Introduction
During the long years of Saddam Hussein’s rule in Iraq, economic data were treated as top national secrets, and the revelation of such data to unauthorized persons could bring the death penalty. Therefore, it was only after the fall of the regime that the extent of Iraq’s enormous sovereign debt, estimated at the time in excess of $120 billion, was to become a public record.
After the invasion of Iraq in April 2003, it became evident that the country’s economic and social development could not be initiated with so much external debt overhang, and the issue was taken up by the Paris Club.
At the September 2003 meeting in Dubai of the G-7, the finance ministers [1] called on the Paris Club “to make its best effort to complete the restructuring of Iraq’s debt before the end of 2004.” According to U.S. figures, Iraq owed Paris Club members approximately $40 billion. Of this amount, $21 billion was principal and $19 billion was interest. The IMF estimated Iraqi debt held by non-Paris club governments – primarily the oil-rich Arab countries in the Persian Gulf – at $60 billion to $65 billion, and debt to commercial creditors at roughly $15 billion. [2]
The Paris Club Tackles the Iraqi Debt
The Paris Club is an informal group of financial officials from 19 of the world’s richest countries, which provides indebted countries and their creditors such financial services as debt restructuring, debt relief, and debt cancellation. Debtors are often recommended by the International Monetary Fund after alternative solutions have failed. [3]
At its meeting on November 21, 2004, the Paris Club recommended a three-stage plan to reduce debt owned by Iraq by 80%. The first stage was to immediately cancel 30% of debt owned by Iraq to each Paris Club country. The second stage was to start the implementation of an IMF program following which another 30% would be cancelled. The remaining 20% of the initial stock would be abdicated upon completion of the last IMF program. [4] Most creditor countries, including the U.S., the U.K., France, China, and Russia, have adopted the recommendation, in full or in part. The oil-rich Arab Gulf countries have been the exception, despite many promises to the contrary.
Most recent data from the U.S. Department of State indicate that over the past three years, Iraq’s debt has been reduced by $66.5 billion. With the participation of all members, the Paris Club cancelled a total of $42.3 billion. The U.S. cancelled 100% of Iraq’s debt of $4.1 billion. Other Paris Club members agreed to cancel 80% of Iraq’s debt. A number of non-Paris Club members have cancelled a total of $8.2 billion, on Paris Club terms.
Iraq’s Failed Attempts to Resolve Debt Issue with Gulf Countries
The Iraqi Finance Ministry has sent several messages to the Arab countries, notably Kuwait and Saudi Arabia, confirming Baghdad’s readiness to hold talks to settle the Iraqi debt. However, Finance Ministry director-general finance Muhammad Al-Hariri has noted bitterly, “We were expecting, for some time, that these states would resolve the issue and follow the path of several other countries around the world that have cancelled the debt due them from Iraq, but the Arab countries have remained bystanders.” He added that the attitude of the Gulf states is “politically motivated, because some of these countries do not recognize the new changes in Iraq.”
The Iraqi daily Al-Da’wa, issued by Prime Minister Nuri Al-Maliki’s political party of the same name, has been far more explicit in its criticism of the Gulf countries for their refusal to cancel Iraqi debts. In an article entitled “Iraq Is Not Obliged to Pay Odious Debts,” Rassim Qassim writes that most of the debts accrued by Iraq were “the result of actions by the previous dictatorial and unconstitutional regime, and they are primarily in the form of damages sustained by countries during the invasion and occupation of Kuwait or the result of wars and crises that led to the isolation that regime…” When that regime fell, writes Qassim, “it was assumed that countries which had opposed the previous regime and its programs would drop the odious [illegitimate] debt, and they are now asking the suffering Iraqi people to bear the responsibility of the actions of the despot [Saddam Hussein.]“
Qassim goes on to say that “the new Iraq – with its elected constitutional government and its democratic institutions – is not obliged to pay these debts and it is not obliged to acknowledge them… The civilized world and, specifically, Europe, has responded to the Paris Club, which cancelled 80% of the odious debts, and the European Union is trying to cancel the rest and open a new page with emerging Iraq. The international community has begun to view Iraq in a different perspective – as the sole country in the region that enjoys democratic, multi-party and constitutional parliament.”
