May 30, 2003

An new Iraqi group, The Campaign for Security and Basic Human Rights for the Iraqi People, has is collecting a million signatures in Iraq to Kofi Annan calling for "swift intervention to save the Iraqi people from further catastrophe." The petition calls for US/UK troops to be replaced with UN forces while a democratic government is established, and also "for legal proceedings for compensation from all that has happened including the use of Depleted Uranium and lack of medical services. And cancellation of iraqi debt."

May 29, 2003

Pulitzer Prize winning New York Times columnist William Safire criticises US: "we foolishly promised to Russia... a portion of the Iraqi oil... for debts incurred by Saddam"

May 28, 2003

Dr. Abid Allah al-Saad, lecturer at Kuwait University, said on an arabic program, "Bridges between Iraq and Kuwait" (25th May), that his country Kuwait should drop its huge debt and reparation claims on Iraq.

David Chance of Reuters today quotes an economist working on resolving Iraq debts for a leading international body [presumably IMF/WB]: "A Yugoslav-type settlement [66% write-off] can only go through if there is political agreement.. You cannot have a Paris Club debt reduction without an agreement with the IMF." But there is no sign of such an agreement and the IMF could take a year to complete its assessment of the economy and produce a programme for any Iraqi administration to implement. Even then, any Paris Club debt reduction agreement requires unanimous agreement among creditors - something which appears to be unlikely given the grudging acceptance of the removal of sanctions by some of Iraq's creditors, and the big stakes at play in terms of debts owed and the prospect of contracts to develop Iraq's huge oil reserves.

May 27, 2003

An annoymous US Official told Reuters that the US will urge Iraq's creditors to consider debt relief at the G8 summit, without going into detail on its immediate rebuilding needs."We are not in a position where we can quantify that in a way that we can make a big push to donors. It will take a few more weeks at least. Debt reduction is all we can ask for, because we are not in a position to help Iraq explain exactly what it needs yet. We are still trying to get a firm sense of issues like what the real debt position is of the country." Jubilee Iraq is skeptical given recent statements by Colin Powell and others that they expect Iraq to pay the debt, and the recent Security Council resolution. What is clear is that the US has made no moves yet to cancel it's own claims.

An official working on Iraq's external debt for the US Office of Reconstruction and Humanitarian Assistance said documents needed to assess the debts of Iraq's state and central banks had been lost in looting. "It could take up to a year or two to deal with the debt issue because it doesn't matter when it is done, it matters how it is done, it has to be accurate," A second ORHA official earlier said the process of collating Iraq's external debt was proving harder than anticipated. "You have some written documents from the central bank, and the two main state banks Rafidain and Rasheed, but they are guesses, not fine accurate numbers. When you add them up they don't total."

Delegates from 24 countries, representing some of the world's biggest peace groups, have just met at the Global Peace Movements Conference in Jakarta, Indonesia. Their consensus declaration says: "We call for the scrapping of all Iraqi debt. At the same time we note the hypocrisy of the US government in calling for this cancellation to serve its objectives, while demanding payment of onerous debts from all other developing countries." Jubilee Iraq notes that, while some US officials have called for debt cancellation from certain countries, others such as Colin Powel and George Bush have contradicted this, and the US has made no commitment to canceling it's own debt and reparation claims.

May 26, 2003

Jubilee Iraq will be at the G8 Summit in Evian from Friday 30th May to Monday 2nd June to meet with European debt campaigners. Contact us in Evian on 0044 7813 137171 or meet us at counter summit events: on 31st at the "CADTM: Debt Tribunal conference" from 9am in the Auditoire des Droits de l'Homme (Uni Mail) in Geneva, on 1st June on the Drop the Debt procession starting at 10am from two points, the English Garden in Geneva and the aerodrome in Annemasse and converging at the Thônex-Vallard customs house, or on 2nd June at 2pm at the debt campaigns meeting at Cenacle in Geneva.

May 24, 2003

Ahmed Youssef (head of the Arab League's Arab studies and researches institute), lambasted the resolution. He argued that France, Russia and Germany agreed to the U.S.-drafted resolution after “clandestine talks.” Youssef expected that Washington had “promised to give these countries some financial benefits in return for their votes,” including re-paying of Iraqi debts.

May 23, 2003

Russia dropped its opposition to the UN resolution lifting sanctions once it believed its Soviet-era debt and oil contracts would be respected. "Russia 'sold' its vote in exchange for the respect of contracts and debt," the said Izvestia . Gazeta echoes this "Moscow supported the resolution in exchange for American guarantees that $8bn of Iraqi debt would be paid back to Russia."

