Associated Press
Fox News
January 15, 2004

Washington: Treasury Secretary John Snow and Bush administration envoy James A. Baker III briefed International Monetary Fund and World Bank officials on Baker’s efforts to persuade countries to forgive much of Iraq’s massive debt, officials at the lending institutions said Thursday.

Baker and Snow held separate meetings with IMF Managing Director Horst Koehler and World Bank President James Wolfensohn on Wednesday. IMF chief spokesman Thomas Dawson said that the IMF discussions also included other top officials at the IMF, which is assessing what level of debt reduction would be needed to give Iraq’s economy a chance to resume growth.

Dawson said talks were continuing with members of the Paris Club and other nations who hold big shares of Iraq’s foreign debt, which has been estimated at more than $120 billion. Iraq owes about $40 billion of that amount to the 19 wealthy nations who make up the Paris Club of creditor countries.

Wolfensohn in October said that Iraq needs to have two-thirds of its debt forgiven in order for the country to have a chance at economic recovery.

Dawson said he did not know whether the IMF’s assessment would be completed in time for a Feb. 6-7 meeting in Boca Raton, Fla., of finance ministers and central bank presidents from the world’s seven leading industrial countries. Iraq debt is expected to be one of the top issues.

The administration has been encouraged by the responses Baker received during a series of trips to Europe and Asia last month seeking commitments on debt relief. France, Germany and Russia, all countries that had opposed the U.S.-led invasion of Iraq, pledged support for debt relief as did Japan and China.

On a separate topic, Dawson told reporters that the IMF’s executive board was expected to meet before the end of January to approve Argentina’s progress in implementing economic reforms, which will allow the agency to disburse another $330 million in loans to bolster country’s economy.