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| Iraq wins pledges for 60% reduction in debt |
| 2004-02-29 |
| In combination with the recently announced production rates, substantially higher than expected, this is welcome news for Iraqi finances. ABU DHABI: Iraq said yesterday it had won initial assurances for a 60 per cent cut in the $120 billion it owes and urged the world community to back its recovery with $4 billion in funding for key projects over the next 12 months."In principle, we have a 60pc reduction in our debts," Iraqi Planning Minister Mehdi Al Hafedh told reporters at an Abu Dhabi meeting of donor countries that had pledged last year around $15 billion for the country’s reconstruction.One Western official close to the Iraq debt talks said Al Hafedh’s assessment of donor response may have been "too rosy." However, Al Hafedh said that creditor countries had indicated willingness to reduce the debt by 60pc, even though they had not yet committed themselves or taken any action to wipe out the obligations. Iraq’s debt burden has been the subject of sustained lobbying by the US. France, Britain, Germany and Japan all promised a "substantial" cut in debt to Iraq, which is trying to reach a debt reduction deal before a moratorium on payments runs out at the end of the year. Russia, owed $8 billion in principal and interest, has said it was willing to forgive two-thirds of the amount as long as the cut comes within the framework of the Paris Club of mainly Western creditor nations. Paris Club officials recently said no debt deal can be finalised until there is an internationally recognised leadership in Iraq that can sign legal debt relief papers. No one was available at the Paris Club yesterday to comment on Al Hafedh’s remarks. Several Gulf countries, who are not members of the Paris Club and are owed about $45 billion, have said they would consider either a write-off or reduction after an Iraqi government takes power. Some want to tie this up with their little strings, but if they don’t cooperate, they may find themselves holding nothing and Iraq a resurgent major oil producer -- outside of cartel control. Now, wouldn’t that be lovely? |
| Posted by:.com |
| #2 Looks like James Baker had some, well, interesting things in that briefcase of his... |
| Posted by: Raj 2004-2-29 11:59:08 AM |
| #1 The UN can pay the rest of the debt with the money they skimmed out of Oil for Food. |
| Posted by: Anonymous 2004-2-29 9:37:17 AM |