From Jubilee Iraq
The next month is going to be the most critical period so far in the negations on Saddam’s debts. There are G7, World Bank & IMF, Paris Club and Donor Conference meetings coming up (see calendar below), all happening under the shadow of forthcoming US elections and the G8’s stated deadline of a Paris Club deal on debt by the end of 2004 (before Iraqi elections). Jubilee Iraq representatives will be in Washington from next Thursday for five days to lobby as the G7 and IMF meet (contact us there on 00447813137171).
While the US government and the Interim Iraqi government have spoken strongly for near-total debt cancellation, we are afraid that a compromise will be reached with creditors at only about 70% reduction, potentially leaving $40bn or more debt and requiring at least $2bn debt service next year. Furthermore this reduction will be processed through the Paris Club over a long period, requiring Iraq to obey the dictates of the IMF for many years (which, whether good or bad, will erode Iraq’s sovereignty) in order to receive this partial debt cancellation. Instead we continue to call for immediate and unconditional cancellation of all the odious debt, with a fair process of arbitration to settle any disputes with creditors who insist that their loans actually benefited Iraqis.
At this critical time please continue to lobby your politicians, demanding that Iraq be treated justly so that it will no longer be shackled by old loans which financed Saddam’s war machine. We must not forget either that the war reparations against Iraq continue to grow. On 23rd September the UNCC awarded $377m reparations, bringing Iraq’s total unpaid burden to $30.3bn so far. These reparations, particularly the majority which is to governments and companies, must be annulled because the suffering Iraqi people are not responsible for Saddam’s crimes.
This update is dedicated to Mohammed “Ghareeb” Hussein Ramadan, a dear friend and passionate advocate for Jubilee Iraq who was killed in August while delivering medical aid to Najaf. Like so many good people he made the ultimate sacrifice, and in his memory we redouble our efforts to work for a peaceful and prosperous Iraq.
The Interim Government has put significant energy into debt negotiations, with President Al-Yawar visiting Germany, a delegation visiting the Gulf and Interim Prime Minister Allawi writing: “The vast majority is odious debt, used to build up the war machine of the ousted regime, largely through arms purchases supported by the lending countries. The innocent people of Iraq cannot be expected to bear this crushing burden; the vast majority of the debt must be forgiven if Iraq is to have a chance. Despite vague statements of good intentions, however, concrete pledges of debt forgiveness have not yet been forthcoming.” As regards the reparations, a statement from the interim government said "In addressing this problem, the government will proceed from the premise that the Iraqi people must not bear responsibility and the consequences of the former regime's wars."
IMF: John Taylor said he hopes an IMF program can be finalised by the end of September, which means that a formal signing is likely at the IMF Autumn Meeting.
France, Germany and Russia have regularly been regularly quoted as supporting only 50% debt reduction, but an unnamed official said Germany may move to 66%. After a visit of Interim Foreign Minister Zebari to Russia, an Iraq-Russian committee was agreed to assess the Saddam-era contracts, which Russia is demanding be respected as a condition for even this minimal debt reduction. Russia also seems to have revised it’s claim upwards to $8.9bn from the $3.4bn (ex-interest) figure quote to the Paris Club in July 2003.
Japan: Richard Armitage thinks they will be “generous” but Japanese companies are lobbying the government: “We want to collect as much as possible” (Mikio Sasaki, chairman of Mitsubishi).
Jordan is proposing a reduction of debt “in exchange for taking part in the reconstruction”, the details are unclear.
Iran has been more vocal in claiming reparations recently, particularly in response to Saddam’s trial. General Ali-Reza Afshar said that the Iranian Army has compiled a 1500-page report and because if Saddam was found guilty of crimes against Iran, Iraq would have to pay reparations
In an unexpected response to a question in a house subcommittee, Deputy Secretary State Richard Armitage has said that the Gulf funds were grants not loans provided to Saddam during the Iran war. Jubilee Iraq and most Iraqis have long asserted this, and even if these funds have been structured as loans they would have been 100% odious.
Calendar of important dates:
end September IMF-Iraq agreement predicted by Under Secretary John Taylor
1 October G7 finance ministers, Washington
2-3 October IMF/World Bank Autumn meetings, Washington
12 October Paris Club monthly meeting – possible date for an agreement
14-15 October Donor conference in Tokyo
21 October Next scheduled payment of UNCC reparations
2 November US elections
mid November Paris Club monthly meeting
7-9 December 54th meeting of UNCC – Jubilee Iraq will be protesting as usual
mid December Paris Club monthly meeting – last opportunity for debt agreement within declared G8 schedule
January Iraqi elections scheduled
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