Odious Debt

The West, Quietly, is Pillaging Iraq

voices — Sun, 17 Dec 2006 13:23:16 -0600

Excerpt

When Saddam Hussein grabbed power in 1979, Iraq had no long-term foreign debt. Cash reserves were $36 billion. Iraq had high literacy and public universities; it had extensive socialized health care. It was becoming a “first world” nation.

Soon, however, this violent, cunning despot began squandering that wealth. Borrowing tens of billions of dollars, he built up a vast military and security apparatus. In 1980 - with the United States’ blessing - Saddam invaded his neighbor, the Ayatollah Khomeini’s oil-rich Iran. To Saddam’s utter surprise, that war wasn’t over in a few weeks. It became an eight-year long quagmire. Hundreds of thousands on each side were maimed and killed.

Body

The Iran/Iraq war (1980-88) severely weakened these two nations. The world’s power brokers could endure the suffering. With their military aid (to both sides) they kept the pot boiling. And those power brokers could endure Saddam using 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, Saddam finally became an international pariah. That set the stage for the First Gulf War and for 13 years of murderous U.N./U.S. sanctions against the Iraqi people. By 2003 no one in the world owed more money than Saddam Hussein. Yet Saddam’s total debt is unknown. Jubilee Iraq cites, among others, the IMF’s estimate of $125 billion.

Saddam’s creditors - the United States, France, Russia, England, Japan, Saudi Arabia, etc. - had no illusions. They knew how Saddam was using their money. After all, as with many international loans, much of the money was spent in the lender’s own country.

In 2003, the United States invaded Iraq and deposed Saddam. Most Iraqis were greatly relieved. But even apart from the ensuing occupation, their ordeal - their captivity - was far from over. Saddam’s creditors, Saddam’s former allies, have forced Iraqis to pay billions annually in debt service. If the United States and other world powers have their way, the Iraqis will keep being bled dry - and having their oil hijacked - paying off Saddam’s loans for decades to come.

In an interesting wrinkle, the United States is simultaneously seeking to have some loans “forgiven.” The United States isn’t being altruistic; the price would be more IMF “reforms” and “privatization.” “In exchange [for some debt forgiveness], 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.” [Brian Dominick, “New Standard”]

But this all too familiar scenario isn’t inevitable. Grassroots activists and economists, especially in Canada and England, have a compelling tool: the doctrine of “odious debt.” This doctrine 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]

Odious debt is no novelty; it goes back to 1898. At the end of the Spanish-American War, the United States applied the doctrine by refusing to enforce payment of Cuba’s odious debt to its former colonial master, Spain. The ruling nations and their international banks lend money to the tyrants (Mobutu of Zaire, Duvalier of Haiti, Marcos of the Philippines, and so on) who serve them well. Odious debt is not a doctrine these creditors want to hear.

Exceedingly rare would be the Iraqi who felt 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 a transparent, international tribunal - one the creditors don’t control. That tribunal would adjudicate every outstanding documentable loan. It would determine whether the loan was odious (and therefore invalid) or whether it was designed to benefit the Iraqi people (thereby legitimizing it).

According to Justin Alexander, the 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.” It would eliminate debt without attaching IMF strings.

Ed Kinane is a human rights activist who spent five months in Iraq in 2003. Email to: edkinane@a-znet.com

VCNV Author

Ed Kinane

An Analyis of Iraq's Odious Debt

voices — Sat, 16 Dec 2006 16:06:34 -0600

Excerpt

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.

Body

Written by Justin Alexander of Jubilee Iraq
September 2005

Debt - Introduction

Aside from the ongoing internal conflict, these claims are arguably the greatest threat to Iraq’s future. As Clare Short, the then UK Minister for International Development, said on the day after Baghdad fell: “The level of debt and claimed reparation payments is so great that they could lock a naturally wealthy economy into an inability to recover.” The threat is not merely the attrition of the Iraqi budget but also the undermining of Iraq’s ability for self-determination and the resentment of Iraqis to the creditors countries and to their own government for diverting precious resources to service what they see as the personal debts of the Saddam regime.

The affect on the budget is already noticeable in reparations payments alone, even without debt payments (there is a moratorium on payments until 2006, extended to 2008 for the Paris Club portion of the debt). In the 2 years since the fall of Saddam, Iraq has paid $2.4bn in reparations, more than the combined annual health and education budget of $1.5bn in 2004. Reparation service is fixed at 5% of oil revenues by UNSCR 1483 while demands for debt service in 2006 could range from $2-5bn. Even without these demands the Iraqi budget would be expected to run a deficit in the coming years.

