1. Facts > 2. Politics > 3. Action
Sources: Ministry of Foreign Affairs | Russia Journal | Pravda | Moscow Times

1. Facts

• Debt: $8-16bn, Reparations: $2bn, Contracts: $40bn ???

2. Politics

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• Vladimir Putin: In a press conference with Tony Blair he said "We also spoke about Iraq's debts. The position of Russia is well known. We are ready to discuss this problem. Of course, in the framework of the Paris Club, of which Russia is a full-fledged member." (29th April) Russia is ready to consider forgive some of the $8-12bn of Saddam's debt it holds. "On the whole the proposal is understandable and legitimate. In any event, Russia has no objection to such a proposal. I believe that we could begin to discuss the principles of this issue at the G8 summit in Evian. In any case, we are ready to do so...We are ready to examine this issue, but there is a specific procedure in accordance with the World Bank and the International Monetary Fund. It involves talks conducted within the context of the Paris Club." - 11th April

• Igor Ivanov (Foreign Minister) told the Wall St Journal that the issue of debt was an important question and that Russia would "do its part" to help Iraq. "We will work with the Paris Club and the international community on Iraqi debt reduction, not alone, not on a bilateral basis, but yes, we will cooperate"; this may represent a softening of the Russian position, but note Karaganov comment (below) on the same day. (23 June)
• Sergei Karaganov (Head of Foreign and Defence Policy Council): "We have our interests to protect, the most important of which are economic: recovery of Iraqi debts owed to Russia" (23 June). Previously he told Pravda that Moscow would have difficulties receiving debt payments from Iraq - 9th April
• Alexei Kudrin (Finance Minister & Deputy Prime Minister): Russia is going to defend its interests Kudrin told a conference for investors organised by Renaissance Capital Group. Iraq is not among the poorest countries, and this position is the basis for determining the scheme of debt restructuring that can be applied to Iraq. (2nd June) ''There will be big debate on the issue, and I do not rule out that a decision will be made to reschedule part of Iraq's debt and write off another part... Iraq must be given a grace period in repaying its debt because postwar reconstruction there is an urgent need,'' however, he added that Russia was against a ''complete write-off.'' (29th April) Previously he had said that Russia will not forgive Iraq's debt until Russia's own Soviet debts are written off. "No one has forgiven Russia's debt, regardless of what kind of regime it was and regardless of the country's clout. For this reason, international law and our membership of the Paris Club of creditor nations will allow us to press for the repayment of our loans. We are acting on the basis of the same rules here: we are doing what is being done to us." - 12th April
• Alexander Shokhin (head of the finance and credit committee of the lower house of parliament) suggested that Iraq's debt to Russia could be reduced by 80%. - 26th (?) April
• Alexander Losyukov (Deputy Foreign Minister): Russia does not plan to negotiate the cancellation of Iraq’s debts with the US. No official proposals regarding debt cancellations have been made, however, there could be negotiations on the issue with Iraq’s legal authorities, but not with the U.S. Russia is ready to resolve the issue within the framework of international law, for example using the mechanism of the Paris club of creditors or special international conferences. - 23rd April
• Andrei Zagorskii (Deputy director of Moscow's Institute for Applied International Studies): "Receiving even part of (the debt) would be a plus for Russia because no one expected Saddam Hussein would repay the money. The debt has been a dead weight all these years." - 15th April.
• Unnamed Trade official: Told Interfax news agency that Russia will discuss restructuring debt if Russian contracts in Iraq are respected. "These conditions imply the participation of Russian companies in the economic reconstruction of Iraq, the return of Russian companies to large projects in Iraq, primarily in oil and gas fields, and promises to discuss prospects for trade and economic cooperation." Moscow believes the debt should be discussed by all the creditors, "but bilateral consultations with the new administration of Iraq are not excluded at the initial phase." - 14th April
• Andrei Illarionov (an economic adviser to Putin) told Reuters that no country is seriously talking about writing off Iraq's debt. "I haven't heard anybody seriously discussing the possibility of writing the Iraqi debt off. The Paris Club is not about writing off, it's not about reduction. It's about how particular countries can and should service their debt and different mechanisms can be used to persuade a country's creditors to do it in a timely and appropriate manner. It is very well known that Iraq is not a less developed country so that the procedures [e.g. 'Cologne terms' 90% write off - JI] that would be applied to a lesser developed country can hardly be applied to Iraq" he said. Russia itself went to the Paris Club of creditors after its economic collapse in 1998, but only received a rescheduled over 19 years period with two years of grace. - 12th April
• Sergei Yastrzhembsky (Putin's media aide) said Russia would not forgive the Iraqi debt: "(Washington) should not be so generous at other people's expense." - 12th April
• Dmitry Rogozin (Head of Duma committee on international affairs): Wolfowitz's statement "most probably was a careless rather than a well-thought idea." Forgiving Iraqi debts lacked common sense and would never be accepted. The US should repay Russia the $8.5 billion of Iraqi debt and also about $2 billion for losses which Russian companies incurred due to the war. - 11th April
• Yevgeny Primakov (Chairman of Chamber of Commerce and Industry): Any new leadership of Iraq should assume all the obligations of the former government. To him, the question of the Iraqi foreign debts should not be reduced to the Iraqi government's "increasing the debts through only arms purchases." In recent years Iraq had been engaged in large-scale civil engineering, which the country needed so much. "Debts are to be paid. This is what Russia is doing, having assumed the debt burden of the former Soviet Union." - 11th April
• Gennady Seleznyov (Speaker for the lower house of parliament): Criticized the US call for debt forgiveness, saying it was up to Iraq, not the United States, to negotiate its obligations. "Iraq is not the 51st state of America. All debt issues will be resolved only with the lawful government of Iraq." - 11th April
• Alexei Ulyukaev (Deputy Finance Minister): "The problem of Iraqi debt is a subject for international, multilateral talks which should take into account Iraq's real economic potential... In a nutshell, it is necessary to ensure Iraq fulfils the obligations it took upon itself." - 11th April
• Igor Ivanov (Foreign Minister): “Our priority is to protect our lawful interests”, referring to Saddam’s debts - 29th March (Dow Jones).

