Iraq's Odious Debts

A Challenge to Care for Iraq

Jeff Leys
Voices in the Wilderness, Electronic
June 30, 2005

For the past 15 years, our country has waged war against the Iraqi people. Over 15 years of bombs and sanctions, our country deliberately and with malice destroyed Iraq’s water treatment and distribution system, health care system, and educational system. Over 15 years, our country created the conditions under which Iraqis are forced to seek subsistence on a meagre food distribution system, now under threat of being monetized. Over 15 years, our country destroyed Iraq’s economy, creating a current condition of unknowingly high rates of unemployment.

Our country chose to impose and continue the brutal economic sanctions against Iraq, fully knowing the cost to innocent Iraqis. Our country chose to invade Iraq in March 2003 under the guise of any number of now disproved pretexts and pretensions. Since our country began its occupation of Iraq, upwards of 100,000 or more Iraqis have likely died because of the impact of the occupation. The child malnutrition rate has nearly doubled. It remains unsafe for children to go to school or to play in the streets, or for women to travel outside their homes. The health care system remains devastated. Our country’s military continues to level cities – Falluja, Tal Afar, Al Qaim, Karabalia – in some perverse version of whack-the-mole, claiming to be out to defeat the “insurgents”, but destroying the lives of tens of thousands of Iraqis.

In the face of our country’s crimes against Iraq, our own response as an anti-war movement remains feeble. Two separate national mobilizations are called to occur on the same day in Washington, D.C. this September. Turf battles between organizations are played out on the national stage and in public. Our movement circles up and once again fires inward towards the middle of the circle. Our movement’s demands become either so expansive or so restrictive that our anti-war movement totters on the brink of irrelevance.

The people of Iraq deserve more than this from those of us whose country has waged war upon the Iraqi people for the past 15 years. Let us discuss, debate, discern – and then act decisively upon – our responsibilities and obligations to the Iraqi people.

Of course, we must act to end our country’s military occupation of Iraq. This is a necessary but not sufficient condition for the restoration of a just treatment of Iraq by our country. However, if this is all that happens, it will be a “feel good” moment for our anti-war movement, but that is all it will be. A curse be upon us if we all go home, pat ourselves on the back for a job well done, and go back to our “normal” everyday lives on the day U.S. troops are withdrawn from Iraq. If that is our reaction, we will have failed miserably in fulfilling our responsibilities and obligations to the Iraqi people.

We must wrestle with the unknowns and ambiguities of what will occur in Iraq when the U.S. military is withdrawn. To simply say “immediate withdrawal” without any attempt to grasp for or understand that a transitional effort is necessary is to abandon our responsibilities to Iraqis.

It is not enough to simply say that at the point the U.S. withdraws militarily from Iraq that Iraqis will be truly free to determine their future, free from U.S. occupation. It is not enough to say that the violence in Iraq will cease simply because the U.S. military is no longer present. While the U.S. military does not provide any significant daily safety for Iraqis, and indeed is the central focus of the violence in Iraq, we must be able to squarely acknowledge that safety conditions and violence may well become worse in Iraq absent the U.S. military presence. We must be able to acknowledge and act upon the knowledge that Iraqi blood shed during and after the U.S. occupation is blood which is, in fact, on our hands as citizens of the United States. It is blood we cannot simply wash away by saying to ourselves, well the U.S. troops are back in the U.S. now, after the occupation ends.

We have an obligation to force our country to re-engage the international community in the creation of an international peacekeeping force which could be utilized in Iraq. Such an international peacekeeping force might well be under the auspices of the United Nations or of another third party. Our of their own self-interests, countries around the world have a strong interest in Iraq emerging as a stable country and would therefore have reason to contribute forces to such a peacekeeping force. Of course, any such international peacekeeping force must not be under the control or influence of the United States. Also, our country, along with the United Kingdom, ought to fully fund the operations of the peacekeeping force, since it is our country which created the crisis in Iraq.

We must end our country’s – and the international community’s – ongoing economic warfare against the people of Iraq. This warfare currently takes the form of demands for war reparations payments from Iraq for the crimes of Saddam Hussein in invading and occupying Kuwait in 1990-91. This warfare also takes the form of demand for repayment of the odious debt which Saddam Hussein incurred in the 1980’s as he built his military machine to wage war against Iraq and strengthened his internal security apparatus to repress the Iraqi people. Closely related to each demand is the shadow of the International Monetary Fund, waiting to impose an economic structural readjustment program upon Iraq.

This week, the United Nations Compensation Commission (U.N.C.C.) is meeting to impose untold billions of dollars in war reparations claims against Iraq for Hussein’s crimes. Up to 65 billion dollars in claims could be imposed against Iraq – virtually all going to countries rich with oil resources or to multinational corporations. Iraq already has been forced to pay out 19 billion dollars – mostly to corporations – for the crimes of Hussein. Another 33 billion dollars in claims are already imposed but are yet to be paid.

