil-for-Food account. To pay for desperately need emergency relief? No. It's the latest round of reparation payments for Saddam's invasion of Kuwait. Payments include: $738m to Kuwait, $23m to UK, $20m to Israel, $13m to US, $11m to Saudi Arabia and $10m to Russia. This is shocking. Jubilee Iraq demands an immediate halt to reparation payments so that all the Oil-for-Food money can actually be used for food.

The server hosting Jubilee Iraq has crashed. Hopefully we'll be back online very soon...

April 11, 2003

There's a lot happening, and more probably over the weekend, But I've got to sleep now. Is there anyone in US time-zones who'd like to continue this blog between about 11pm-7am Grenwich Mean Time? if so do email me.

John Snow and Francis Mer (French Finance Minister) have just had a meeting about Iraq's debt.

"There was agreement that Iraq has a lot of debt. There was some difference as to how big was 'a lot,' and who was owed. The discussion did not turn on debt forgiveness or a debt moratorium. It turned on 'we have to get a handle on the debt question.' " said an anonymous Treasury official.

Surprise announcement by Vladimir Putin - Russia is ready to consider forgive some of the $8-12bn of Saddam's debt it holds. He said at the St.Petersberg confernce (with Chirac & Schroeder): "On the whole the proposal is understandable and legitimate. In any event, Russia has no objection to such a proposal. I believe that we could begin to discuss the principles of this issue at the G8 summit in Evian. In any case, we are ready to do so." Like France and Germany he has said that "The best way [to discuss this] is in the framework of the Paris Club." However most of the debts and reperation claims are held by Arab countries that are not part of the Paris Club.

Japan's Finance Minister Masajuro Shiokawa said Japan may reduce Iraq's debt burden, for instance by rescheduling debts. Jubilee Iraq asserts that Iraq has no debt burden to reschedule. Saddam has/had a debt burden, but the only connection the Iraqi people have to this is that they suffering as a result of the money it enabled Saddam to spend in oppressing them.

Gennady Seleznyov (Speaker for Russia's low house of parliament) criticized Paul Wolfowitz call for debt forgiveness, saying it was up to Iraq, not the United States, to negotiate its obligations. "Iraq is not the 51st state of America. All debt issues will be resolved only with the lawful government of Iraq." Jubilee Iraq asserts that Iraq has no obligations "to negotiate" - Saddam's obligations have died with his regime - so Russia and all other creditors might as well cross them off their balance sheets today.

Francois Rivasseau (French Foreign Ministry spokesman) said that Saddam's debt "must be solved on a multilateral level." (by which he means the Paris Club). This statement rules out the unilateral cancellation which Paul Wolfowitz called for on Thursday.

Espanol & Francais pages now online (sorry, blogger doesn't seem to like accents). More languages and more depth to follow. Thanks to all the translators!

The Jubilee Iraq petition is now in the busiest 25 on PetitionOnline.com. Still a long way below the burning issue of the day :-) "American Idol 2 contestant RICKEY SMITH should be reinstated!"

UK Parliamentary Motion being tabled in support of Jubilee Iraq. Signed by Labour, Conservative & Liberal Democrat MPs. Thanks to the MPs (Mark Field, Nick Harvey and Jim Dobbin) who have given initial support to this. UK citizens please lobby your MP to sign the motion - it will be in Hansard on Monday, check back on Jubilee Iraq for the "EDM number" which your MP can use to access the motion.

HELP: Arabic, German, French and Russian speakers. Please could you keep an eye on news in these languages and email me (translated please!) justin@jubileeiraq.org any relevant government statements in those languages - thanks things are moving quickly and your help is really appreciated! Also if anyone would like to run a Jubilee Iraq blog like this in another language, please email.

A spokesman for the German Finance Ministry, responding to Wolfowitz, said that the €4bn owed to Germany could not be cancelled bilaterally. Until the issue is discussed within the Paris Club of creditors, the question of forgiving all or part of Iraq's debt "cannot be answered with a yes or a no."

Clare Short (UK Secretary of State for International Development) said yestarday:
"[Iraq] should be a prosperous middle-income country. In order to make progress, there will need to be agreement to reschedule and restructure Iraq's huge debt and reparations claims."
Jubilee Iraq asserts that the Iraqi people have no obligation to pay Saddam's bills, therefore there is nothing for them to "reschedule and restructure". All that needs to be done is for creditors to draw a single line, crossing out their claims from their balance sheets because Saddam is no longer around to repay them. The Iraqi people are no more liable for Saddam's debts than the Kuwait people or citizens of any other country.

Rick Barton (director of the Iraq post-conflict reconstruction at CSIS) recommends rapidly wiping out all of the Iraqi debts and obligations.