The reason Iraq went from a position of zero-debt (and $36bn cash reserves) in 1979 to $125bn debt in 2003 was because of the vast expenditure on the Iran-Iraq war ($120bn in the just first 4 years) together with a distribution of oil exports by that war (just $48bn in those same first 4 years). The difference was made up by foreign loans and grants (there is an ongoing dispute over whether payments from the GCC countries was structured as loans or grants provided out of fear of the Iranian revolution spreading).

Odiousness

There has been unusually broad-based international support for the argument that the debt is “odious” -a doctrine in international law dating back to the 1920s which states that loans made with open eyes to totalitarian regimes that spend the money against the interest of the people, for example on warfare, internal repression and corruption, are not valid state debts. Paul Bremer stated: “[the debt is] a result of Saddam’s economic incompetence and aggressive wars,” while his CPA economic advisor (now Polish Prime Minister) Marek Belka quantified this: “about 90% of Iraq’s virtual debt is war-related.” The Jubilee Iraq campaign (www.jubileeiraq.org), an alliance of Iraqi economists and lawyers with international debt campaigners, has garnered support for a proposed arbitration tribunal on odious debt from parliamentarians in many countries, including bills in the US Congress (supported by 31 Representatives including senior members of both parties) and the British Parliament (support from over 100 MPs).

Iraqis from across the political spectrum argue the case forcefully, for example PUK representative Perweez Mohammed has said: “The creditors cooperation enabled Saddam to presiding over atrocities such as Halabja and mass graves. Saddam never spent money for the benefit of the Iraqi people, but just for himself and his followers.” While interim Prime Minister, Iyad Allawi wrote in the Independent: “The vast majority is “odious” debt, used to build up the war machine of the ousted regime, largely through arms purchases supported by the lending countries.” And Ayatollah al-Hakim announced: “The creditors committed an act of oppression against the people of Iraq by providing Saddam’s regime with these funds. There is no question about the odious nature of these debts”. The clearest expression of Iraqi feeling on this issue was a resolution passed unanimously by the Interim National Assembly on 30 November in response to the Paris Club agreement, states: “This debt is odious and is not the Iraqi people debt. It must be cancelled immediately, completely and unconditionally.” Criticising the Paris Club deal for being phased over 3 years, partial and conditional. The Assembly’s Resolution, threatening immediate repudiation of the debt unless the creditors offered a better deal, was never implemented because of the elections and then wrangles over the formation of the transitional government (in fact some commentators have suggested the Paris Club agreement was deliberately rushed through at the end of 2004 because of the scheduled elections).

Some creditors argue that if Iraq pushes the argument that the debt is odious further this will undermine its chances of future loans and investment. However many in the finance community disagree with this. A Wall Street Journal editorial read: “We wouldn’t blame Iraq’s leaders if they decided that some of those financial obligations are indeed odious. And given that this is such an extreme case, international lenders probably wouldn’t hold it against them for long.” Even East-West Debt, an Antwerp-based debt collection firm, admitted “Stiffing the holders of the original loans may not impede Baghdad’s ability to get new loans.” A one-off repudiation of debt on the clear criteria of odiousness does not phase commercial lenders, and a country with little overhanging debt clearly has a far better credit rating than Iraq today with the world’s highest debt/export ratio.

Conditions on Debt Relief

As the National Assembly resolution made clear, Iraqis are not merely concerned about repayment of debt they consider odious, but also with conditions attached to debt relief. For the Gulf countries the conditions are likely to be a complex web of political horse-trading, as yet unnegotiated. For the Paris Club the conditions are economic policies which will be fully articulated in the IMF Standby-Agreement expected to be announced in September. Already the IMF has been meeting with Iraq, giving an overview of its priorities in September last year, when it demanded: “the implementation of key structural reforms to transform Iraq into a market economy.. in which progress must be made in 2005… including tax reform, financial sector reform and restructuring of state-owned enterprises.” A key demand is the phasing out of subsidies on fuel (initially by $1bn a year) and the end of the food ration has also been discussed. The concern about these IMF conditions are twofold. Firstly they may be socially and economically damaging. The IMF itself has admitted a degree of failure in Argentina which essentially ceded control of its economy to the IMF through the 90s because of its vast debt (which incidentally was largely accumulated by the military government and many consider to be odious) leading up to the economic crisis in 2002. Secondly, even if the IMF does recommend the optimal economy policies, Iraqis are unhappy with ceding control over their economy just as they begin on the promised path towards democracy and self-determination.

