October 28, 2005

Norway's new government has signalled its intention to support the cancellation of illegitimate debt and the establishment of an international court to hear matters concerning illegitimate debt claims. The Soria Moria Declaration, which outlines the governments committments includes: "Norway must adopt an even more offensive position in the international work to reduce the debt burden of poor countries. The UN must establish criteria for what can be characterised as illegitimate debt, and such debt must be cancelled.... The government will support the work to set up an international debt settlement court that will hear matters concerning illegitimate debt." (along the lines of Jubilee Iraq's proposed arbitration tribunal) The statement also challenges the Paris Club and IMF's policy of putting economic conditions on debt relief, somthing that is being required of Iraq, stating: "No requirements must be made for privatisation as a condition for the cancellation of debt."

Although Norway does not hold any debt claims against Iraq, the move is significant because "it means that a major northern government has finally recognised that there is such a thing as illegitimate or odious debt, which is the liability of the lender and not the borrower" (Joseph Hanlon). Jubilee Iraq has worked closely (including speaking in Bergen last year) with Norwegian debt campaigners such as SLUG and Changemakers, whose committed efforts have now borne significant fruit. Jubilee Iraq also applauds the Norwegian government and encourages it to implement these principles and other countries to follow its lead.

October 27, 2005

The UNCC today paid out $654m of Iraqi money - more than the total aid pledged by the world to victims of the Kashmire earthquake - to 15 Governments for distribution to 239 successful claimants. The vast majority going to government agencies and companies. This brings the total Iraq has paid to date to a staggering $20.055bn. The UNCC says that "future quarterly payments will depend on actual income, which currently averages approximately $120m per month" (5% of oil revenue). Kuwait received $509m. Jubilee Iraq continues to demand an end to UN enforcement of payments, an immediate moratorium and bilateral discussions with claimant countries who should be encouraged to drop all claims not relating to individuals.

October 19, 2005

Like Iraq, Nigeria became heavily indebted under a military dictatorship. This week, after over a decade of dragging its feet over calls for debt reduction, the Paris Club cartel of creditors finally agreed to a 67% debt write off for Nigeria. Why has the Paris Club finally acted? The reason may well be that Nigeria has been demanding an application of the odious debt doctrine and has threatened repudiation. In March Nigeria's House of Representatives passed a resolution to halt debt payments. The resolution stated Nigeria's economy had been "devastated by a series of military regimes from 1984 to 1999, who stole billions of dollars from state coffers." The Nigerian Senate later voted to honour debt servicing for this year, but the Represtentatives resolution had shaken the creditors.

Debayani Kar, of Jubilee USA, said the Paris Club write-off "demonstrates the partial success of the Nigerian parliament's threat to cancel its own debt through repudiation, which helped to force the hand of these creditors". David Ugolor, president of the African Network for Environment and Economic Justice (ANEEJ), weighed in, saying: "The Paris Club cannot expect Nigeria, freed from over 30 years of military rule, to muster $12 billion to pay off interest and penalties incurred by the military. Since the debt, by [the current president's] own admission, is of dubious origin, the issues of the responsibilities of the creditors must be put on the table at the Paris Club." Sony Kapoor of Christian Aid, while welcoming confirmation of the Paris Club deal, agreed that "it took the threat of repudiation to get this cancellation". As if "the obvious need of the people and the odious nature of much of the debt were not enough," Sony Kapoor adds, "what is worse is that creditor countries are extracting a pound of flesh in the form of $12 billion worth of payments from Nigeria and have put in place a new IMF program despite Nigeria not owing anything to the Fund." On a more positive note, he said, "the deal has set the scene for a more assertive negotiating stance by other indebted developing countries." Countries like Iraq.

October 18, 2005

Kuwaiti newspaper the Arab Times notes in passing that "Foreign Affairs Committee MP Mohammed Al-Saqer... recently confirmed Kuwait’s unanimous decision taken at the Paris Club for the cancellation of 80% of the Iraqi debt. He maintained that the implementation of a partnership project with Iraq was a better option than letting the amount, stagnate while waiting to be repaid." There have been mixed signals from Kuwait on the debt since April 2003, but Jubilee Iraq has not seen any formal confirmation that Kuwait has committed to applying the Paris Club treatment of 80% phased reduction (which we argue, though a start, is insufficient and unfairly conditional).

October 16, 2005

Finance Minister Ali Allawi told Saudi daily Al-Hayat that Iraq's total obligations peaked at $200bn, including $55 billion in reparations, $48bn claimed by Saudi Arabia, and $40bn to the Paris Club, among the other claimants are Qatar and the United Arab Emirates, claiming $2bn each. A full tally of debt claims is here on Jubilee Iraq.

October 11, 2005

Alan Beatie warns in an opinion piece in the Bangladesh Financial Express that countries writing off Saddam's debt may do so at the expense of their aid budgets. "Japan admitted in August that it was thinking of counting debt relief for Iraq as part of its pledge to increase aid by $10bn over the next five years, as it is permitted to do under OECD rules. If it counted the full $7bn of defaulted Iraqi debt it has pledged to write off or reschedule, that would make up most of its pledge at almost no real cost." Jubilee Iraq has argued for years that while Saddam's odious debt must be writen off, it is unethical for countries to count this as aid and thereby reduce assistance to Iraq and other countries. Assitance to Saddam's war effort in the 1980s is of a different category entirely to providing water treatment equipment for Baghdad today, or indeed tents for victims of the earthquake in Bangladesh. Not only would this be extremely cynical creative accounting, but it helps with the illusion the creditors are trying to portray that writing off illegitimate debts is somehow altruistic assistance to Iraq.

October 08, 2005

Bulgarian Finance Minister Plamen Oresharski, speaking to reporters at the sidelines of the IMF/WB Meetings, said the government is still considering whether to match the Paris Club terms. In an interview for Trud daily he said: "We do not have a large field for maneuver, as this [the Paris Club terms] is an international practice." He added that he had reached an agreement with the Iraqi Finance Minister Ali Allawi "to start consultations over the possibilities of settling the debt." Former finance minister Milen Velchev had earlier told Trud that his centre-right government "has made a lot of unsuccessful efforts to reimburse the larger part of the Iraqi debt."

October 07, 2005

Anthony Cordesman, stategic analyst at CSIS, writes in the World Peace Herald with suggestions to the Arab League for supporting reconciliation in Iraq, as it as pledged to do. His second suggestion is "deal with the issues of debt and reparations. Make it clear that a national unity government will be free of such burdens and that a strong incentive exists to find suitable compromises."

October 05, 2005

Almost a year after the Paris Club agreed to reduce their claims on Iraq by up to 80%, dependent on IMF conditions, Italy has become just the 3rd Paris Club country (after Canada & US) to ratify this by signing a bilateral agreement with Iraq. This cancels around $900m for the $3bn claim immediately, with a committment to cancel a further $1.5bn dependent on Iraq meeting IMF conditions for 3 years.