Virtually all claims filed by individuals for losses suffered as the result of Hussein’s actions have been paid in full.

For how long will our country and the international community punish the Iraqi people for the crimes of Hussein? The solution is simple. Our country must take the lead in actively pursuing and passing a new U.N. Security Council resolution that would cancel outright all outstanding and unpaid war reparations claims imposed or pending against Iraq.

Our country and the international community must also justly treat Iraq concerning the odious debt incurred by Hussein’s regime. Odious debt is that debt which is secured by an authoritarian leader and which is utilized for the advancement of the interests and well-being of the undemocratically established regime and which is not utilized for the common good (i.e., the building of schools, hospitals, health care clinics, etc.).

At the start of Hussein’s regime, Iraq had about 36 billion dollars in cash reserves and no long term debt. These reserves were exhausted during the 1980’s as Hussein built up his military for the war against Iran and the security apparatus for maintaining power.

By 2003, the most conservative estimate was that Iraq’s debt stood, at a minimum, at 125 billion dollars. This includes both the principal part of the loan that was initially borrowed as well as the interest that accrued on the loan. Iraq had no means to make any payments on these odious debts from 1990 onward because of the imposition of economic sanctions upon Iraq.

About 42 billion dollars of this debt is held by member countries of what is known as the Paris Club, the majority of which is accrued interest. The Paris Club includes the United States, United Kingdom, Russia, Japan and other major industrialized countries. Last December, the Paris Club reached an agreement with Iraq which would provide for debt reduction. However, the bulk of the debt reduction is tied to Iraq’s acceptance and completion of an economic restructuring program imposed by the International Monetary Fund. Only the first 30 percent of Iraq’s debt would be cancelled outright. The next 30 percent would be cancelled only upon Iraq’s acceptance of an IMF restructuring plan. The final 20 percent reduction would occur only after Iraq completed the IMF plan. Once again, Iraqis would find their future controlled by outsiders.

The solution to the odious debt issue is rather simple. The United States should take the lead in proposing, advancing and advocating for a U.N. Security Council resolution which would create an international arbitration tribunal to hear cases of odious debt. Countries and companies with claims against Iraq would bring their claims to this tribunal. Those filing claims against Iraq would have the burden of proof to prove that the debt is not odious. If the debt is deemed to be odious debt, the debt would be cancelled outright.

Our country must also pay war reparations to Iraq. Our country has waged economic and military warfare against Iraq for the past 15 years. Our country owes Iraqis war reparations for the damage our country has inflicted upon them in these 15 years of war.

Why should the U.S. pay war reparations to Iraq at the same time that I argue that war reparations claims against Iraq should be cancelled? The answer again is simple. The people of Iraq had no say in Hussein’s decision to invade and occupy Kuwait. We, the people of the United States, on the other hand, live in a democracy in which we have the right to vote for our elected representatives, to lobby our elected representatives, to openly act for change in the policies and actions of our country. For 15 years, we in the United States remained far too silent and far too lethargic and far too apathetic to change the direction our country took towards the people of Iraq. We have no excuse. We all could have chosen to learn what our country was doing to the people of Iraq. We chose not to and our elected representatives chose to continue the genocidal policies against Iraq.

What might these war reparations to Iraq look like? In the fall of 2003, the United Nations and World Bank issued a joint needs assessment concerning the reconstruction costs for Iraq. This assessment projected that 35.8 billion dollars would be needed from 2004 to 2007 for the reconstruction of Iraq (24 billion for infrastructure, 3 billion for agriculture and water resources, and 6.4 billion for health and education). The former Coalition Provisional Authority projected another 19.4 billion in reconstruction needs over that same period of time (8 billion in oil and 3.5 billion in the environment). Of course, these are likely minimal numbers and circumstances have changed in the nearly two years since the UN and World Bank issued this report. But it does give an initial ballpark figure – and demonstrates that the cost of paying war reparations to Iraq would be less than the cost being paid by the U.S. to continue its bloody occupation of Iraq.

Since this reconstruction is due to the economic sanctions regime and to the ongoing economic and military warfare waged against Iraq, it is only just that our country and the United Kingdom, as our primary ally in the war against Iraqis, fund this reconstruction. War reparations payments from the U.S. to Iraq must come without strings attached.

We have our work cut out for us in the anti-war movement. Our movement must be broader than simply the demand to bring U.S. troops home from Iraq. It must be broader than simply calling for an end to the occupation. It must include demands for an end to the economic warfare which our country waged against Iraqis these past 15 years. We cannot return to our “normal” everyday lives if and when the U.S. military occupation of Iraq ends. We must continue to put on the front burner true justice for Iraqis and commit ourselves fully to this never ending struggle of solidarity.

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