by Jagen Kaiser and Antje Queck, Friedrich-Ebert-Stiftung Occasional Paper No. 12
March 1, 2004

There hardly seems a better way to illustrate the validity of the odious debt doctrine than the case of Iraq, where most outstanding loans were underwritten by the dictatorial regime of Saddam Hussein. According to a new report published by the foundation Friedrich-Ebert-Stiftung, if Iraq’s debt is to be reduced to a truly sustainable level in a way which is acceptable to the debtor and all the diverse creditor groups, it is unlikely to come about via negotiations in the Paris Club, as the Club represents only a minority of Iraq’s creditors. The report’s authors argue for an impartial decision-making process that is neither in the hands of debtors nor creditors, otherwise, they say, the next Saddam Hussein will again be able to count on the support of international lenders for crimes against their own people.