Professor Joseph Stigitz, the Nobel Prize former chief-economist of the the World Bank, recently spoke at debate on Iraq at Columbia University. He gave the example of the IMF’s policies in Russia in the 1990s, in which the communist economy was rapidly replaced by a liberalized and privatized one, causing the GDP to fall by 50% and the poverty level to rise from 2% to between 20-40%. This strategy, which he says is precisely what the US and IMF are applying to Iraq “has almost an unfailing history of failure.” Elsewhere Stiglitz wrote “In theory, the IMF supports democratic institutions in the nations it assists. In practice, it undermines the democratic process by imposing policies.” This is echoed by Iraqi economist Salih Yasir: “IMF conditions neglect the social consequences of economic policies. An IMF structural adjustment program would create more social tension and cause a social explosion which might destroy the transition to democracy.” Weshah Razzak, an Iraqi exile working as a senior economist for the New Zealand government wrote: “When I look at past IMF policy errors I get frightened. Iraq stands no chance of success if the IMF makes policies like those it made in the past.”

Reparations

Historians generally agree that the reparations imposed on Germany after the 1st World War contributed significantly to the economic crisis which propelled Hitler to power. After the 2nd World War and most major conflicts since then the international community has taken a different approach and not pressed large reparations on the losers in conflicts. The UN Compensation Commission, established in 1991, was an exception to this general rule. After 14 years of deliberation it completed is assessment of the $368bn of claims, awarding a total of $52bn of which $19bn has been paid to date.

Iraqis have long complained that they were not allow sufficient representation at UNCC meetings, and that as a result incorrect and excessive awards have been made. This was backed up on 9 January 2005 when the UN Office of Internal Oversight Services released its assessment of the UNCC, suggesting that Iraq may have overpaid by around $5bn (a quarter of the amount paid to date). The Independent Inquiry Committee into the UN Oil-for-Food gave this account: “The IAD also raised significant issues about claims processing and claims decisions at the UNCC, which, in OIOS’ view, resulted in significant overpayments to claimants… Many very large potential overpayments were identified… including double compensation, currency exchange errors, and calculation errors.”

Since the fall of Saddam, Iraqis have also been arguing a stronger case that, as fellow victims of that regime, they should not be held responsible for any reparations payments. The Youth Democracy Organization, representing Baghdad students, wrote: “When the Ba’athist regime invaded Kuwait, we Iraqis were as much victims as the Kuwaitis. Where is the international commission providing compensation for us?” At the final UNCC session on 28-30th June 2005 the Iraqi Deputy Foreign Minister Mohammed Hamud Bidan requested that ” we stop the payments of 5% from oil revenues…it is too much for us. We think it is time now to stop and leave Iraq to negotiate directly with the states concerned.”

Suggested Action Points:

1) Encourage all creditors to match the Paris Club’s 80% and ideally go beyond this.

2) Request the Paris Club to delink debt-relief from IMF conditionality.

3) Establish a UN team to investigate the possibility of an odious debt tribunal do determine fairly when of the debt claims are legitimate and which are odious.

4) In a new UN SCR end the requirement for 5% of oil revenues to go to reparations and leave Iraq to negotiate bilaterally with claimant countries and/or request for the UNCC to reassess the outstanding awards in the light of claims of overstatement.

ODIOUS DEBT, ODIOUS ALLIES: Pillaging Iraq

Ed Kinane — Thu, 15 Dec 2005 22:06:05 -0600

Excerpt

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.

Body

They are asking us to pay for the knives

they gave Saddam to slaughter us.

— Dr. Hasim al Hassani, Iraqi Islamic Party

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 .

VCNV Author

Ed Kinane

A Challenge to Care for Iraq

Jeff Leys — Fri, 01 Jul 2005 00:00:00 -0500

Excerpt

June 29, 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.

Body

June 29, 2005

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.

VCNV Author

Jeff Leys

Despite Regime Change, Kuwait Debts Keep Mounting

Jeff Leys — Fri, 01 Jul 2005 00:00:00 -0500

Excerpt

by Haider Rizvi

June 22, 2005

UNITED NATIONS, Jun 21 (IPS) - International social justice groups are calling on the United Nations to stop paying out millions of dollars in Iraqi oil revenues to Kuwaiti businesses and individuals as war reparations for Saddam Hussein’s invasion of that country 15 years ago.

Body

by Haider Rizvi

June 22, 2005

“The citizens of Iraq should not be held responsible for the actions of Saddam and his regime,” says the U.S.-based group, Voices in the Wilderness.

“The continued claims of war reparations is another form of violence against Iraqis,” adds Jubilee Iraq, a Britain-based charity.