After underscoring Iraq’s great economic potential, the author warns of “the impediments being placed on it by countries which have regimes that are incompatible with democratic orientation and which insist on retaining the false debts that were imposed on Iraq.” He concludes by calling on the Gulf countries to reexamine their calculations and to keep in mind that “causing harm to Iraq would not endure, and what goes around comes around.” [5]
Reflecting the same views, Hilal al-Ta’aan writes in the Iraqi government daily Al-Sabah that most of the loans given to Iraq by foreign and Gulf countries were made with the certitude that they had a military objective – to arm Iraq and support its war against Iran. [6]
The Doctrine of Odious Debts
The two articles echo the doctrine of “odious debts.” Proponents of the doctrine asset that some of Iraq’s debt could potentially be classified as non-legitimate under international law, since they were undertaken during the Hussein regime and that international law should be able to expunge these debts. Patricia Adams, who is associated with Probe International, a Toronto-based organization devoted to the issue of “odious debts,” quotes Russian legal scholar Alexander Sack, who, in 1927, defined the Doctrine of Odious Debts, as follows:
If a despotic power incurs a debt not for the needs or in the interest of the State, but to strengthen its despotic regime… this debt is odious…. This debt is not an obligation for the nation; it is a regime’s debt, a personal debt of the power that has incurred it, consequently it falls with the fall of this power. [7]
Reparations as Debt
Apart from the external debt, there is the issue of reparations to Kuwait and, to a lesser extent, to Saudi Arabia, stemming from the occupation of Kuwait by Iraq, the looting of the country and setting fire to its oil fields.
Following the occupation of Kuwait, the United Nations imposed sanctions against the Iraqi regime. Security Council Resolution 661, of 1990, prohibited all nations from buying Iraqi oil and from selling Iraq any commodities except food or medicines. Under the same resolution, the United Nations Compensation Commission (UNCC) was established as a subsidiary organ of the Security Council to process claims and pay compensation for losses and damage suffered as a direct result of Iraq’s 1990-1991 invasion and occupation of Kuwait. Initially, 30% of revenues from the sale of Iraqi oil was to be channeled through the UNCC; that proportion was later reduced to 5%, and it has remained at that level, but with a larger revenue base. The Commission receives about $220 million a month.
There were approximately 2.7 million claims submitted, for a total of over $350 billion. Of these claims, 1.54 million (57%) resulted in some sort of award. The total approved by the UNCC was $52 billion. In March of this year, the UNCC paid out $972.4 million, bringing the total to $24.4 billion. Kuwaiti companies and state entities received the lion’s share of the latest round of compensation, amounting to $725.1 million, followed by Saudi Arabia with $148 million, the U.S. ($76 million) and Turkey ($23.3 million). Another $28 billion remains to be paid to settle all outstanding claims.
The Commission has adopted a policy of paying individuals first, with the result that the remaining sum is owed to government entities (including state oil companies) of Kuwait and Saudi Arabia.
Kuwait, which has received nearly $14 billion from the UNCC, is still owed about $27 billion, or almost all of the remaining outstanding compensation of $28 billion, to be paid by Iraq through the UNCC.
Conclusion
There is no doubt that Kuwait suffered enormously as a result of its occupation by Iraq and the brutal administration, established by Saddam Hussein, that followed. The country was systematically looted, many of its citizens were murdered or taken as prisoners to Iraq without leaving a trace. Reparations were justified. But how much reparations should be assessed, and collected, should be negotiated in a spirit of generosity as befit two neighborly Arab countries that must live side by side for a long time.
The issue of debt is of an entirely different genre, because loans extended to the Iraqi regime during the Iraq-Iran war were equally beneficial to lender and borrower alike, and this factor should be kept in perspective as the parties seek to bring the issue to a close. A strong and prosperous Arab Iraq may serve again as a dam against a raging Persian tide that threatens to sweep the Middle East in its wake. And this factor, above everything else, could only be ignored by the debtor nations at their own peril.
[1] The G7 (Group of 7) countries are: The United States, Japan, Canada, Germany, the United Kingdom, France and Italy. Russia joined the group, which has now become the G8. All G8 members belong to the Paris Club.
[2] Congressional Research Service, CRS Report to Congress, Order Code RS21765, updated January 19, 2005.
[3] The permanent member-nations of the club are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, Norway, Russia, Spain, Sweden, Switzerland, the United Kingdom and the United states.
[4] Iraq, Paris club Press Release, (Paris), 21 November 2004.
[5] Al-Da’wa (Baghdad), May 11, 2008.
[6] Al-Sabah (Iraq), May 11, 2008.
[7] www.odiousdebts.org/odiousdebts/index.cfm?DSP=content&ContentID=7759 (posted June 26, 2003).
Mary Jo’s Mother: “I don’t think he ever said he was sorry” And Other Teddy Kennedy Realities
May 20, 2008
Senator Edward ‘Ted’ Kennedy has been sitting up, chatting to Barack Obama by phone, and following the Boston Red Sox baseball team on television. That has not stopped America going on deathwatch. Since Kennedy was airlifted to hospital from the fabled ‘family compound’ on Martha’s Vineyard, the nation has been gripped as if waiting for the passing of the crown.
The Senator from Massachusetts is the man who brought disgrace to America’s Camelot, and then managed, somehow, to restore its glow.
