Reuters

December 18, 2003

London: British Prime Minister Tony Blair joined the U.S., France, Germany and Italy on Thursday in calling for a “substantial reduction” of Iraqi debt using the framework of the Paris Club during the course of 2004. Iraq will need an internationally recognised leadership to sign a debt relief deal with the Paris Club group of creditor states, Paris Club President Jean-Pierre Jouyet said on Thursday.

It will also need an International Monetary Fund agreement.

Jouyet said Iraq’s total foreign debt was estimated at $115-120 billion.

The Paris Club a group of 19 countries said up to some $42 billion including principal and estimated past due interest, not paid since the 1990 invasion of Kuwait, is owed to states which are participating in its process.

Outside of the Paris Club there are other substantial debts, whose numbers can only be estimated.

According to emerging market brokerage Exotix, Gulf State bilateral debts, which are regarded by Iraq as aid, are estimated at $45.5 billion, former eastern bloc states excluding Russia are owed $5.0 billion, other states, including China and Turkey are owed $9.0 billion.

On top of debt to other states, Iraq owes an estimated $3.0 billion to international banks under the London Club, $8.5 billion in other private claims, including Japanese and South Korean companies and Italian bank Banca Nazionale del Lavoro SpA, plus an estimated additional $0.5 billion to other creditors.

The final breakdown of debts owed to all countries will not be available until the International Monetary Fund completes its audit. It estimates debts at around $120 billion, including commercial debts.

Separate from the debt issue, but having an impact on Iraq’s ability to pay its debts are war reparations from the 1990 invasion of Kuwait.

It has paid out $18 billion in war claims of the $46.57 billion awarded by the UN Compensation Commission and $95.7 billion of judgements is unsettled, with analysts estimating Iraq will pay out a total of $50 billion.

Iraq could also face a claim of $100 billion from Iran after the 1980s war which Iraq started.

Here is a short fact box on what Iraq owes to the Paris Club, excluding past due interest, which has not been paid since at least 1991.

COUNTRY millions of dollars

Australia 499.3

Austria 813.1

Belgium 184.5

Brazil 192.9

Canada 564.2

Denmark 30.8

Finland 152.2

France 2,993.7

Germany 2,403.9

Italy 1,726.9

Japan 4,108.6 Netherlands 96.7

Korea (S) 54.7

Russia 3,450.0

Spain 321.2

Sweden 185.8

Switzerland 117.5

United Kingdom 930.8

United States 2,192.0 TOTAL: 21,017.9

NOTES:

* All the debt results from credits contracted before August 2nd, 1990 when Iraq invaded Kuwait.

* The table excludes late interest.

* The figures cover, from the debtor side, the amounts due by the public sector and from the creditor side, the figures include credits and loans granted or guaranteed by governments or appropriate institutions.

Source: http://www.clubdeparis.org