May 21, 2003

Jubilee Iraq supporter Sinan al-Shabibi, an Iraqi economist at UNCTAD, is interviewed by Reuters on the debt.

Japan appears to make humanitarian aid dependant on debt payment. A briefing from the Ministry of Foreign Affairs today, announcing initial aid, says that it "intends to proceed with full-fledged reconstruction assistance to Iraq in the future, when the... debt issue is resolved." This was echoed to the press by Foreign Minister Yoriko Kawaguchi. Jubilee Iraq welcomes Japanese aid to Iraq, but urges the Japanese government not to politicise humanitarian aid and to submit any claims for money it lend to Saddam to an arbitration tribunal to determine if the debt is odious.

May 20, 2003

New page on odious debts.

Akbar Hashemi Rafsanjani (Iran's influential former president) told Iran's Arabic-language Al-Alam television that "Iran's demand that the future Iraqi government pay reparations for the eight-year war in 1980s, which has been confirmed by the UN and even the Iraqi people, is indisputable. We count on receiving reparations from the future Iraqi government."

New text of US resolution to Security Council
15. CALLS upon the international financial institutions to assist the people of Iraq in the reconstruction and development of their economy and to facilitate assistance by the broader donor community, and WELCOMES the readiness of creditors, including those of the Paris Club, to seek a solution to Iraq's sovereign debt problems;

21. DECIDES further that 5 percent of the proceeds referred to in paragraph 20 above shall be deposited into the Compensation Fund established in accordance with resolution 687 (1991) of 3 April 1991 and subsequent relevant resolutions and that, unless an internationally recognized, representative government of Iraq and the Governing Council of the United Nations Compensation Commission, in the exercise of its authority over methods of ensuring that payments are made into the Compensation Fund, decide otherwise, this requirement shall be binding on a properly constituted, internationally recognized, representative government of Iraq and any successor thereto;

22. NOTING the relevance of the establishment of an internationally recognized, representative government of Iraq and the desirability of prompt completion of the re-structuring of Iraq's debt through the process referred to in paragraph 15 above, further DECIDES that, until December 31, 2007, unless the Council decides otherwise, petroleum, petroleum products and natural gas originating in Iraq shall be immune, until title passes to the initial purchaser, from legal proceedings against them and not be subject to any form of attachment, garnishment, or execution, and that all States shall taken any steps that may be necessary under their respective domestic legal systems to assure this protection, and that proceeds and obligations arising from sales thereof, as well as the Development Fund for Iraq, shall enjoy privileges and immunities equivalent to those enjoyed by the United Nations except that the above mentioned privileges and immunities will not apply with respect to any legal proceeding in which recourse to such proceeds or obligations is necessary to satisfy liability for damages assessed in connection with an ecological accident, including an oil spill, that occurs after the date of adoption of this resolution;

May 19, 2003

More from G8: The official communiqué did not refer to Iraq's debts but John Snow denied that there had been any disagreement. "I think it was broadly accepted that Iraq is not now in a position to begin making repayments on their debt structure." Clearly making the immoral assumption that Saddam's debt should pass on to the Iraqi people. The communiqué did call for a new approach in the Paris Club that would "tailor its response to the specific financial situation of each country rather than defining standard terms". The implication is that a country like Iraq, not covered by existing procedures for heavily indebted poor countries (a specially defined group of 41 countries), could benefit from restructuring including debt reduction "in exceptional circumstances when its need is clearly demonstrated".However, officials at the Deauville meeting said a Paris Club deal for Iraq was not imminent.

May 18, 2003

G8 finance ministers will not to write off Saddam's debts. They want payments to begin in just 18 months times. German Finance Minister Hans Eichel, asked if he saw any room for a write off, he added: "none." Japanese Finance Minister Masajuro Shiokawa said he was reluctant to see debts canceled but that a period of non-repayment was inevitable. US Treasury Secretary John Snow said, "there was recognition that we cannot expect Iraq to make any service payments on that debt at least through the end of 2004," a view which was shared widely at the meeting of finance ministers. French Finance Minister Francis Mer told reporters the Paris Club and IMF would need time to work out how much Iraq owed after decades of conflict. He stressed that experts on the Iraqi side would have to be found or appointed too as a point of contact for any meaningful discussion of foreign debts and what to do about them.

May 17, 2003

John Snow yestarday brought up Saddam's debts with the G8 finance ministers, but only to discuss efforts to work out the exact size of the debts. The one thing the G8 countries seem to agree on is that the Iraqi people should be forced to pay Saddam's debts, something which any reasonable human being can see is completely unjust. There will be another meeting today but Jubilee Iraq has not great expectations.

