Iraq's Odious Debts

Write off the odious debts

Daily Nation, Kenya
June 3, 2003

Evian — The world’s capital of designer water, may be a fitting city to host the Heads of State from the eight most powerful industrial nations. But the image of wealthy leaders sipping gourmet water will hardly help the G8 to defend itself against charges of being an elitist and undemocratic forum.

Debt relief, an important issue on the agenda, tallies with what most of the protesters outside the venue are pushing for. The question of whether wealthy nations should free poorer ones from the burden of repaying crushing loans has held a central place in G8 discussions in the last five years.

This year, the debate was back, but in an unusual form. The United States, which has traditionally been among the most reluctant to grant real debt relief, argued that forgiveness is essential – for Iraq.

Iraq owes upwards of $60 billion. President Bush said he was concerned that, without relief, Iraq would be forced to spend so much of its resources on debt service that reconstruction would be impossible.

However, the Bush administration’s treatment of other debtor nations suggests that the President’s new-found sympathy has more to do with vindicating his “regime change” doctrine than with any humanitarian change of heart.

In April, the White House blocked the creation of a Sovereign Debt Restructuring Mechanism at the International Monetary Fund. Although most of the world, including European trade ministers, supported the mechanism – in essence a global bankruptcy court – the US argued that it would be too expensive to even consider allowing debt-crushed countries to legally default.

Iraq’s case illustrates a point that protesters from the Jubilee debt relief coalition have made for years: Much of the debt held by countries in the developing world is in fact “odious” – the result of loans made to tyrannical regimes.

It is simply inhumane for G8 countries, including the US, to saddle impoverished citizens with these debts after the dictators fall.

If wealthy countries are serious about aiding freedom, they must recognise the illegitimacy, not only of Iraq’s obligations, but of all odious debt.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s