At 76, it is remarkable that the youngest of the four brothers of the Kennedy generation which gave us John Fitzgerald as President and Robert as Attorney General is alive at all (Patrick, the eldest, died serving in World War Two). Ted (above, centre) has boozed, womanised and scandalised to a degree which would have surely killed a lesser man.
Yet he is suddenly beloved, or at least almost. White-haired and with his face, long ruined by drink, become avuncular, he seems like Father Christmas. He reminds America of long ago when government distributed gifts of hope. He was among the very few to vote against Dubya Bush’s folly in Iraq, and that alone seems worthy of a place at the Round Table.
But Kennedy the man can never be redeemed. The ‘Chappaquiddick Incident’ of 1969, most infamous of his scandals, leaves too deep a stain. He was drunk when he persuaded Mary Jo Kopechne to get into the back seat of his car, which he then drove off a narrow bridge. He swam ashore, leaving her to drown. He baulked at reporting the accident for nine hours: divers could have saved her if he had called for help.
He lied and covered up and got away with it only because of the Kennedy power in Massachusetts. Mary Jo’s mother said: “I don’t think he ever said he was sorry.” He has no morals, no decency.
The veteran senator is the only Kennedy who lived long enough to be found out. All three, sons of bootlegging family patriarch Joe, were born to ruthlessness, arrogance and a self-entitlement to any woman they wanted. Only the reticence of the times saved both older brothers from the consequences of their boorish use of Marilyn Monroe. Robert visited her bungalow on the night she died, and that is one step short of Chappaquiddick.
Oddly, it is reprobate Edward who has shown inclination to legislate for the common good. It is that which has propped up Camelot despite 40 years of revelations. JFK couldn’t be bothered with Civil Rights because he didn’t need black votes. Robert took on his father’s Mob buddies to bury the family legacy and opposed Vietnam when his brother’s war proved unpopular.
Ted’s role as national uncle came with the final Kennedy tragedy, the death of JFK’s son John in a plane crash redolent of the family hubris. He was the little boy saluting his father’s coffin in 1963 and was the heir to the myth of Camelot.
The media wanted to turn John Junior’s death into a schmaltz-fest but the Senator managed to fend off the tide of sentimentality and maintain the dignity of family and nation. For all his sins, when the last of the Kennedy Boys does die, it will be the end of an era.
Adolph Hitler, Iran, Obama And ‘…the advent of the Democrats will benefit Hamas, Syria and Iran.’
May 20, 2008
Notwithstanding the idea that Hitler was not unreasonable, there are other more considered (read: intelligent) voices out there.
Will Ellsworth-Jones in the The First Post:
In Nicholson Baker’s disturbing new book, Human Smoke, which questions whether World War II could have been avoided, he quotes approvingly a pacifist speech Albert Einstein gave in New York in 1930: “If only two per cent of the men liable for war service were to refuse,” Einstein said, “there would not be enough jails in the world to take care of them.”
But after Hitler came to power in Germany, Einstein was asked to speak on behalf of two conscientious objectors awaiting trial in Belgium. He declined, saying “were I a Belgian I should not, in the present circumstances, refuse military service; rather I should enter service cheerfully in the belief that I would hereby be helping to save European civilisation.”
Hitler is undoubtedly the ultimate test of a pacifist. His arrival on the scene caused many of those who had pledged themselves to peace in the 1930s to melt away “like an early morning mist on a hot June day”. For example, AA Milne wrote the pacifist Peace with Honour in 1934, but six years later he had come full circle, arguing for the use of force: “If anybody reads Peace with Honour now, he must read it with the one word ‘Hitler’ scrawled across every page.” Even Bertrand Russell wrote: “If I were young enough to fight myself I should do so.”
In an afterword, Baker dedicates his book to American and British pacifists, noting that “They failed, but they were right”. But this is to ignore the nature of evil. It was all very well for Gandhi to write an open letter to the people of England saying: “I want you to fight Nazism without arms.” But, at least until the uprising in the Warsaw ghetto, that was what the Jews were doing and it brought them no further than the death camps.
And the idea that pacifism could influence a regime that murdered anyone who dissented is absurd. In Britain there were 62,000 conscientious objectors in WWII, and although 6,500 of them spent some time in prison they all lived to tell the tale. In Germany, conscientious objectors were shot.
In writing about COs in World War I, I could not help but admire their determination to stick to their belief amid an unthinking orgy of patriotism. But they had absolutely no effect on the war. Their lasting achievement was to ensure that in a democracy men would have the right to refuse to fight.
I am very glad to live in a country where men have the right to abide by their conscience; but unhappily pacifism has never worked. Depressingly it remains now, as in Hitler’s day, a brave ideal powerless in the face of man’s unfathomable capacity for evil.
