|
|
 |
| |
| December 16, 2003 |
| |
| France, Russia May Forgive Iraq's Debt |
WASHINGTON - December 16, 2003. France and Russia said Monday they may write off or restructure part of Iraq's estimated 120-billion-dollar debt, in a move that could significantly smooth prickly relations with the United States, reports Le Figaro (France) and Agence France Presse.
French Foreign Minister Dominique de Villepin said after meeting a
delegation from the US-installed interim Iraqi Governing Council that a
form of debt relief could be worked out within the Paris Club, an organization of 19 industrialized countries which orchestrates sovereign debt negotiations. "France believes an agreement could take effect from
2004, if the conditions are right, within the framework of the Paris Club
and in liaison with other creditors," de Villepin told journalists.
"France could then envisage debt cancellations that are appropriate and
compatible with Iraq's financing capability," he said. At virtually the
same time in Moscow, Russian Deputy Foreign Minister, Yury Fedotov, was
telling the Interfax news agency that his country was also willing to
consider restructuring Iraq's debt.
Les Echos (France) explains that Villepin wanted to give Iraqi leaders in
Paris a clear political signal. Paris agrees to the idea of a partial debt
cancellation but on clear conditions: there will have to be a consensus
within the Paris Club to erase the debt, and this will only be given to a
fully sovereign Iraqi State.
The Associated Press notes that De Villepin insisted that France's
willingness to forgive Iraqi debts was unrelated to the tussle over
contracts, saying, "let's not mix up the different subjects." He
acknowledged that there was a "quarrel" over the issue of contracts, and
said that France and other nations are examining the breadth of the
American decision.
Meanwhile, Liberation (France) writes that if U.S. President Bush wants to
get the Iraqi economy going before the US November 2004 elections he will
have to find an Iraqi government that is able to draft a budget for 2005.
The uncertainty regarding the debt accumulated under Saddam Hussein
(estimated at $120 billion) is a serious obstacle to this. Servicing this
debt and financing the reconstruction could be too much of a burden, the
report says. Furthermore, the World Bank will be unable to start serious
lending to Iraq until this problem is solved. The emergency is even
greater for Bush as the pledges made in Madrid are not being fulfilled
yet. Three billion dollars had been promised for immediate aid, but until
now, the World Bank has only seen $685 million for 2004.
In another piece, Liberation (France) explains that Iraq's creditors are
willing to restructure the debt, but that reducing it is another story.
Indeed, the Paris Club usually accepts to reduce the debt of only the
poorest countries. With its oil revenues, Iraq is hardly that, even if the legacy of dictatorship, embargo, and war has created great economic
difficulties.
BBC online reports that a top US envoy is due to begin a series of talks
in Europe with Iraq's major creditors on restructuring $120 billion debts
built up under Saddam Hussein. James Baker's first meeting begins in Paris
with French President Jacques Chirac on Tuesday. Later this week, Baker
will also be meeting heads of government in Germany, Russia, Italy and
Britain. The US believes the reconstruction of Iraq will be unaffordable unless there is debt relief on a massive scale. But some creditors query whether Iraq needs favored treatment given its vast oil wealth.
Reuters meanwhile notes that US President George W. Bush on Monday stood
by a decision to bar war opponents from getting $18.6 billion in US-funded
contracts to rebuild Iraq as the Pentagon again delayed a bidding
conference for the lucrative work. The Pentagon said a bidding conference,
which had been set for Friday near Washington D.C. after previous delays,
would now be held early in January but stressed this was not related to
the controversy over limiting the competition.
Sweden's foreign aid Agency said Monday that it wants to double the amount
of money it provides to Iraq to between 300 million kronor and 400 million
kronor by 2006, AP reports. The proposal, which was revealed Monday, came after weeks of discussion and wasn't related to Saturday's capture of
ousted dictator Saddam Hussein, the agency, or SIDA, said in a statement.
Therefore Sweden's aid will mainly be channeled through the World Bank and
the various UN agencies, which have set up specific funds whereby Iraqi
authorities are given a clear and prominent role.
In another piece, Reuters reports that with the capture of Saddam Hussein,
the US hopes the UN Security Council on Tuesday gives its support to
American plans to hand over power to Iraqis and rebuild the country.
