March 20, 2006

US-based group Voices for Creative Nonviolence has completed a 34 day fast in Washington DC, involving direct actions such as disrupting the House Appropriations Committee hearing on Iraq funding. Their "Winter of Our Discontent" campaign calls for:

1) An immediate end to the U.S. occupation of Iraq;
2) Full funding of the reconstruction of Iraq by the U.S.;
3) Cancellation of the odious debt incurred by Saddam Hussein's regime, without any International Monetary Fund conditions; (their flyer on debt)
4) Cancellation of the war reparations charges imposed against Iraq by the U.N. for Hussein's invasion and occupation of Kuwait in 1990-91.

March 04, 2006

An excellent article by Corp Watch delves into the kickback scandal surround the Australian Wheat Board (AWB) and shows how it used inflated prices agreed with the Iraqi regime to also pay off an $8m debt to Tigris Petroleum, a partner of the giant oil and minding company BHP.

The Australian Wheat Board was the largest supplier of food to Iraq both before the invasion of Kuwait and during the period of sanctions. The Cole Inquiry (also see wikipedia article), which is investigating allegations that its activities included large bribes and kickbacks to the regime, has uncovered evidence of its involvement in trying to recover $8m of debt on behalf of the company BHP.

March 03, 2006

Iraq announced today that $18.4bn of commercial claims have been settled over the past eight months. The terms of Iraq's settlement offer to commercial claimants were announced on July 26, 2005. Under those terms, claimants holding an aggregate amount of claims (as of August 6, 1990) of $35 million or less (or its equivalent in other currencies) were eligible to receive a cash buyback offer at a purchase price of 10.25% of the current value of the claims (principal plus calculated interest).

Holders with aggregate claims above this $35 million threshold were eligible to receive a debt-for-debt exchange offer in which each $100 face amount of an existing claim would be exchanged for $20 face amount of a new Iraqi bond. Those bonds are payable over a 23-year period and bear a fixed interest rate of 5.8%. Large claimants were also given an option to exchange existing claims for an interest in a multicurrency loan agreement, but few elected to do so, according to the Ernst & Young Iraq Debt Reconciliation Office.

Iraq has closed three installments of its cash buyback offer (the most recent installment closed on March 30) and has concluded a debt-for-debt exchange offer. To date, the following have occurred:

* 10,247 individual Saddam-era commercial claims have been cancelled;
* An additional 825 claims have been submitted to a binding arbitration process being conducted by a panel of independent arbitrators. If the claimant receives an arbitral award, the claim will be retired on the same terms as all other claims in the program. Iraq expects this to happen by early July;
* 456 commercial claimants have participated in the program;
* The aggregate amount of commercial claims retired through this program exceeds $18.4 billion; and
* The holders of more than 96% (by value) of the eligible claims that received invitations to settle their Saddam-era claims agreed to do so.

"Despite the enormous difficulties currently facing our country," Iraq's Minister of Finance Ali A. Allawi said, "Iraq has retired more debt in less time than ever before in the history of sovereign finance. The mountainous stock of debts accumulated by the Saddam regime is quickly being reduced to a manageable size. The remnants of that debt stock will not inhibit Iraq's ability to attract the investment needed to finance the country's economic reconstruction. This was, from the outset, the primary objective of the Government's debt management program."