May 15, 2003

Masajuro Shiokawa (Japanese Finance Minister) told reporters he would prefer not to see Iraq's debt cancelled but that a temporary suspension on repayments was inevitable.

Russian newspaper Novoe Vremya advocates writing off Saddam's debts. Tatiana Kamoza writes "If Moscow demands the repayment of the debts, it will certainly win in the short-term economic perspective but will lose in the long-term political perspective."

John Snow (US Treasury Sec) said he will discuss Iraq's debt with the G7 finance ministers this weekend: "Debt discussions will take place in the context of the Paris Club. In addition, I would like to explore a role for the IMF. I believe that no one should expect Iraq to begin to make debt payments for some timeI believe no one should expect Iraq to begin to make debt payments for some time."

Georgy Mamedov (Russian Deputy foreign minister) said the fate of a draft UN resolution to lift the sanctions depended on resolving the issue of Iraqi debts and contracts agreed with the former Saddam government. "Very heated discussions on this topic are going on in New York...this question will be resolved. The fate of the resolution depends upon it."

Colin Powell betrays the Iraqi people. Speaking today on Echo Moskvy radio in Russia he said he has no doubts that a new Iraqi government will honor Iraq's debts. He said this issue had not been on the agenda of his Wednesday negotiations in Moscow, but he had repeatedly discussed this problem at his earlier meetings with Russian Foreign Minister Igor Ivanov. He said he believes the best way to resolve the problem will eventually be found, possibly through extending the deadline for repaying the debt or through restructuring it.

John Negroponte (US Ambassador to UN) said "There was some concern expressed by some delegations that perhaps we were suggesting some particular solution to the debt issue within the framework of this resolution. I assured delegations today that our draft resolution is not intended to address the question of Iraq's external debt. That is an issue, in our view, best dealt with in other mechanisms and in other fora, particularly the Paris Club. So as far as we're concerned, our resolution is silent on the issue of Iraq's external debt."

May 14, 2003

Horst Koehler (MD of IMF) said at a press conference in Geneva that "Debt relief will possibly be an element of this effort [to help Iraq]." James Wolfensohn (President of World Bank) said, "We have seen the resolution which has been proposed for the U.N. It is not totally clear what our role would be in relation to transfer of the receipts for oil. We are trying to clarify that now.. At this moment in time it is not necessary for us to know precisely what it all means because we are in the process of seeking to gather information and prepare ourselves for a visit to Iraq. We'll go when it is safe."

Jubilee Iraq motion proposed in Scottish Parliament by Donald Gorrie MSP. You'll be able to follow the progress of S2M-21 here. Many thanks to Donald.

May 13, 2003

The US has not asked Bulgaria to cancel Iraqi debt said Foreign Minister Solomon Passy in a press conference with US Ambassador James Pardew on the eve of Colin Powell's visit to Sofia on Thursday. Passy stressed that Bulgaria has also suffered a dictatorship but following democratic governments have never refused to serve the country's debt. "Iraq is rich in natural resources," the minister said reasoning that it won't be such a trouble to Baghdad to pay back what it owes to Bulgaria. James Pardew confirmed that the debt issue would feature in the talks that Secretary Powell is to have Thursday with the top Bulgarian politicians. "The US recognizes that Iraq has a debt to Bulgaria," Ambassador Pardew said. He also admitted that the issue is of great importance to the country.

George Soros told a gathering at the Center for Strategic and International Studies that loans to Iraq and oilfield development contracts that were agreed to under the regime of deposed leader Saddam Hussein should be voided: "I personally would be very happy to see the old creditors of Iraq not getting paid... that would send a signal to the financial markets that it's dangerous to deal with oppressive regimes."

Excellent article on Iraq's odious debts on Findlaw.com by Raja Raghunath of Gilbert & Sackman (Los Angeles).

John Snow (US Treasury Sec) said in an interview with Bloomberg he would also use the G-7 meeting and talks with individual ministers on its sidelines to discuss remedies to Iraq's ``debt overhang" and call for a donor conference to finance the rebuilding of the nation. "The hostilities are over and now the issue at hand is the rebuilding," Snow said. The G-7 realizes ``that a growing, healthy Iraq will be a contributor to the global economy."

Updated Jubilee Iraq petition now online.

