April 28, 2004

The Christian Science Monitor's editorial "Iraq and Global Debt Relief" argues that cancelling Saddam's debt and that of other dictators is good for security since "poverty helps drive terrorism" and therefore "many other nations saddled with unpayable debts are deserving of financial forgiveness." The editor hopes that "By the time the IMF meets again this fall, the Bush administration will, it is hoped, have broadened its horizons in the global war on terrorism to see debt relief as a prime weapon of mass enrichment, and protection." World Bank President James Wolfensohn noted at the spring meetings that the world spends $900 billion a year on defense but only $50-60 billion on development. "I suggested humorously the other day that if we spent $900 billion on development, we probably wouldn't need to spend more than $50 billion on defense."

Jubilee Iraq agrees with CSM's arguments wholeheartedly but is not convinced or the premise "The Iraqi economy will be more secure because the US has won pledges from many nations to reduce Iraq's huge debt." The pledges are no where near reality yet and are anyway insufficient - only 50-65% of the odious debt and none of the reparations - and will be dependant on Iraq submitting to Paris Club : IMF economic conditions. The US government and other creditors should heed CSM's strong arguments and write off all Saddam's bills without conditions.

The same argument applies to other poor countries saddled with dictators debts such as the Democratic Republic of Congo where I (Justin Alexander, UK Coordinator of Jubilee Iraq) am currently visiting.

April 25, 2004

Russian news service ITAR-TASS reports that Finance Minister Alexei Kudrin said today at the IMF spring meeting that Russia is not going to consider a unilateral debt write-off for Iraq: "We are waiting for the results of the IMF work to assess Iraq's economic prospects,. After that the creditor countries will have to adopt a joint statement on the Iraqi debt within the framework of the Paris Club."

April 23, 2004

French Finance Minister Nicolas Sarkozy discussed debt with U.S. Secretary of State Colin Powell, and expressed caution about the amount of help Iraq should get. "Colin Powell asked for maximum Iraqi debt relief," Sarkozy told reporters as he left the meeting with Powell. "France is fully agreed on debt relief for Iraq. The question was what percentage." He added "Iraq has the world's second largest oil reserves. It is difficult to explain that we are going to cancel 100% for Iraq and 50% for the others. Can we find a way out?"

Jubilee Iraq provides the explanation Sarkozy asks for - 100% of odious debt should be cancelled because the Iraqi people have no obligation to pay it under international law.

April 20, 2004

The AP reports that French insurance giant AXA has agreed to compensate three Jews who owned property in Iraq and were expelled in the early 1950s. Israeli Justice Ministry spokesman Yaakov Galanti said this is a precedent that could pave the way for reparations for some 850,000 Jews who left Arab countries (600,000 from Iraq) after Israel's establishment in 1948. The group, "Justice for Jews from Arab Countries," estimates that property left behind in Arab countries was worth $100 billion.

James Wolfensohn, the World Bank president, said in an interview with the Guardian said the intellectual climate regarding debt had altered as a result of the White House's argument that the Iraqi people deserved a fresh start because their country's debt burden was accumulated under a brutal dictator. "In the light of the debt relief initiative for Iraq, a lot of countries are saying 'we also had debts assumed by people that shouldn't have assumed them'. They are saying that if debt relief is happening for Iraq it should be happening for us too." Jubilee Iraq notes that while a few US officials (Snow, Pearle & Wolfowitz) did briefly argue in April 2003 that the debts should be written off because of the nature of the former regime, neither the White House nor James Baker have made this argument in public, and have in fact shunned our attempts to advance this odious debt argument (for example blocking a bill in Congress, refusing to enter into dialogue or to attend the Berlin conference on odious debt last month).

April 19, 2004

Bulgarian news agency Novinite reports "Bulgaria will not write-off but reschedule Iraq's debt in view of the country's economy and oil sector potential, Finance Minister Velchev stressed during a meeting with US Deputy Secretary of Commerce Samuel Bodman. Bulgaria should not be expected to write-off a great amount of Iraq's deal as it is of great importance that it recovers the money."

April 15, 2004

The Gulf News, in an article entitled "Arab Monetary Fund reiterates bid to seek repayment of Iraq debt", reports that the AMF board said at it's annual meeting yesterday that it would not write off arrears owed by Iraq and will seek repayment: "The Fund discussed the arrears owed by Iraq to the AMF and recommended efforts to reach an acceptable settlement of the debt when Iraq's conditions are right for repayment."

The Khaleej Times puts a different slant on the meeting "AMF allows Iraq more time to repay its debts". It quotes Chairman Saeed Taoufiqe Al Khouri: "Iraq $120 billion loans from a number of Arab countries can be restructured and more time can be given to adjust the loans... The present situation is inappropriate to ask our brother to repay their debts, we need to support them morally and financially." Jubilee Iraq notes that he mentions restructuring and rescheduling of loans, but not cancellation or reduction.

