Restructuring and reducing Iraq's official debt

Restructuring and reducing Iraq's official debt will be the task of James A. Baker III, "long-time family troubleshooter" and former Secretary of State, according to a December 5, 2003, AP news story. President George W. Bush announced that he had called upon Baker "to oversee the job of getting Iraq out from under its crushing $125 billion debt."

In the capacity of his personal envoy, Baker will report directly to the President "'and will lead an effort to work with the world's governments at the highest levels, with international organizations and with the Iraqis in seeking the restructuring and reduction of Iraq's official debt,' Bush said in a statement read by White House press secretary Scott McClellan. ... Bush said he made the appointment in response to a request by the Iraqi Governing Council. ... Baker will serve as a volunteer, working out of an office at the White House and travelling to other countries."

"Iraq's debt carries annual servicing charges of $7 billion to $8 billion. ... Dan Senor, a spokesman for the U.S.-led Coalition Provisional Authority, said in Baghdad that estimates of Iraq's foreign debt range as high as $125 billion. ... Of the total Iraqi foreign debt, some $40 billion is owed to the United States, France, Germany, Japan, Russia and other countries who are among 19 nations belonging to the Paris Club, an umbrella organization that conducts debt negotiations. ... At least $80 billion more is owed to other Arab countries and nations outside the Paris Club."

"Iraq's external debt has been estimated at 120 billion dollars by the International Monetary Fund." "World Bank President James David Wolfensohn has said that at least two-thirds of Iraq's estimated $120 billion foreign debt will need to be written off to rebuild the country properly."

"A senior French official said on [December 4, 2003] that he did not see an easy way to quickly reduce some of Iraq's debt because the U.S.-occupied land was not a sovereign country. ... The official, Foreign Ministry spokesman Herve Ladsous, said members of the U.S.-appointed Iraqi Governing Council may visit Paris in mid-December and that the issue of debt forgiveness would be discussed." --- "Treasury officials said [December 5, 2003] that Iraq's debt was somewhere between $100 billion and $120 billion. Of that, some $40 billion is owed to the United States, France, Germany, Japan, Russia and other nations that belong to the Paris Club, a group of industrialized nations that conducts debt negotiations. About $80 billion is owed to Arab nations and others outside the Paris Club.

"The debt does not include as much as $100 billion more demanded in war reparations from countries like Kuwait and individuals who claim damages from Iraq." -

Other Related SourceWatch Resources

 * banking
 * Development Fund for Iraq to control the money; and International Advisory and Monitoring Board to oversee the fund's operation
 * Globalization of Iraq
 * Iraq Infrastructure Reconstruction Office (IIRO)
 * Iraq Revenue Watch
 * Iraq's oil industry
 * Occupation watch
 * Office of Reconstruction and Humanitarian Assistance
 * Oil-for-Food Program
 * Pax Americana
 * Post-war Iraq
 * Privatization of Iraq
 * Reconstruction of Iraq contractors
 * Reconstruction of Iraq funding
 * Trade Bank of Iraq
 * Transitional Iraqi Government

Articles & Commentary

 * Shaista Aziz, Charity Says Iraqi Billions Missing, Aljazeera.Net, October 23, 2003: "Christian Aid has produced a report, Iraq: The Missing Billions, to coincide with a US-led international conference in Madrid aimed at securing money to rebuild the country. ... The report reveals that billions of dollars of Iraqi oil money, transferred to the US-controlled Coalition Provisional Authority (CPA), has effectively disappeared. ...Christian Aid has been able to account for only $1 billion of the total $5 billion raised from Iraqi oil sales."
 * Kamil Mahdi, Privatisation won't make you popular. Resistance has forced a military rethink - but not an economic one, Guardian/UK, November 26, 2003: "From the outset, the US assumed that Iraq's public institutions were, at best, superfluous. There was little interest in rehabilitation and reform, let alone empowerment. Instead, key Iraqi establishments were subjected to the command of private US enterprises under cover of a war emergency. ... privatisation is being imposed by bombing, looting, freezing of assets, random sacking of staff and exposure to unfair competition. ... There has been no assessment of the social or economic impact of privatisation, and no alternatives are being considered."
 * Ex-Im Bank Provides $500 million in support of Trade Bank of Iraq. U.S., 15 other nations provide total of $2 billion for Iraqi trade bank, U.S. Department of State, December 8, 2003.
 * Saving President Bush with Greg Palast, Dan Briody and Mark Ames, DemocracyNow.org, December 8, 2003. Streaming video and transcript.

