January 23, 2006

The Bretton Woods Project writes about the IMF and World Bank's role in Iraq: "As the World Bank and IMF ratchet up efforts to plough money into Iraq's reconstruction, civil society groups call for greater national and international scrutiny over crucial reforms and a total cancellation of the country's 'odious debt..." [more]

January 19, 2006

Today the UNCC dispursed another $284,816,396 of Iraqi money to eight governments for claims dating back to 1990-1. The largest recipient was Kuwait with $127m, however a similar amount, $124m, was taken by a single UK company. All of the payments were to corporations or governments, not to individuals.

Jubilee Iraq continues to call for a immediate moratorium in reparation payments. Since the outside world is doing little to help (and much to harm) Iraq needs to be able to use its own revenues to create employment and restore its still shattered infrastructure, not pay vast sums for Saddam's crimes to wealthy companies and countries.

January 16, 2006

Following a 2 day conference in Amman, Iraqi trade unions today issued "A Joint Concerning the Programs of the World Bank and International Monetary Fund in Iraq":

The Iraqi economy has been severely affected by decades of sanctions, wars and occupation. The Iraqi trade unions and federations believe in the capacity of the country with all its oil and mineral resources to provide a decent living standard for Iraqis. The federations and unions consider that the wars and occupation have caused a dramatic decrease in the living and social standards of Iraqis and especially of workers. The federations and unions stress the importance of complete sovereignty for Iraq over its petroleum and natural resources so as to develop them in a way that assures a complete reconstruction of the country. We wish to stress the following points in regard to the policies of the IMF and World Bank in Iraq:

1) Increasing transparency and additional representation for Iraq in the decision-making structures of the IFIs.
2) To stop imposing structural adjustment conditions for loans.
3) Agreeing to provide funding for public services and state-owned enterprises without demanding their privatization.
4) Canceling debts owed by Iraq that have resulted from the policies of the former regime.
5) Rejecting the reduction of spending on social services especially the elimination of government support for the food distribution system or the reduction of the number of items covered.
6) Strongly rejecting the privatization of publicly owned entities and especially of the oil, education, health, electricity, transportation and construction sectors.
7) Rejecting the increase in the price of petroleum products, considering the negative impact of the increase on the living standards of Iraqis.
8) Adopting a new labor law and a pension and social security law that assure workers' rights and are in conformity with international labor standards and human rights conventions. The World Bank and the IMF must also respect these standards .

The unions and federations that have signed this statement announce the formation of a permanent coordinating committee that will make its positions known to the Iraqi Government and to the IFIs. They also demand that the IFIs engage in dialogue, discussion and negotiations with the trade union federations regarding their policies in Iraq. Finally, they request the assistance of international trade union organizations to provide all possible support to the above-mentioned demands.

Signed by: General Federation of Iraqi Workers, Oil Unions Federation in Iraq / Basra, Federation of Workers Councils and Unions in Iraq, Kurdistan General Workers Syndicate Union / Erbil, Iraqi Kurdistan Workers Syndicate Union

An Australian government inquiry into alleged bribes paid by the Australian Wheat Board (AWB) to Saddam's regime during the sanctions period as regards large exports of wheat began today. If the inquiry concludes that there was bribery then this potential casts doubt also on the business practices prior to santions and hence on the legitimacy of the AWB debt claims from prior to August 1990.

January 14, 2006

The IMF Standby Agreement and associated documents, signed on 23 December, have now been published online here.

January 12, 2006

There is much to say about the reductions in fuel subsidies, one of the first results of the recently signed IMF Standby Agreement. For now, here are some annecdotal reports of price inflation from Iraqi blogger Riverbend.

January 04, 2006

Despite initial complaints, Iraq's larger commercial creditors agreed in Singapore last month to trade their Saddam-era debt for new bonds with a NPV of 20% that of the former debts. In general Jubilee Iraq considers this to be a reasonable deal and praises the Iraqi government and all those involved. As a whole the commercial loans were less odious than the politically-motivated government loans, although there are still specific cases in which certain commercial loans could fairly be judged illegitimate due to their connection to corruption or arms dealing. Hyundai, one of the largest commercial creditors said: "Of course it isn't satisfactory, but we have decided to honor the deal."

The securities, which will have a coupon of 5.8% per year, will start to trade on 19 January. Market participants think they'll find takers, especially since the notes will probably trade at a discount and thus yield 10% or so.

January 03, 2006

An article by Matthew Rothschild in The Progressive today: IMF Occupies Iraq, Riots Follow, extrats below:

"In December, the International Monetary Fund, in exchange for giving a loan of $685 million to the Iraqi government, insisted that the Iraqis lift subsidies on the price of oil and open the economy to more private investment. As the IMF said in a press release of December 23, the Iraqi government must be committed to “controlling the wage and pensions bill, reducing subsidies on petroleum products, and expanding the participation of the private sector in the domestic market for petroleum products." The impact of the IMF extortion was swift and brutal."

“Since the Dec. 15 parliamentary election, fuel prices have increased five-fold, mostly because the outgoing government of Prime Minister Ibrahim Jafari has cut subsidies as part of a debt-forgiveness deal it signed with the International Monetary Fund,” the Los Angeles Times reported on December 28. Iraqis are getting a nasty taste of the IMF’s medicine. “Over the summer, gas was selling for about five cents a gallon,” the LA Times noted. “Now it’s about 65 cents, and at the end of the price increases, gasoline will cost about the same in Iraq as it does in other countries in the Persian Gulf, about $1 per gallon. The prices of kerosene, diesel, and cooking gas have seen similar or steeper increases.” The price of public transportation has also gone up significantly."

Not surprisingly, these enormous price hikes have led to riots around the country, with police firing on 3,000 protesters in Nassiryeh, according to an account on Daily Kos, Iraq’s oil minister quit to protest the government’s capitulation to the IMF. According to Daily Kos, Oil Minister Ibrahim Bahr al-Uloum asked, “Is this how we repay the Iraq citizens who risked their lives to participate in the elections, by raising fuel prices in this way?” Ahmad Chalabi... replaced al-Uloum."

“This arrangement will underpin economic stability and help lay the foundation for an open and prosperous economy in Iraq,” said U.S. Treasury Secretary John Snow. What it is actually underpinning is economic instability. “It’s crazy, socially and politically,” Robert Mabro, former chairman of the Oxford Institute of Energy Studies, told the LA Times. Even the Pentagon’s “National Strategy for Victory in Iraq” recognized the need for “balancing the need for economic reform—particularly of bloated fuel and food subsidies—with political realities.”