Iraq's Odious Debts

Outrage at US plan to mortgage Iraqi oil

Faisal Islam
The Observer, UK
July 13, 2003

American plans to mortgage Iraq’s future oil supplies to pay for expensive postwar reconstruction work risk a repeat of mistakes made with Germany after the First World War, debt relief campaigners said this weekend. Much of the revenue will be securitised over at least a decade under the proposals being pushed by the US Export Import Bank, the Bush administration’s trade promotion body, and a lobbying group that includes key American contractors Bechtel and Halliburton.

Reports suggest that $30 billion of loans will be backed by Iraq’s reserves, the second biggest in the world.

Anne Pettifor, head of the Jubilee Plus debt relief campaign, said ‘It is outrageous that the poor people of Iraq will be lumbered with billions of dollars of debt that will be used to boost the share prices of Wall Street financiers and US construction giants.’

She warned against the coalition ‘using the instrument of debt to control Iraq’, after it leaves. Such a motive was behind the way Germany was treated after 1918, provoking resentment that eventually encouraged the rise of Adolf Hitler.

The World Bank has said such commitments should only be made by a sovereign Iraqi government. The plans will complicate a conference on Iraq’s existing $120bn debt, which the US wants European powers to cancel.

The Department for International Development would not rule out British participation in the scheme.,2763,997055,00.html [PDFver here]

Related article: U.S. firms seek future oil revenues for reconstruction, by Warren Vieth, Los Angeles Times, USA, July 12, 2003

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