Written by Justin Alexander of Jubilee Iraq
September 2005
Debt - Introduction
Iraq has an outstanding debt load of around $115bn (reduced this year from around $125bn in the first trance of Paris Club relief) on top of $33bn of unpaid war reparations. This means that the ratio of debt and reparations to export earnings is around 750%, way beyond the IMF’s recommended maximum ratio of 162%. The Paris Club, which holds $42bn, about a quarter of the total debt and reparations, agreed in November 2004 to reduce their claims by 80% in three trances linked to economic conditionalities. The US is topping this up to 100% relief but no other countries have followed suit. Even if all creditors match the Paris Club terms, and this looks far from certain, Iraq will still be left with $25bn debt along with the $33bn reparations. Additionally there is a very large reparations claim from Iran, although this has little international backing.
