Essays and Reports

Iraq’s Odious Debts

Patricia Adams

May 15, 2003

There’s a silver lining to the war in Iraq, it is this: The arms merchants who supplied Saddam Hussein’s military machine will not berepaid. The foreign financiers who financed Saddam Hussein’s undemocratic regime will not be repaid.

there’s a silver lining to the war in Iraq, it is this: The arms
merchants who supplied Saddam Hussein’s military machine will not be
repaid. The foreign financiers who financed Saddam Hussein’s
undemocratic regime will not be repaid. The foreign multinationals who
bribed Saddam’s cronies to secure oil concessions in Iraq will lose
these concessions.

In the past, merchants of death, crony capitalists, corrupt
multinationals and others who profited at the expense of the citizens
of an oppressed country had little to worry about. If the oppressors
were overthrown and replaced by a legitimate government – as happened
when South Africa’s apartheid regime was replaced by a democratic
government under Nelson Mandela – the legitimate government would be
saddled with the previous regime’s foreign debts. The legitimate
government had little choice but to pay. If it didn’t, international
lenders threatened to gang up on it, and their threats were credible:
The U.S. and other western governments, as well as international
agencies like the World Bank and the IMF, backed up the international
lenders by acting as enforcers.

But now, the war in Iraq is changing all that: the financiers of
unrepresentative, dictatorial regimes no longer have safe havens. The
pro-democracy Iraqis who are expected to take over the government
following the demise of Saddam’s regime, have declared that they will
not recognize debts to arms merchants and others who helped Saddam
oppress the people of Iraq. And because the U.S. government also
doesn’t want to reward those who supported Saddam’s regime, the U.S. is
quietly backing them up. Instead of repaying Saddam’s backers, that
money will be used in Iraq’s reconstruction.

Repudiating these illegitimate debts ‚Äì called “odious debts” in
international law – will be a blessing not only to Iraqis but to other
citizenries around the world. I know from our work with South Africans,
for example, that their citizens’ movement to repudiate the apartheid
debts will be renewed. The U.S. will no longer be able to insist that
South Africans repay monies used to arm the apartheid regime against
them when Iraqis needn’t do so. The story is the same with Argentinians
fighting to repudiate debts left over from the military junta that
oppressed them, with Indonesians working to repudiate Suharto’s debts,
and with Filipinos working to repudiate Marcos’s debts.

The effect of repudiating odious debts will be more profound, still,
because it will deal a body blow to all of the world’s unrepresentative
regimes. Those who arm or finance Burma’s dictatorship, for example, or
North Korea’s, or any of the other tyrannies around the world, will now
know that their money can be lost as soon as the tyrannies fall.
Financing oppressive regimes will no longer be good business.
Oppressive regimes will lose their financial lifelines and, slowly but
surely, they’ll be replaced with more democratic societies.

The Doctrine of Odious Debts, a concept first propounded in the
1920s and then forgotten – is fast becoming accepted. It is now
endorsed by leading think tanks like the Brookings Institution, by
scholars at prestigious universities such as Harvard, McGill, and Yale,
and even by the IMF. But as many Probe International members will
remember, when we first started the modern movement to recognize odious
debts in 1991, with the publication of Odious Debts: Loose Lending, Corruption and the Third World’s Environmental Legacy, the concept was greeted with skepticism. “A brilliant concept,” the reviewers often said, “but it will never happen.”

Yet it has happened, because we refused to abandon an idea that so
embodied natural justice. Through speaking tours, international
conferences organized by citizens groups, the churches’ 26-million
strong Jubilee Movement, and our own odious debts Web site (,
this odious debts movement has become mainstream. Hundreds of articles
on the subject have been written, Odious Debts has been translated into
Spanish and, just this year, into Indonesian, and dozens of our sister
citizen and environmental groups throughout the Third World have
endorsed it.

Through your past support, you have made all this happen, and for
that I wish to thank you very, very much. But I also ask you to
continue your support for this work because today, as the nitty-gritty
details of how odious debts’ laws and regulations are being developed,
we need to be more vigilant than ever. The Iraqi people deserve the
right to repudiate their odious debts, and we are pleased they have
U.S. support in this. But other oppressed people are just as deserving,
and just as much in need of the support of the international community.
With your help,
we will redouble our efforts in the crucial period ahead, to make sure
that people everywhere have the right to repudiate their odious debts.

Tax-deductible donations to Probe International can be made at:


Patricia Adams
Executive Director

P.S. If you would like to read Odious Debts online, please : click here.

To find out more about Iraq’s Odious Debts, please see:
Iraq’s odious debts

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