"At the first opportunity, with the World Bank meetings this weekend, donors conference, or whatever, just say: 'Look, the best thing we can do for these people is to disencumber their money as opposed to pretending we are going to pull some of our own out of our pockets. You want to give them the best chance possible. It is not as if these people, what remains of the Iraqi people, should be held responsible for the despot."

Michael Mussa, former-IMF chief economist, expects Iraq's debt to be written down substantially.

'You need to have a new Iraqi government in place that is capable of negotiating its side of that issue. It is not something that is going to be settled by an interim military administration or an interim UN-backed administration,' he said. Mussa agreed that Iraq, even with potential oil exports worth $25 billion a year, could not meet its debts. Any restructuring agreement may vary from debt instrument to instrument, he said. 'Debt on old weapons purchases is probably not going to be honoured very much whereas debt for civilian services that were provided, building hospitals and so forth, may be in a different category.'

Jubilee Iraq disputes the distinction between military/civilian debts. A loans for financing hospitals or roads freed up the cash (which would otherwise have spent on the construction) for Saddam to spend on his wars, palaces and secret police.

John Snow (U.S. Treasury Secretary) echoes Jubilee Iraq's call for debt cancelation:
"Certainly the people of Iraq shouldn't be saddled with those debts incurred through the regime of the dictator who's now gone," (UPI)

This is a powerful statement, unfortunetly he qualified it by saying: "Clearly some debt relief is in order." (Reuters).

There is a danger that partial relief and restructuring could still leave Iraq saddled with a huge proportion of Saddam's debts. What is needed, following the logic of John Snow's statement, is complete cancelation of all debt and reperation claims.

Paul Wolfowitz (US Deputy Defense Secretary), speaking to the Senate Armed Services Committee, urges Russia & France to forgive the $8bn owe to each. (Reuters)

"I hope for example they'll think about the very large debts that come from money that was lent to the dictator (Saddam Hussein) to buy weapons and to build palaces and to build instruments of repression. I think they ought to consider whether it might not be appropriate to forgive some or all of that debt so that the new Iraqi government isn't burdened with it. There's a great deal they can do. This is a time to think about the future."

Jubilee Iraq welcomes Wolfowitz's comments and encourages him and other members of the US Adminstration to also urge the other creditors to write off debts accumulated by Saddam. We also call on the US to drop all it's reperation claims in the UNCC.

April 10, 2003

Economist Noreena Hertz, author of "The Silent Takeover", argues in the Review of International Social Questions that to give Iraq a future, creditors must Drop Saddam's Debt.

"Most of the $127 billion that Iraq currently owes was used to fund Saddam's weapons programs... And this, despite the fact that the tyranny of his regime was already public knowledge."

She points out that recent experience in Afganistan doesn't offer a great deal of hope that creditors will do the decent thing:

"As the case of Afghanistan so poignantly highlights, even loans made to blatantly heinous regimes are most often expected to be serviced. Afghanistan still has foreign debt of over $5.5bn including World Bank, Asia Development Bank and IMF loans, over four time its GDP, which it is still having to service."

Mercury News quotes US Representative Sam Farr (Democrat for Salinas) '' who serves on a private commission looking at the reconstruction of postwar countries: ``I think there's a huge financial problem with Iraq that this administration has been unwilling to discuss with the American public, there's not going to be enough money from oil.''

The article also quotes Rubar Sandi, a Kurdish Iraqi who heads the US-Iraq Business Council: ``A wealthy nation that's paying all its wealth to others is no longer wealthy''. Sandi argues that the Iraqi people should not be liable for at least 75 percent of Iraq's debt because it is related to military activities by the government of Saddam Hussein.

BBC Online interviews Bathsheba Crocker at the Center for Strategic and International Studies in Washington DC (which estiates Saddam's debt at $383bn). The BBC reports that:

"[She fears] there's not much discussion of that $383bn burden going on at the moment - fears which are shared by a range of other academics, analysts, UN officials and even governments. "Once Saddam Hussein is gone, people will be swarming around Iraq like bees round a honeypot. It's astounding that it's not being addressed. Not even, as far as I can tell, in private."

The BBC continues "Getting that could prove problematic. Neither the US nor the UK governments were willing to talk to BBC News Online about whether they have plans for Iraq's debts. Nobody in Washington DC seems ready to budge from the position that the victor should dole out the spoils, despite UK and other European Union countries insisting that debt, like the rest of reconstruction, has to be a multilateral affair... "In all the things the US and other governments say, the debt question has been pushed aside to be finessed later," one UN official told BBC News Online."