3. Action - Write to Alexei Kudrin.

• Agree with him that it was unjust that Russia's Soviet debts were not cancelled.
• However tell him that Russia is a just country, and should treat Iraq with justice and in line with the long friendship between the two peoples by writing off Saddam's illegitimate debts.
• Doing this would fit the "doctrine of Odious Debts" which was developed by a Russian, Alexander Sachs in the 1920s. Sachs argues that “If a despotic power incurs a debt not for the needs or in the interest of the State, but to strengthen its despotic regime, to repress the population that fights against it... This debt is not an obligation for the nation; it is a regime's debt, a personal debt.”
• By doing so Russia will help set a precedent which may lead, in due course, to the canceling of it's own illegitimate debts from the Soviet period.
• Ask the government to publicly commit to writing off all debt and reparation claims on Iraq.
• Ask him to negotiate within the Paris Club cartel of creditors to ensure multilateral cancellation of all Saddam's debts.

General advice on writing to politicians.

You could also write to:

• Vladimir Putin who has said that the proposal to write off Saddam's debts "is understandable and legitimate" (11th April). Welcome that comment and urge him to press for full and unconditional cancellation within the Paris Club. At his press conference with Tony Blair on 29th April he said "The Iraqi people have a full right to determine their destiny themselves and without outside pressure." (29th April) Therefore ask him Mr.Putin to oppose the "outside pressure" of the Paris Club in demanding debt which will hinder the Iraqi people from "determining their destiny".
• Dmitry Rogozin (the Head of Duma committee on international affairs). He has said that the proposal to forgive Iraq's debts lacks common sense and will never be accepted. (11th April)
• Alexei Ulyukaev (Deputy Finance Minister) has said "It is necessary to ensure Iraq fulfils the obligations it took upon itself." (11th April). Explain that it was Saddam, not the Iraqi people, who took those financial obligations (debts) upon himself, and they should not be forced to pay on his behalf.