April 10, 2004

On the anniversary of the fall of Saddam, Mas'ud Barzani the leader of the KDP made a statement to the Iraqi people on Salah-al-Din Kurdish TV which includes: "We urge the donor countries and the international community as a whole to fulfil the promises made to the Iraqi people by offering economic help, carrying out reconstruction projects, writing off Iraqi debts and embarking on investment in the country to ensure an economic revival, progress and prosperity. Improvement in people's income and the economic situation will have a very important role in spreading reassurance and stability, because of the confidence and hope that will create." (translated by BBC Monitoring)

Kuwait's Speaker of Parliament Jassem al-Kharafi told the al-Masaref magazine "I do not think the time is appropriate to discuss reduction of debts and compensations, or even eliminating them because the situation in Iraq is currently at best untenable," He said the appropriate time for talks with Iraq would be "when a stable government is in place, fully recognised by the international community and when it is in a position to sign international accords and to show it can abide by its international obligations". The Speaker, in the remarks carried by newspapers and state news agency KUNA, added: "Kuwait has not received any official request from Iraq about the debts and compensations."

Haifa Zangana, an Iraqi novelist and former political prisoner of the Ba'ath regime, writing in the Guardian today, concludes: "In the rush to mortgage Iraq, Iraqi people should not be bound by contracts and long-term agreements signed on their behalf, nor should they be liable for odious debt incurred by Saddam's regime. Why should they repay loans from a long list of foreign governments, all of whom surely lent the money in the full knowledge that it would be used to arm and support their persecutor?"

April 07, 2004

This website and our email accounts have been out of action for 3 days due to server problems. All is sorted out now, an email you sent to us bounced, please resend it now. - Jubilee Iraq webmaster

April 04, 2004

"Unless debt and reparations are dealt with properly, Iraq is basically bankrupt," Rubar Sandi, President of the US-Iraq Business Council and CEO of Corporate Bank Business Group. (LA Times)

Italian Deputy Trade Minister Adolfo Urso said that the UN should look at ways to scrap Iraq's foreign debt after Saddam is deposed. "Otherwise Iraq would have an enormous burden from the outset". (Dow Jones)

Jassim Al Manai, chairman of the Arab Monetary Fund said Iraq is passing through a crucial stage of resurrecting its economy that has been shattered by three major wars and the disruption of its oil exports due to a long UN embargo. The AMF estimates debt at around $120bn, including $60 billion for Arab countries, Russia and East European nations, and nearly $18 billion for multi-national organisations and credit institutions, including the AMF [presumably this $18bn includes commerical debt - JI]. Manai was addressing Iraqi officials at the end of a 10-day crash training course. "There is no doubt that Iraq is in a pressing need now for sound and effective planning. These plans should focus on controlling inflation, stimulating economic growth, tackling the debt and encouraging local and foreign investment.

In a separate report, the AMF said it would continue its technical assistance for Iraq although its membership in the Fund has remained suspended since 1992 for its failure to repay outstanding debt, now estimated at around $464 million. It said the AMF would support all efforts aimed at tackling Iraq's foreign debt, whether by rescheduling, postponement or partial write-off.

James Baker, speaking at a lunch sponsored by the University of Texas at Dallas, said "These debts can never be paid in full, even under the most optimistic circumstances," and efforts to enforce the debts could "sink the Iraqi economy and, with it, all practical hope for a successful transition to a government of, by and for the Iraqi people." He said that debt relief "cannot wait, as is the usual practice, until there is a new government in place, or we will never get the job done in the year 2004." He said he plans to begin discussions in the next few weeks regarding the exact amount of debt each country would forgive. The text of the speach may appear online shortly here or here.

Jubilee Iraq is concerned that Baker and the Paris Club will rush through a deal which is bad for Iraq - leaving too much debt, ignoring the guilt of creditors in financing Saddam, and requiring harsh IMF economic conditions - before an elected Iraqi government is in place.

April 03, 2004

“Analysts calculate that Iraq debt payments alone would be $1.6 billion annually for the first five years based on a 66 percent write-off and a five-year grace period, stepping up to $4.8 billion for the next 10 years.” (Reuters)

April 01, 2004

RosBusinessConsulting reports what Russian Finance Minister Alexey Kudrin said today on the Echo Moscow radio stations: He "declared that the issue of Iraqi debt settlement will be solved together with the World Bank and the International Monetary Fund (IMF). According to Kudrin, there will be negotiations between Russian government representatives and the Iraqi cabinet with the participation of the World Bank and the IMF in 2004. "The main principle of the Iraqi debt settlement is negotiations with the legitimate government of Iraq", Kudrin mentioned. The Finance Minister reiterated that the Iraqi state debt had amounted to more than $100bn by now and the bulk of this amount Iraq had owed to the G8 countries. Russia is not planning to write off the debt significantly, Kudrin stressed." Novosti adds that Kudrin said Russia has prepared proposals for writing off the part of the Iraqi debt relating to arms supplies.

Article 25 of the Basic Law (the transitional constitution signed by the Governing Council last month) includes: "The Iraqi Transitional Government shall have exclusive competence in the following matters: (A) Formulating foreign policy and diplomatic representation; negotiating, signing, and ratifying international treaties and agreements; formulating foreign economic and trade policy and sovereign debt policies."

The opens the way for the Transitional Government to sign an agreement with the Paris Club, which will make Iraq inherit a sizable proportion of Saddam's debt - something which the vast majority of the Iraqi people oppose.

Al-Taakhi, The KDP's newspaper, reports today that Mohammad Bahr al-Uloom, current president of the Governing Council, returning from a trip to China, said that China has decided to write off half a billion dollars of debt. (translated by IWPR)

The figure for total Chinese claims is unclear, but the most recent figure quoted, in an AFP report from the Abu Dhabi donor conference on 29th Feb, put the total at $5.8bn. This appears to imply that China is offering less than 10% debt reduction.