Tom Davis
The Financial Times, UK
July 11, 2003

Debts owed by the ousted Iraqi regime from before the 1991 Gulf War to Paris Club countries amount to more than $21bn, it was revealed on Friday.

Of the sovereign creditors in the Paris Club, Japan was owed the most at just more than $4.1bn. Russia and France, which were among the most vociferous opponents of the recent conflict in Iraq, were the next highest creditors, with Russia owed $3.45bn and France $2.99bn.

The coalition leaders in the conflict, the US and Britain, are owed $2.19bn and $930.8m respectively. Other allies in the coalition, Spain ($321.2m) and Australia ($499.3m), are also on a list that includes 19 Paris Club members.

There are several non-member countries owed substantial amounts, such as Morocco and Turkey, which the Paris Club has invited to join discussions over repayments.

The figures cover only part of the debts and exclude reparations due for the invasion of Kuwait. Analysts predict total debts could be up to $120bn.

Political point scoring has been rife in negotiations with the US keen to abolish all debts in an attempt to teach those opposed to the war a lesson. Germany, owed more than $2.4bn, France and Russia are less keen on debt cancellation, proposing instead a delay of repayment.

Whatever the decision, most Paris Club members agree that the Iraqi economy needs to be properly functioning before any form of repayment can be made.

Analysts estimate that up to 700 per cent of Iraq’s annual export earnings would be required to pay off the debts. Such a burden, most members agree, would be unfair to a people ruled for so long by Saddam Hussein’s oppressive regime and who often saw none of the money earned from the country’s assets.