They are asking us to pay for the knives
they gave Saddam to slaughter us.
— Dr. Hasim al Hassani, Iraqi Islamic Party
When Saddam Hussein grabbed power in 1979, Iraq had no long-term debt. Its cash reserves were $36 billion. It had high literacy and public universities; it had extensive socialized health care. Iraq was becoming a “first world” nation.
During the 1980’s, however, as a US ally, Saddam squandered that wealth. Borrowing tens of billions of dollars, he built up a vast military and security apparatus.
A violent, cunning despot, Saddam invaded neighboring Iran, a US enemy. (Like Iraq, Iran is enticing: it has vast reserves of oil.) By 2003, no one in the world owed more money than Saddam Hussein.
Saddam’s total debt is unknown. The Jubilee Iraq website cites, among others, the IMF estimate of $125 billion. But this excludes, for example, over $30 billion in remaining Kuwaiti reparation claims, plus Iranian and Iraqi-Jewish claims totaling nearly $200 billion.
Saddam’s creditors — US, France, Russia, England, Japan, Saudi Arabia, etc. — had no illusions. They knew how Saddam was using the money. After all, as with many international loans, much of the money was spent in the creditor’s country. Weapons exporters didn’t complain. Anyway, Khomeini’s Iran had few friends.
The Iran/Iraq war (1980-88) cost a million casualties. But, conveniently, it helped neutralize both Iran and Iraq. The world’s power brokers didn’t mind. Their military aid kept the pot boiling.
And it was just fine that Saddam used their toxic chemicals and other weapons to terrorize “his own people.” Saddam’s regime extirpated domestic dissent, killing tens of thousands of Iraqis — mostly Kurds and Shiites.
In 1990, after his invasion of Kuwait (with its vast oil reserves), Saddam finally became an international pariah. That set the stage for the First Gulf War and for 13 years of murderous UN/US sanctions against the Iraqi people.
In 2003 the US invaded Iraq and deposed Saddam. Most Iraqis were greatly relieved. Not only had they not elected Saddam, but those sanctions he provoked led to hundreds of thousands of premature deaths.
Odious debt
“The doctrine of odious debt states that when creditors lend to a dictatorial regime which they know is not using the loans to benefit the population, then debt payments cannot be demanded of those people once they are free.”
—Justin Alexander, Jubilee Iraq
This is no esoteric doctrine. The US applied the same doctrine when, in the wake of the Spanish-American War, it refused to honor Cuba’s odious debt to its former colonial master, Spain.
We hear little about odious debt from the ruling nations and their international banks. Since such nations and banks have readily and knowingly lent money to tyrants (Mobutu of Zaire, Duvalier of Haiti, Marcos of the Philippines, and so on), it’s not a doctrine they seek to publicize.
If the US and other world powers have their way, the Iraqis will be bled dry — and their oil drained — paying for Saddam’s loans for years to come. Saddam’s creditors, Saddam’s 1980s allies, are also putting the screws on the Iraqi people to pay billions in debt service. Thanks to the current illegal occupation of their country, the gun is literally at their head.
In its magnanimity the US is simultaneously seeking to have some of those loans “forgiven.” But at a price. One commentator points out: “In exchange, Iraq will surrender its economic sovereignty to global financial institutions, provide foreign investors greater access to Iraqi natural resources, and increase investment opportunities for multinational corporations.” IMF structural adjustment with a vengeance.
Generalizations about Iraqis are slippery. But rare is the Iraqi who would feel obliged to take on Saddam’s debt. Nor do Iraqis want the IMF or the G-8/Paris Club creditor nations to sort out Saddam’s debts behind closed doors. What Iraqis want is for a transparent, international tribunal to adjudicate each of Saddam’s loans — a tribunal with input from creditors, but not controlled by them. That tribunal would determine whether any given loan benefited the Iraqi people (thereby legitimizing it) or whether it was odious (and need not be repaid).
With such a tribunal, some of Saddam’s IOUs may remain secret and therefore in oblivion. Creditors may not want their loans exposed for the slimy transactions that they were. According to Justin Alexander, a tribunal “would dramatically reduce Iraq’s debt, set a clear precedent for other countries which have inherited debt from dictators and discourage creditors from financing the Saddams of the future.”
The occupation won’t truly end when our troops are withdrawn. It will end when the invader finances the re-building of the nation it destroyed…and when Iraq’s odious debt is abolished.
_Ed Kinane, based in Syracuse, spent five months in Baghdad with Voices in 2003. Reach him at .
