Iraq's Odious Debts

Iraq wants more than 80% scrap of debts

United Press International
Middle East North Africa Financial Network (MENAFN) November 27/2004
November 27, 2004

Baghdad: Iraqi Minister of Planning Mehdi Hafez said his country is unhappy with the decision of the Paris Club to waive only 80 percent of Iraq’s debts.

Speaking during an interview with the Saudi daily newspaper Al-Sharq al-Awsat, Hafez said, “The Paris Club decision to waive around 80 percent of Iraqi debts evokes reservations in Iraq because it is less than the 95 percent requested by the International Monetary Fund.”

Hafez also complained about a proposal to scrap Iraq’s debts in three stages, saying it is not justified.

“The reduction should be made in one go and not in stages because that might lead to a reconsideration of the decision by countries of the Paris Club depending on financial developments in Iraq,” Hafez said.

Iraq’s foreign debt is estimated at $120 billion, including $39 billion owed to countries in the Paris Club, while more than $60 billion were provided by Arab countries, especially Kuwait and Saudi Arabia.

The Paris Club is an informal group of official creditors who attempt to find coordinated solutions to payment difficulties experienced by debtor nations. The creditor nations meet several times a year in Paris.

Although the Paris Club has no legal basis or status, officials said agreements are reached following specific rules and principles agreed to by creditor countries.

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