March 24, 2005

Bulgarian Finance Minister Milen Velchev has said it is not possible that Bulgaria write off the Iraqi debt, rejecting diplomatic calls from Iraq. Earlier this week Iraqi Ambassador to Sofia Hayder al-Barrak called on the Bulgarian government to write off the whole USD 1.7 B debt, instead of the 80% offered by the Paris Club (which Bulgaria is not a member of). Bulgarian new agencies write that part of the debt does indeed come from "the export of weapons."

March 19, 2005

Greg Palast, reporting for the BBC, uncovers how the US Administration was divided over plans to privatize Iraq's oil. Jubilee Iraq has long argued that a push for privatization underlies the way the US has handled debt (making relief conditional on an IMF economic program) and these revelations add weight to the argument that such a privatization plan exists.

March 17, 2005

Iraqi newspaper Al-Furat today has a front-page report which attacks Kuwait for calling on other creditor countries to adopt a new strategy to pressure Iraq to pay the debt. The newspaper says it regards this action as a new economic embargo on Iraq. Al Mada, another Iraqi newspaper, has a long article on the Paris Club on p13. On the 13th March Al-Zaman's front-page report said that the meeting between German Chancellor Schroder and Iyad Allawi focused on writing the debt.

The 17 US prisoners of war in Iraq are continuing their law suit claiming compensation for their detention by Saddam's regime in Abu Gharib in 1991. They initiated the case in the Washington DC District Court in April 2002, were awarded $942m by that court in summer 2003 and have been pressing the US government to pay that money from frozen Iraqi assets. In the next stage, the US Supreme Court has given the Justice Department until March 21 to respond. If the award is upheld by the Supreme Court, then on similar maths the US government must owe over $1 trillion to the the 10,000s of Iraqi detainined and abused in Abu Gharib, Camp Bukka and elsewhere over the last two years. The "condolence payments" which the US is making to Iraqi families however seems to value an Iraqi life at less than $2500.

The US, which typically provides the President for the World Bank, has nominated Paul Wolfowitz for the post when James Wolfenson retires on 1 June. His appointment has sparked considerable controversy.

Jubilee USA (unconnected to Jubilee Iraq) warns that "Wolfowitz's role in promoting economic changes in Iraq and elsewhere suggest he would work to push the Bank to focus even more on imposing so-called 'structural adjustment' policies like forced privatization and indiscriminate trade liberalization, policies which have failed to create growth and have exacerbated poverty across the globe." However it also notes that "perhaps the silver lining of the choice is that Wolfowitz was a leading advocate for canceling Iraq's debt, describing that nation's debt in public statements in a way to indicate that it was odious."

In a statement on 11 April 2003, Wolfowitz called for the cancellation of "money that was lent to the dictator (Saddam Hussein) to buy weapons and to build palaces and to build instruments of repression." This is a clear application of the odious debt principle, and Jubilee Iraq calls on Wolfowitz to follow through with his statement and support an odious debt arbitration tribunal for Iraq.

March 16, 2005

Transparency International today highlights, in it's Global Corruption Report 2005, the vast level of corruption in Iraq and warns: "There is a real danger that rapid privatisation will soon be enforced by the IMF and the Paris Club of official creditors as a condition for reducing and rescheduling some of the Saddam regime’s US $120 billion foreign debt. Experiences of the former Soviet Union and other indebted countries in being forced to privatise hastily suggest that a similar scenario in Iraq may also unleash immense corruption."

March 15, 2005

Al-Furat Iraqi newspaper has a front page report today, criticising Kuwait for calling for its fellow creditors to adopt a new strategy in extracting debt from Iraq. This action by Kuwait is a serious as a new economic embargo, it writes. Al-Mada has a long report on the Paris Club on p13.

March 13, 2005

Refering to the report from Tony Blair's Commission for Africa, K.Y. Amoako, the Executive Secretary of the UN Economic Commission for Africa and a member of the Commission, said that the report acknowledged "the damaging impact of the structural adjustment years" imposed by international financial institutions and also "the odious debt built up by irresponsible borrowing and irresponsible lending." Jubilee Iraq does not want a Commission for Iraq to discover in 20 years time that Iraq had suffered undevelopment because of IMF structural adjustment on the back of Saddam's odious debt.

Iyad Allawi met with German Chancellor Schoeder in an undisclosed Gulf state. Among other things Allawi said the "talks dealt with the scrapping of the remaining Iraqi debts."

Nabil al-Muwsawi, a member of the interim National Assembly and the United Iraqi Alliance, was a guest today on the Al-Iraqiyah TV programme Al-Minbar al-Iraqi. He criticised Iraq's Arab neighbours for not writing off the debts.

March 11, 2005

The UN Compensation Commission, holding it's 55th session in Geneva from 8-10th March has awarded an additional $265m of reparations against Iraq. This raises the total reparations awards made so far to $52.1bn of which Iraq has paid over $19bn. Jubilee Iraq continues to argue that Iraqis should not be paying these reparations payments for Saddam's crimes, while recieving no reparations themselves for their suffering under Saddam and the destruction caused in wars and occupation. The next, and possibly final, meeting of the UNCC will be on 28-30th June and Jubilee Iraq and partners will use the occasion to focus world attention to this great injustice and change it.