James A. Baker, III as Envoy to Iraq Debt

 * Bush Names Former Secretary of State Baker as Envoy on Iraq Debt. Huge debt burden endangers Iraq's long-term prospects, he says, U.S. Department of State, December 5, 2003: "Bush said the appointment came in response to a request by the Iraqi Governing Council for help in lowering the country's debt, which has been estimated at more than $125 billion."
 * Jacqui S. Porth, CPA Advisor Senor Says Reducing Iraq's Debt Is a High Priority. Iraq's council welcomes announcement of Baker as U.S. envoy, U.S. Department of State, December 5, 2003.
 * Iraq finance minister welcomes US appointment of debt envoy, AFP, December 5, 2003.
 * Steve Holland, Bush Picks Friend Baker as Iraq Debt Envoy, Reuters, December 5, 2003.
 * Elisabeth Bumiller, Baker Is Named to Restructure Iraq's Huge Debt, New York Times, December 6, 2003: "The appointment of Mr. Baker, a longtime Bush family confidant and troubleshooter, was, in effect, a public admission by the White House that the occupation and reconstruction of Iraq is a more urgent problem than officials acknowledge. Over Mr. Baker's decades of friendship with the Bush family, both father and son have turned to him when things have gone wrong, and Mr. Baker has for the most part delivered."
 * Greg Palast, Baker Takes the Loaf. President's Business Partner Slices Up Iraq, TomPaine.com, December 8, 2003.
 * James Ridgeway, Settling Some Debts. Like Fox to Henhouse, Baker Goes to Iraq, Village Voice, December 10, 2003: "The appointment of James Baker, a senior partner at Baker Botts, the big Houston law firm, ought to be a reassuring sign to Big Oil and other Bush-Cheney cronies trying to divvy up the spoils in Iraq."
 * Paying Off Debts, MotherJones, December 11, 2003: "Cronyism has been elevated to a principle of government by the Bush administration, so the latest high-level appointment in Iraq comes as no surprise."
 * U.S. Envoy Baker Leaves Monday for Iraq Debt Tour, Reuters, December 11, 2003.
 * Cutting James Baker's Ties, New York Times, December 12, 2003.
 * US gets Iraq debt relief support, BBC/UK, December 16, 2003: "The US has won agreement from France and Germany on the need to reduce Iraq's debt to help the country rebuild its battered economy."
 * 18 December 2003: "Baker's mission impossible" by Hussain Khan, Asia Times. Any debt forgiveness or restructuring will come with strings attached.
 * 23 December 2003: "It's greed, not ideology, that rules the White House. Why the US wants Iraq's debts cancelled - and Argentina's paid in full" by Naomi Klein, Guardian/UK: "In the days leading up to Baker's drop-the-debt tour, there was virtual consensus that the former US secretary of state had been sabotaged by deputy defence secretary Paul Dundes Wolfowitz, whose move to shut out 'non-coalition' partners from reconstruction contracts in Iraq of $18.6bn seemed designed to make Baker look a hypocrite. ... Only now it turns out that Wolfowitz may not have been undermining Baker, but rather acting as his enforcer. He showed up with a big stick to point out 'the threat of economic exclusion from Iraq's potential $500bn reconstruction' just as Baker was about to speak softly."