Business Day
October 24, 2003

Hamburg: Germany is opposed to the cancellation of Iraq’s huge debt burden, a German minister says, calling for a new UN resolution that will share out responsibility for reconstruction. “I rule out a complete cancellation of the debt,” run up by former president Saddam Hussein’s regime and estimated at $130 billion (110 million euros), Heidemarie Wieczorek-Zeul, Minister for Cooperation and Development, said.

Given Iraq’s oil riches, it would be better to have credit financing ahead of the windfall oil revenues will bring to the country, Wieczorek-Zeul said.

She warned against the United States controlling Iraqi oil revenues, saying they should be used for reconstruction and not to support US companies.

With an eye on the October 23-24 Iraq donors conference in Madrid, Wieczorek-Zeul said the role of the United Nations was now “totally insufficient.”

“That’s why the amounts of donations envisaged by the World Bank and the interim Iraqi administration will not realistically be reached.”

Wieczorek-Zeul called for a new UN resolution because the “United States taking sole reponsibility will not settle the problem of reconstruction” in Iraq.

Donor countries and organisations will gather in Madrid on Thursday and Friday for the special conference that is expected to provide assistance for Iraq’s reconstruction following the fall of Saddam Hussein’s regime on April 9.

Despite Iraq’s huge oil reserves – the world’s second largest with an estimated 112 billion barrels – its economy has been left in shambles by three wars and 13 years of stiff UN sanctions.

The World Bank and the United Nations have estimated Iraq’s total reconstruction needs at around 36 billion dollars for 2004-2007. AFP