ChannelNewAsia.com
November 7, 2003

Washington: The Paris Club could consider cancelling part, but not all, of Iraq’s 40 billion dollar debt with its 19 members, according to a news report.

While a final decision by the group has not been reached, it aims to reach an agreement with Baghdad by the end of 2004, the deadline of its official moratorium on Iraq’s payments, a person close to the Paris Club told Friday’s Wall Street Journal.

However, an Iraqi government recognized by the international community must be in place before an agreement is reached, the individual said.

Iraq owes the official creditors of the Paris Club about 21 billion dollars, plus an almost equal amount in interest, the daily said, adding that Iraq’s biggest creditors in the group are Japan, Russia, France and Germany.

While Iraq owes an undetermined amount of money in war reparations to Iran, for its 10-year war that ended in 1989, and to Kuwait and other Gulf states after the first Iraq War in 1991, its nonreparations foreign debt has been estimated at 120 billion dollars.

The United States, after its military intervention that toppled Iraqi President Saddam Hussein earlier this year, is advocating substantial debt relief for Iraq, a proposal Iraq’s principal creditors are not warming to.

AFP