May 12, 2003

Zembei Mizoguchi (Japanese Vice finance minister) says Japan has not yet made a decision on whether to support a debt moratorium, "But (Iraq) is not in a situation where it can repay immediately, so we will deal with the matter accordingly." This is contrary to an earlier report in the Asahi Shimbun newspaper - 11th May

The US proposal for the Security Council includes continuation of payments into the UN Compensation Fund. Jubilee Iraq objects strongly and believes all payments should be suspended until claimants demonstrate to a representative Iraqi body why they should be compensated by the Iraqi people for damage caused by Saddam's regime. JI welcomes clause 21 which ask for all oil sales to "be immune from judicial, administrative, arbitration or any other proceedings (including any prejudgment or postjudgment attachment, garnishment, or execution or other action to satisfy a judgment) arising in relation to claims, of whatever kind and whenever accrued, against Iraq." This would prevent Saddam's creditors from seizing Iraqi oil. Jonathan Eyal (Royal United Services Institute) says "additional sweeteners are also offered to France and Russia... the American resolution promises them that Iraq's debts, incurred by Saddam, will still be honoured by any new Baghdad government." I cannot see this in the text of the proposal, but if this has been offered behind the scenes then it is a very worrying development and would amount to the US government betraying all its promises to the Iraqi people.

May 11, 2003

Massoud Barzani, leader of the Kurdistan Democratic Party (KDP), told the Russian daily Vremya Novostei that debt repayment would be "difficult to carry out as the Russia-Iraq contacts signed at the time of the Saddam regime were contrary to the interests of the Iraqi people." The KDP supports Jubilee Iraq.

Japan may temporarily suspend Iraq's debt obligations, the Asahi newspaper said, citing no one. The Japanese government is considering submitting the proposal at the meeting of finance ministers from the Group of Seven industrialized countries beginning May 16 in Deauville. The report didn't say how long the debt repayment moratorium may last, but the finance minister as said he expects Iraq to pay eventually,

May 08, 2003

Economist Mark Spiegel of the Federal Reserve paints a depressing picture of an indebted Iraq from a monetist perspective. "Post-war Iraq faces a daunting debt burden... While there has been discussion of possibly reducing this debt burden through moratoria and outright forgiveness, servicing its outstanding debt burden is likely to be a major feature of Iraqi public finance going forward. Thus, the post-war Iraqi situation appears to be one of a heavily indebted oil-exporting country, more similar to Venezuela than to Saudi Arabia or Kuwait... This heavy debt burden is likely to pose challenges for Iraqi monetary policy." and could lead to "an inflationary spiral" ending in a collapse of the expected exchange rate peg (to the dollar or euro).

Iyad Allawi (leader of the Iraqi National Accord) said, in an interview with newspaper Vremya Novostei, that some of the Russian debt was for illegal deals and would not be recognized by the new authorities. "Robbery took place, not only from the Iraqi side. We have information and we will give it to the Russian government."

The Security Council members are discussing compensation payments, a UNCC official in Geneva, told Bloomberg that discussions are under way among and a decision is likely by early June. Mohammad Abulhasan, Kuwait's UN ambassador, said Kuwait will not forgive any of its claims, but might discuss reducing the 25% of oil revenue that goes to the UNCC. Joseph Sills, a New York-based spokesman for the UNCC, says the US wants to cut the rate to 10-15%.

May 07, 2003

PBS reports that the ancient Iraqis were the first creditors and borrowers in recorded history. The picture shows a cuniform tablet at New York's Metropolitan Museum, "Tamairya and Ish Punaman owe 6 minas of silver to Asuridi" at the usual interest rate, back around 1800 BC, of 20 percent a year with an extra 10 percent late fee. A broken envelope suggests the debt was paid, the matter settled. Joan Aruz from the Metropolitan Museum says "If the tablet is still inside the envelope, one would assume that the debt was not yet paid. [we find unbroken envelopes] Quite often." This implies that debt defaults were common in ancient Iraq. There is also reason to think that the Jubilee principle recorded by Moses, which requires periodic debt cancellation to ensure social equity, may well have originated in Iraq where Abraham came from.

"Debts of a Dictator on US channel PBS' Newshour program. The program quotes Robert Hormats, Vice-Chairman of Goldman Sachs, who points out that there are precedents for soverign debt default: "Russian bonds were never paid; Chinese bonds of the earlier government before the revolution were never paid. In many cases, bonds have not been paid. American bonds of the Confederacy, when the Confederacy collapsed, were not paid. So there's a history of sovereign debt default." Moreover he says Iraq cannot afford to repay debts because "oil revenues now are only about $15bn annually. For the moment, their oil money is simply not enough to pay for the reconstruction of the country which is going to be $20-25bn a year."