April 09, 2003

Pravda reports that Sergei Karaganov - head of the Russian President's Foreign and Defence Policy Council - speaking on Saddam's debt to Russia, Karaganov said that Moscow would have difficulties in receiving this debt "in any case". This sounds promising, but information in english is too limited to make fuller analysis.

HELP: Are there any Russian speakers reading this who could get more information on this speach and Russia's position in general?

First UK politician to sign Jubilee Iraq petition is Nick Harvey, MP for North Devon.

More from Bush & Blair in Northern Ireland:

"It's important for the Iraqi people to continue to hear this message: We will not stop until they are free." (Bush)

"If people keep in mind the key objective -- which is the well-being of the Iraqi people -- whatever -- the past is the past... I think we all then share a responsibilities to make that objective be fulfilled in terms of what the Iraqi people want, in terms of their democratic rights, in terms of their prosperity, in terms of their freedom. And with goodwill and common sense, I'm sure it can be done." (Blair)

These laudable aspirations require that the Iraqi people do not foot the bill for Saddam's debts. Jubilee Iraq's goal of debt cancelation is essential if Blair's "key objective - the well-being of the Iraqi people" is to be achieved.

Bush & Blair's statement from Northern Ireland, 8 April "We will uphold our responsibility to help the people of Iraq build a nation that is whole, free and at peace with itself and its neighbours... We reaffirm our commitment to protect Iraq's natural resources, as the patrimony of the people of Iraq, which should be used only for their benefit. As the Coalition proceeds with the reconstruction of Iraq, it will work with its allies, bilateral donors, and with the United Nations and other international institutions."

The mention of "bilateral donors", countries who lent money to Saddam, is interesting. Jubilee Iraq urges the President and Prime Minister to work with the donors to ensure that they do not try to extract payment of Saddam's debts from the Iraqi people. That is essential if Bush & Blair's committment to the Iraqi people: that Iraq's natural resources are used "only for their benefit", is to be achieved.

Washington Post today. " Harvard economists, Michael Kremer and Seema Jayachandran... argue that a process for repudiating odious debt would discourage banks from bankrolling tyrants like Saddam Hussein in the first place. Under their scheme, once a regime had been declared despotic, no future regime would be responsible for any additional debt it incurs. Such a system would do far more to discipline despots than trade sanctions, because the market itself would enforce it."

Kremer and Jayachandran, "Odious debts" (Feb 2003)

April 08, 2003

Wall Street Journal "The oil-for-food program is now being administered by Secretary General Kofi Annan under a 45-day arrangement that expires May 12. But the French and Russians want to keep it going indefinitely. Their game is as transparent as it is cynical.

Many French and Russian companies benefit by participating in the program. More important, if Paris and Moscow can get the U.S. to concede the program's continuing legality, they will use their veto to blackmail the U.S. and a new Iraqi government into honoring the dirty oil contracts and loans they arranged with Saddam Hussein's regime.

This is a rhetorical battle the U.S. can win easily if it decides to fight. The oil, after all, belongs to the Iraqi people. As for Saddam's debts, what do Iraqis owe the creditors who helped an illegitimate regime oppress them? The continuation of oil-for-food would give France and Russia an effective veto over the purse strings and a tremendous and unjustifiable influence in post-Saddam Iraq. If France and Russia really want to help postwar Iraq, they could forgive Saddam's debts."

Financial Times "Not even future revenues from Iraq's oil exports, estimated at $25bn a year, would allow the country to repay all its debts. Analysts expect the government to receive a debt write-off of up to 90 per cent."

"Western governments will be inclined to accept a substantial write-off . . . as part of their contribution to the rebuilding of the regime," said Jan Mekenkamp at Omni Whittington, the Dutch company specialising in debt recovery from pariah states.

April 07, 2003

ABC News writes today that after the war "the [Iraqi] economy will be in serious trouble, particularly if debt and reparations are not forgiven, because Iraq's oil exports do not produce limitless wealth."

"The U.S. Department of Energy estimates that Iraqi oil export revenues were just $14.1 billion in 2001, including smuggling, out of total exports of just $15.8 billion and an economy worth $28.2 billion. The GDP is less than one-third of what it was in 1989, and there are two decades of war and sanctions to make up for. Oil can pay for a lot, but not for both rebuilding and development [let alone debt - Jubilee Iraq]"

The UK business magazine, The Economist says that if Iraq is made to repay Saddams' debt then it is faced with "an impossible burden".

The hope in the bank debt market is that "Iraq will negotiate a write-off of between 70% and 90%. Traders also guess that the United Nations Compensation Commission (UNCC), which is handling unpaid reparation claims, will cut these to perhaps $40 billion. So Iraq's existing obligations could be reduced to between, say, $50 billion and $75 billion."

April 05, 2003

Website online at jubileeiraq.org and looking great - good work Dan!