Iraq's Odious Debts

Press briefing by Ari Fleischer

The White House Office of the Press Secretary
April 2, 2003

MR. FLEISCHER: Let me give you a report on the President’s day. The President began with an intelligence briefing, followed by FBI briefing; convened a meeting of the National Security Council. He has spoken today with the Emir of Qatar, with the Foreign Minister of Kuwait and the President of Spain. This afternoon, the President just concluded a meeting that went much longer than scheduled – so my apologies for coming out here late – with a group of economists from Wall Street to talk about the state of the economy and the President’s jobs and growth package that is pending on Capitol Hill.

And then I have one announcement, and I’m happy to take your questions.

The President will meet with President Jorge Batlle of Uruguay, at the White House on April 23, 2003. This visit provides the opportunity to deepen United States cooperation with Uruguay, a strong ally in the war on terrorism and promoting democracy and economic growth in the hemisphere.

With that, I’m happy to take your questions.

[…]

Q: Iraq has a debt, an external debt of about $100 billion. It’s a huge burden, obviously, even with its oil reserves – run up by Saddam Hussein, unelected dictator, building palaces and weapons. And there is –

MR. FLEISCHER: Actually, he was elected. He had 100 percent he said.

Q: I stand corrected. There is a proposal out there that once Saddam Hussein and his regime are gone, that the people of Iraq should not be burdened with this debt, that it should be forgiven, partly to liberate them from this conduct of Saddam Hussein, and also to teach banks and corporations and countries who lent such a tyrant that kind of money a lesson not to do it in the future. Does the President have a feeling on what should be done with Iraq’s debt?

MR. FLEISCHER: I think that all of these issues are going to be the issues that are going to be part of the reconstruction effort. And these decisions will get made with the international community. Obviously, there are a number of nations who have money that is owed to them – owed by the state. The state will continue to exist. And so, therefore, it is still an important issue. The people of Iraq will have a role in this, as well. So I don’t think anybody can tell you what the outcome will be.

The one thing that is certain is Iraq is a wealthy nation. Iraq has vast resources. Iraq will have – unlike Afghanistan, for example – Iraq will have a huge financial base from within upon which to draw. And that’s because of their oil wealth. And that should serve benevolent purposes in the future, should serve peaceful purposes, should serve trade purposes in the future. It has a future, also, where the trade sanctions will get lifted one day.

Q: So you aren’t ruling in or out debt forgiveness for Iraq?

MR. FLEISCHER: Terry, I’m just saying I think it’s too soon for anybody to give any assurances on one way or another. As I said, state-to-state relations continue, even if a regime is changed.

Q: Can I ask a more specific question? Does the United States know now that forces are within 15 miles, perhaps closer to Baghdad, the day after this regime falls – literally, the day after – who runs the financial system in Iraq? Who runs its diplomacy? Who runs its oil fields?

MR. FLEISCHER: Well, this will be part of the whole reconstruction effort.

Q: But we don’t know that yet?

MR. FLEISCHER: Well, I think when the day the Taliban fell, did we know the name of the new President of Afghanistan? No. The point is, the best way to ensure the future stability of a country is to take care first of the security matters, which is first, to make certain that the regime is disarmed, to make certain that Saddam Hussein and those around him are not in power. And things will evolve, and I think things will evolve in different parts of the country at a different pace. Already you’re seeing some talk by the British of empowering Iraqi officials to run certain affairs in some of the areas that they have now controlled.

And so, again, I think you’re going to see different things, different regions of the country. But broadly, the effort is designed to make certain that security is enhanced. They’ll be additional handovers of roles to the Iraqi people from both within and without.

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