May 05, 2003

Kuwait has stepped up high-level lobbying efforts to secure compensation payments, reports the FT. Officials and lawyers have been meeting senior officials in the US State Department, insiting that the cash is essential to pay for the rebuilding of Kuwaits infrastructure and the cleaning up of oil spills from the 1990 invasion. John Lonsberg, from the law firm Bryan Cave which is acting for both the Kuwaiti and Saudi governments, said: "The political radar has moved on but we cannot forget that there are issues still to be dealt with from the first Gulf war...Many people will say these are rich countries, but they really need this money."

John Taylor (US Treasury Undersecretary) told Reuters "Looking at historical comparisons is a reasonable way to proceed, whether Serbia [66% debt write-off] or other post-conflict countries... The fact that it was a terribly oppressive regime is a factor that has to weigh in the calculations... Debt service payments are so large you cannot expect the interim authority to make payments this year and next year."

Richard Segal (research director at stockbroker Exotix) predicts that traded Iraqi debt "could go as high as 35 to 40 cents on the dollar." (up from 7c last year and from 25c since the end of the war). Should a price assumes a large fraction of the commercial debt will be payed.

May 04, 2003

Sergei Kolotukhin (Russian deputy finance minister), speaking at the ERBD annual meeting in Tashkent, told reporters even basic facts, such as the level of Iraq's indebtedness were not known. It would also be necessary to take into account Iraq's potential oil revenues which could be used to pay debts. "It is premature to say what the creditors would do."

Peter McPherson (financial coordinator of the US Office of Reconstruction and Humanitarian Assistance in Iraq) said in a conference call with reporters on Friday that solving the debt issue would be a confidence-builder for Iraq. "I think the global debt issues are ones that need to be addressed reasonably promptly."

May 03, 2003

Jubilee Iraq article (in Farsi) published in Iranian newspaper.

Robert Zoellick (US trade representative), responding to a question a press conference in Berlin ("[does] Washington expect Germany to take one or two concrete steps in order to show that it's committed to improving the relationship"), said "We are now moving into a different phase with Iraq... Clearly there are discussions moving forward about Iraq's debt, whether it be forgiven or whether it be rescheduled in different fashions." This is not an explicit call for cancellation, but sounds promising; if this is really what the US administration want (Jubilee Iraq's impression is that there is considerable disagreement behind the scenes in the US) then it should lead by example and reliquish all it's financial claims on Iraq.

May 02, 2003

Michael Raboin, director of the UNCC, said that the unresolved reparation claims would probably be settled at about $40bn, $5bn to individuals & businesses, $35bn to governments, based on the recent pattern of awards. Awards in those cases are expected to be less than 10 percent of the asserted value, and would be paid over 10 years, according to a new payment plan the commission will discuss in coming months. Jubilee Iraq argues that all these claims, and the $26.4bn which has been settled but unpaid, should be written off, they are not the responsibility of the Iraqi people.

Dov Zakheim (US Undersecretary of Defence) answered a question on debt at a press conference yestarday: "the basic concept is to, at the appropriate time, look at the country's income and look at its total obligations, its debt obligations to governments, its debt obligations to private banks and other obligations that it may have. And you mentioned these very specific obligations that Iraq has in the nature of reparations.... that have been imposed upon Iraq as a result of the suffering that they inflicted on Kuwait in their invasion in the first Gulf War." Jubilee Iraq response that Iraq's income has no bearing on the legitmacy of Saddam's debts; we also challenge the Undersecretary's comments that Iraq, collectively, inflicted suffering on Kuwait. Saddam and his regime did this, the vast majority of the Iraqi people did not support the invasion of Kuwait and are not responsible for the reparations.

The Heritage Foundation, an influencial conservative US think-tank, recommends cancellation of Iraq's debts. "If Iraq's debts are not forgiven, the Iraqi people will be financially crippled for a generation, or even generations, eliminating any prospect of a growing and prosperous Iraq." It recommends that the Bush Administration should:
(1) Advocate debt forgiveness as opposed to debt restructuring, which would only prolong the suffering of the Iraqi people. (2) Apply diplomatic pressure on Paris, Berlin, Moscow, and Arab nations. (3) Work closely with Downing Street to develop a joint U.S.-U.K. position on debt. (4) Not allow a quid pro quo in return for debt forgiveness.

John Taylor (US Treasury Undersecretary for international affairs) told a CSIS conference on reconstruction: "The first thing to do is to make sure that we are not going to start requiring service payments on that debt in, say, the next year and a half. Certainly for the short term -- a year and a half at least -- there is really no expectation that payments will be made." Jubilee Iraq contend that the first thing for the US and other creditors is to relinquish their illegitimate claims, not merely delay them for 18 months.