March 10, 2005

Like Iraq and the Philipinnes, Nigeria is also taking the doctrine of odious debt seriously. Yestarday Nigeria's House of Representatives passed a non-binding resolution demanding the country repudiate its $35bn foreign debt. The resolution said Nigeria's economy had been "devastated by a series of military regimes from 1984 to 1999, who stole billions of dollars from state coffers." and declared "This Honourable House does call on Mr President to cease forthwith further external debt payment to any group of foreign creditors." However, parliament does not have the authority to halt foreign debt repayments and the Senate voted today to honour debt servicing this year. Nigeria is currently paying around $1bn a year in debt service, despite having one of the lowest per-capita incomes in Africa. Reuters says Nigeria has been excluded from debt relief initiatives in part because it has refused to sign up to an IMF structural adjustment program.

March 09, 2005

Speaking at the UN summit on debt today, Paris Club secretary Emmanuel Moulin mentioned the figures judged by the IMF to represent a "sustainable" level of debt (i.e. payable over the long term):

EDT/GDP = 86%
EDT/XGS = 162%
TDS/XGS = 36%

where EDT = the total Net Present Value of the debt, XGS = Export earnings (from goods and services) and TDS = the total debt service paid in a year. Apparently the Paris Club's deal was calculated to move towards the level of debt implied by these percentages, although Moulin did not explain the assumptions underlying this calculation.

In laymans terms the IMF envisages Iraq paying around a third of it's oil export earnings on debt service. This would be on top of the 5% of oil earnings already going to pay reparations. Jubilee Iraq rejects this level of debt payment as yet another gross injustice against the suffering Iraqi people.

Following the interim Iraq National Assembly's endorsement in November that most of Saddam's debt should be arbitrated or repudiated as odious, other countries are beginning to follow suit.

Filipino senator Manuel Villar this week proposed a Debt Relief Act, in which a debt relief council could invoke "the relevant privileges" necessary to facilitate "cancellation of odious debt or restructuring of debts or both to ease debt payments." Villar said, "Odious debts are those incurred without the consent of the people, those which cannot have benefited the public, and whereby the lender must have been aware of the two preceding conditions." The Philippines' staggering debt load is largely attributed to economic policy under the corrupt administration of former president Ferdinand Marcos who ran debt up from $1bn to $28bn over his reign from 1966-86.

a UN conference entitled ”Sovereign Debt for Sustained Development: Issues for Countries that Access Financial Markets" has just ended. IPS reports that, responding to a question about odious debt in Iraq and elsewhere, Emmanuel Moulin, the secretary-general of the Paris Club and the International Debt Office Chief in the French Finance Ministry, said the Paris Club never recognised the concept of odious debt due its difficult implementation as a policy. However there are very clear proposals on the table, from Jubilee Iraq and others on how to practially implement odious debt through an arbitration tribunal.

Joseph Stiglitz, the former chief economist of the World Bank and now a professor at Colombia University, challenged Moulin and called for a specific provision on any new sovereign debt restructuring mechanism that addresses the question of odious debt. Such a provision should explore the culpability of both the debtor and the creditor, comparing the odious debt transaction to that undertaken when credit card companies attempt to lure teenage children with no credit histories to sign up for credit cards and incur debt. "The notion of culpability is one that we can all understand. One can put more weight on it going forward with a clear legal structure, but one should put weight on it now that a large fraction of Argentine debt can be traced to compound interest from lending to the generals."

March 03, 2005

Jacek Tomorowicz, head of foreign policy at the Polish Finance Ministry, told Reuters: "We plan to start formal negotiations in the first half of the year and to come to an agreement as quickly as possible. The Paris Club proposal is a benchmark for us, and although it's too early to say what our bilateral agreement with Iraq could be, we are considering a partial reduction of its debt." Poland's is looking to conclude a settlement of its own $16 billion account with Paris Club members, built up during the communist era.

March 01, 2005

German Chancellor Gerhard Schroeder, speaking to a business audience during a visit to Kuwait today mentioned the Paris Club deal and said that “We would welcome a similar step by Arab creditor nations." He added regional tensions, in particular between Kuwait and Iraq, would make debt reduction a sensitive issue in some countries.

London-based Iraqi newspaper Al-Hayat today publishes an interview with Central Bank Governor Sinan al-Shabibi. He described Iraq's current relationship with the IMF as "crucial", which he said serves the economic interests of Iraq. He said he backs any steps to develop Arab and foreign investments in Iraq. He talked about the Paris Club debt relief agreement's linkage to the implementation of an IMF reform programme. He added that Iraq will do its best to get a bigger debt reduction rate than the one it got from the Paris Club, but that reduction to $20bn, about half the annual gross domestic product, would be acceptable.