We wonder if Obama would have wanted to negotiate with Hitler- and if he really believes that he, as opposed to Roosevelt and/or Churchill, is a more competent, qualified and insightful. Of course, a smarter-than-everyone-else Stalin did negotiate with Hitler and came to an agreement, albeit one that was to cost the Soviets 20-30 million lives.
Why would Obama want to negotiate with Iran’s president? Why would a President of the United States of America want to deal with a racist and bigot as an equal? There are those who might say that Ahmadenijad is not a racist or bigot, only an ‘anti Zionist.’ Of course, David Duke also claims he is not a racist. It is interesting to recall that David Duke and a host of other bigots were all esteemed guests of Ahmadenijad and warmly embraced. Would Obama ‘negotiate’ with David Duke? The question begs an answer- after all, there isn’t a lot that distinguishes Duke from the Iranian leader.
Former president Jimmy Carter’s visit and ‘negotiations’ with Hamas leader Khalid Mashal was not universally applauded. From Memri:
On April 16, 2008, the London Arabic language daily Al-Sharq Al-Awsat published an editorial by the paper’s editor, Tariq Alhomayed, criticizing former U.S. president Jimmy Carter’s plan to meet with Hamas leader Khaled Mash’al in Damascus this week to discuss the Israeli-Palestinian conflict.
The following is the editorial, in the original English, as it appeared on the newspaper’s website.
“Carter’s Meeting With Mash’al… Can Only Exacerbate the Crisis in the Region”
“Huge controversy surrounds former U.S. president Jimmy Carter’s meeting with Hamas supremo Khaled Mash’al. Carter has stated that during his meeting with Hamas’s leader in Damascus, he will strive to convince him to accept a peaceful solution with Israel and Fatah.
“It is common knowledge that Saudi Arabia has tried to resolve the Palestinian problem through the Mecca Agreement, but after the utmost faith and the emotional speeches that we saw and heard in Mecca; Hamas, under Khaled Mash’al’s leadership, staged a military coup in Gaza and overthrew the Palestinian Authority (PA). Moreover, Hamas has evaded Egyptian and Yemeni attempts [for reconciliation] while Gaza, under Hamas’s leadership, has transformed into a pressure front [exerting pressure] on Egypt.
“Carter’s meeting with Mash’al cannot be described as anything but an [internal] American skirmish, the outcome of which will be fruitless for the region and the Palestinian cause. In fact, it can only exacerbate the crisis in the region. There is nothing to indicate that Hamas, under Khaled Mash’al’s leadership, will commit to a resolution that unites all Palestinian efforts.”
“Clearly, Jimmy Carter is Unable to Apprehend that Mash’al Staged a Coup”
“Clearly, Jimmy Carter is unable to apprehend that Khaled Mash’al staged a coup on a democratic regime that came to power through elections – and before that had led a more dangerous ‘ideological’ coup in which the movement had declared its rejection of the Oslo Accords – all of which means a return to square one in the Palestinian-Israeli conflict.
“Khaled Mash’al’s real problem lies in the fact that he aspires more towards a truce with Israel than he does towards the vision of a Palestinian state. Moreover, he does not strive to put an end to the crisis endured by the people of Gaza inasmuch as he attempts to exert pressure on Egypt with the intention of serving goals that are far removed from the Palestinian cause.
“Mr. Khaled Mash’al leads a safe life in Damascus and is more preoccupied with preserving Hamas’s alliance with Iran and Syria than with unifying the Palestinian ranks. His position is the same as that of the rest of the Hamas leadership, which has disappeared fearing that Israel will target it, leaving the residents of Gaza to confront the Israeli aggression. Where is Ismail Haniyeh today?”
“Carter’s Meeting with Mash’al Could Harm the Palestinian Cause”
“Carter’s meeting with Khaled Mash’al could harm the Palestinian cause and inter-Palestinian reconciliation more than benefitting it. One should recall House Speaker Nancy Pelosi’s meeting with Bashar Assad in Damascus following the Democratic victory in U.S. Congress.
“Following that meeting, the entire region was suddenly deflated after Damascus received the wrong message and acted based upon it, along with Iran, in Iraq, Lebanon and Palestine. New disasters broke out in the entire region after the Syrian-Iranian alliance and their followers, Hezbollah and Hamas, assumed that President Bush had become a lame duck and that they were capable of implementing their agendas.
“Today, the same thing applies to Mash’al’s meeting with Carter; it will end with an American skirmish that Mash’al will exploit in the media and which will send the wrong signal to Hamas and others – in hope that the advent of the Democrats will benefit Hamas, Syria and Iran.
“This signifies the persistence of the internal Palestinian split and gives hope to the states that seek to disrupt the region. It will also grant Israel the opportunity to put pressure on whoever will reach the White House, whether it is the Democrats or Republicans, to take a more severe stance towards the Palestinian cause and thus complicate matters further.”
