G8 fails Iraqis on Saddam’s odious debt
PRESS RELEASE: 9th June 2004
Contact: Justin Alexander; justin@jubileeiraq.org; +4478 1313 7171

There has been intense speculation that the G8 summit will see a dramatic move on Saddam’s $120bn debt, but the G8 countries have not even put the issue on the official agenda. Their recent statements make it clear they are ignoring their guilt in financing Saddam and will instead use the debt to control Iraq economically.

Justin Alexander, Jubilee Iraq’s international coordinator says: “All of the G8 countries supported Saddam in the 1980s with sizable loans which they knew were financing the horrific war against Iran rather than benefiting the Iraqi people. It is deeply cynical for them to now debate how much Iraq will repay, the US which may be saying pay 10% (though in reality they are probably aiming for about 30%) and France which is saying pay 50% are both in the wrong. If the G8 really wants to demonstrate leadership they should admit that they were wrong to finance Saddam and write off their debt claims unconditionally.”

Yasar Mohamad Salman Hasan, the son of one of Iraq’s greatest economists (tortured by Saddam) says: “The G8 and Paris Club intend to use the debt as a lever to control Iraq’s economy. It is no secret that any debt ‘forgiveness’ will be conditional on Iraq following IMF economic policies and meeting their strict targets on privatisation and liberalisation. Instead the G8 should write off all their odious claims and give Iraqis the freedom and sovereignty to decide themselves which economic policies are best to tackle the desperate poverty, unemployment and reconstruction needs.”

These views are almost universally held in Iraq, including by the newly appointed finance minister Adil Mahdi who spoke out strongly when we first met with him back in October 2003. He recently told Reuters bluntly that he expects at least 90% debt cancellation and would tolerate no foreign interference in Iraq’s economic decision-making. The Central Bank governor Sinan Al-Shabibi, formerly a debt expert at UNCTAD in Geneva, was one of the founding supporters of Jubilee Iraq.

The likely outcome of the G8/Paris Club process is simply a 66% reduction dependent on Iraq meeting harsh economic conditionalities such as rapid privatisation and liberalisation. This would leave Iraq with at least $40bn of debt to pay, more than twice its annual export earnings. The creditors have no right to claim any payment of odious debt or impose such conditions, and should instead admit their guilt in financing Saddam and apologise to the Iraq people. Cancellation the small amounts of non-odious debt and dropping any UNCC reparation claims would be a small gesture of restitution from the creditors for the great crimes against Iraqis and Iranians which they willingly financed.

See the report “Paying for the Executioners Bullets: Iraqi views on debt” for more Iraqi quotes. Jubilee Iraq can provide contacts with for Iraqi economists to interview.