Iraq's Foreign Minister, Hoshyar Zebari, is expected to present the
timetable that the Iraqi Governing Council and the US-led coalition
devised for a handover of power to a provisional government in June and
general elections by the end of 2005.
The Oil Daily notes that the images of a captured and bedraggled Saddam
Hussein may have triggered dancing in the streets of Baghdad and in the
corridors of power in Washington, DC, but the uphill climb to restore
Iraq's oil industry to its prewar luster after decades of bloody battles
is not over, experts say. Oil markets and oil companies are far more
anxious about Iraq's future leaders than they are about leaders of the
past when it comes to investing their money to help the country realize
its long-held dream to boost capacity to 6 million barrels per day and
beyond.
Dow Jones adds that the attacks on Iraq's oil facilities-more than 80
since June, according to Iraqi Oil Minister Ibrahim Bahr al-Uloum, have an
economic orientation as they hit the country in the pocketbook. The
sabotage, which has mainly targeted the northern pipeline network that
carries crude oil to Turkey for export, has limited shipments and is
costing Iraq $7 million a day in revenues from forgone oil sales-money
that is desperately needed for reconstruction.
In other news, The Washington Post reports that the Bush administration is
scrambling to negotiate a compromise with Iraq's two main religious
strains in an effort to keep alive its plan to transfer political power to
a new Iraqi provisional government in less than seven months, according to
senior US and Iraqi officials. The compromises would be aimed at
satisfying Iraq's most influential Shiite Muslim leader, Grand Ayatollah
Ali Sistani, who has rejected a US plan to choose an Iraqi government
through regional caucuses and insisted that popular elections are the only
legitimate method of selection.
The Financial Times writes in an editorial that Iraq [and its debt] should be handled as a one-off case. The reparations chapter clearly must be
closed. In addition, loans extended to Saddam during the 1980-88 Iran-Iraq
war should largely be written off. The emirs and kings of the Gulf knew
well they were in effect hiring the Iraqi army to protect themselves
against the theocrats of Tehran. Western nations that financed and armed
Baghdad in those years should also have their loans reviewed under similar
criteria. These were not just commercial loans. Even the remaining debt will need to be rescheduled and reduced in value if Iraq is to recover its prosperity and its creditworthiness. That surely must be the overriding goal of everybody's approach towards Iraqi debt relief.
In another editorial, the Washington Post writes that the trial of Saddam
Hussein could deliver an enormous boost to Iraq's reconstruction. It could
air in meticulous detail the record of his atrocities, provide millions of
his victims and their relatives a measure of justice and allow Iraq's new
authorities to demonstrate their commitment to human rights and the rule
of law. It also could be a destabilizing disaster. If, as one member of the Iraqi Governing Council suggested yesterday, the trial is rushed into the courtroom in weeks, or if Saddam Hussein, like former Yugoslav warlord Slobodan Milosevic, manages to use his tribunal as a platform for rallying his diehard supporters, the United States and its allies could find
themselves worse off than when the dictator was hiding in his hole. In
detention but very much alive, Saddam Hussein remains a danger. He must be
handled and prosecuted in a way that balances the needs of Iraqi and
foreign victims, the promotion of a new political order, and international
standards of justice, says the editorial.
Philip Gordon, a senior fellow in Foreign Policy Studies at the Brookings
Institution, writes in another op-ed in The Financial Times that with the
arrival today in Paris of James Baker, former US secretary of state, on a
mission to get help to relieve some of Iraq's crushing debt burden, now
would seem an ideal time for Bush to reach out to Europe and try to bring
new countries into the coalition. Unfortunately, there is little sign that
Washington recognizes a new approach is needed. Indeed, the optimism this
week that Hussein's arrest would be a turning point in Iraq's
nation-building process may well make the Bush administration more
confident that it needs no more help to stabilize Iraq. Certainly, last
Monday's Pentagon directive excluding companies from anti-war countries
from bidding for primary contracts in Iraq's reconstruction suggests that
large parts of the US government, at least, still do not get it, Gordon
writes.
Source: The World Bank
|
| |
| |
| |
|
