Iraq's Odious Debts

IMF sees Iraq economic program before end-2004

September 9, 2004

Washington: The International Monetary Fund on Thursday said Iraq could have an IMF-backed economic program with financing in place by the end of 2004 following “good progress” made in talks last week in Paris.

But the fund said Iraq will first have to clear its $80 million in arrears to the global lender before aid can flow under an IMF post-conflict facility, which generally comes with fewer conditions than other more formal programs.

“The mission made good progress in discussions on policies that could form the basis of an economic program that could be supported under the emergency post-conflict assistance facility sometime in the last quarter of 2004,” IMF spokesman Thomas Dawson told a regular briefing for reporters.

Dawson said further meetings with Iraq’s interim government would take place in early October around the IMF’s annual meeting in Washington.

Discussions between the IMF and Iraq have taken place outside Iraq since the August 2003 bombing of the U.N. headquarters in Baghdad, which saw multilateral lenders withdraw their staff from the country for security reasons.

Dawson said a debt deal between Iraq and the Paris Club of sovereign lenders was not necessary for the IMF to lend under its post-conflict facility.

Comments made on Thursday by U.S. Treasury Undersecretary for International Affairs, John Taylor, suggested an agreement on Iraq’s $120 billion in foreign debt was on track for year-end.

“At previous meetings of finance ministers there was agreement to get the Iraq debt settled by the end of this year, so that is the goal, to get a resolution by the end of 2004,” Taylor told a media breakfast in Cape Town, South Africa.

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