Joe Churcher
Scotsman.com
January 29, 2004

The “vast majority” of Iraq’s 120 billion US dollars international debt must be written off to stabilise its economy, Chancellor Gordon Brown told MPs today.

He said: “Iraq is the country with the second-largest reserves of oil in the world so it is potentially a very rich country indeed.

“It is also true however that the average income of the population is less than 500 a year – that is less than 2 a day.

“It is because of that that we need to take action to correct the position.

“The United Kingdom view is that the international community will have to write off the vast majority of Iraq’s debt to restore economic sustainability.

“We are in discussion with many of our international partners who share this view.”

Most of the money was owed to Russia, Germany and France, with just 1 billion owed to the UK, he said.

Iraq must also meet around 80 billion of compensation claims from Kuwait.

The Chancellor was responding to Labour backbencher David Stewart (Inverness East, Nairn & Lochaber) who had told the House: “Loans to Saddam financed his wars, his palaces and the oppression of ordinary Iraqis. We must get rid of the millstone of Iraqi debt.”

Father of the House Tam Dalyell questioned what discussions were taking place with the Russians over getting the Iraqi oil industry, and water supply, up to date.

Mr Brown said talks would take place when Russia joined the world’s other major states at the G8 summit in Florida next week.

“More partners are being drawn in to help with reconstruction. The backlog of repairs, whether in health or education or water, or general infrastructure, is massive.

“That’s why we cannot wait and the Government has already set aside something like 800 million as our contribution to reconstruction.”