Iraq's Odious Debts

Japan forgives $6 billion in Iraq debt

United Press International

November 24, 2005

Washington: The government of Japan has released Iraq from $6.1 billion of the $7.6 billion owed to it.

Iraq owed $700 million to the Japan Bank for International Cooperation and $6.9 billion to commercial creditors, debts insured by the Japanese government.

Japan’s move puts into effect an agreement reached in November 2004 by the so-called Paris Club, a conference of major creditor nations including France, Germany, Italy, Russia, the United Kingdom, and the United States. At that meeting, the Paris Club agreed to cancel about 80 percent of the debt owed by Iraq to its members, about $39 billion. Iraq’s total foreign debt is about $120 billion.

The United States is owed about $4 billion. Iraq owes France $5.6 billion, Germany $5.5 billion, Italy $3.8 billion, Russia $3.5 billion and the United Kingdom $1.5 billion.

The Japanese Embassy in Washington said Japan will cancel the first 30 percent upon the signing of notes to the agreement by both governments. The next 30 percent will be cancelled once the Iraqi government agrees to an International Monetary Fund program for lending, debt relief and budget structuring. That debt will be relieved over a period of 23 years. The remaining 20 percent will be relieved when the IMF conducts a final review of Iraq’s debt repayment program.

The United Nations has shielded Iraq’s oil revenues from debt mandatory repayment until January 2008.

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