The joint statement by the anti-war U.S. and European groups comes ahead of a U.N. meeting in Geneva next week that will decide which claims for war reparations relating to the occupation of Kuwait in 1990-91 are to be paid by Iraq, and in what amounts.

So far, the U.N. Compensation Commission, a body created as a subsidiary organ of the 15-member Security Council in 1991, has awarded compensation of more than 52 billion dollars to individuals and businesses who filed claims for losses during the war.

Despite the ongoing U.S.-led occupation of Iraq, the Commission has imposed another 33 billion dollars in war reparations against that country, which are yet to be paid.

Groups monitoring the reparations say that the remaining claims imposed on Iraq — and those yet to be decided — are primarily related to the state-owned oil companies, multinational corporations and governments.

Under pressure from the United States and other Western nations, the U.N. had imposed tough economic sanctions against Iraq soon after the end of the invasion of Kuwait. The sanctions continued for about 13 years until the U.S. invaded Iraq in March 2003.

Realising the catastrophic effects of the sanctions on the Iraqi civilian population, the U.N. Security Council passed a resolution in April 1994, which established the oil-for-food programme to allow Iraq to purchase humanitarian goods in return for its oil.

Under the programme, the U.N. set aside about 25 percent of Iraq’s oil revenues toward war reparations. However, these payments did not cease with the end of the oil-for-food programme itself. When the Security Council passed a resolution in May 2003 to dissolve the programme, it still required that five percent of Iraq’s oil revenues be used to pay reparations.

Those critical of the U.N. compensation programme are now calling for the world body to impose an immediate moratorium on all war payments against Iraq, while demanding measures to eliminate “odious debts” incurred by Saddam’s regime.

“At what point will the Iraqi people no longer be penalised for the unjust act of the Saddam regime?” asked the Jubilee activists, noting that in 1979 when Saddam Hussein seized power, Iraq not only had no long-term debt, but also held 36 billion dollars in cash reserves.

However, by the eve of the U.S. invasion, Iraq owed about 125 billion dollars to foreign creditors, including 42 billion dollars to the so-called Paris Club of rich nations. Last November, the Paris Club agreed to reduce its claims by 80 percent, but not without imposing a number of conditions. Only 30 percent of the debt forgiveness came with no strings attached.

Another 30 percent will only materialise after Iraq agrees to implement significant structural changes to its economy. The International Monetary Fund (IMF) has made it clear that in the next three years, Iraq must demonstrate its compliance with the conditions attached to the final 20 percent reduction.

As for the remaining 83 billion dollars of debt, more than 67 billion is claimed by countries that are not part of the Paris Club, and 15 billion dollars is owed to private creditors.

In response to the Paris Club’s meeting last year, the interim Iraqi leadership described most of the debt as “odious,” and demanded that it must be reduced by 95 percent, in addition to an end to war reparations.

This week, both the European Union and the United States are hosting a meeting in Brussels to discuss Iraq’s debt. The meeting is expected to draw foreign ministers from 80 nations, including U.S. Secretary of State Condoleezza Rice and U.N. Secretary-General Kofi Annan.

For their part, in order to build pressure on the Compensation Commission, a number of activists from the U.S., Britain, Iraq and other countries are on their way to Geneva. Some of them have already started fasting outside the U.N. offices to draw attention to their protests.

“Taking Iraqi oil revenue and paying companies in Kuwait is an injustice,” said Kathy Kelly of the Voices in the Wilderness. “The people of Iraq have already suffered so much, from sanctions to bombardment to occupation.”

“The Commission has no legitimacy for one day longer,” said Hans von Sponeck, who quit as U.N. humanitarian coordinator in 2000, while joining protesters in Geneva last week. “It is not a colonial master.”

The Commission will start holding its three-day meetings on Jun. 28

The Legacy of Debt

Fri, 01 Jul 2005 00:00:00 -0500

Excerpt

June 23, 2005

GENEVA–As I made my journey from Camden, New Jersey to Geneva I became overwhelmed with curiosity imagining what a country that stayed ambitiously neutral during World War II, and had produced such recognized documents as the Geneva Conventions would be like. Would Geneva be a haven of progressive politics and social radicalism? Or would the shroud of Calvinism and the “protestant work ethic” thwart my romantic sway? Upon arriving I found Geneva to be a beautiful city, confident, elegant and spotless! However, the immense “success” of the banking industry fills the poetic potency of the city with the sterile air of classicism. The revolutionary social writings of one of Switzerland’s most well known philosophers, Jean Jacques Rousseau, appear to have been written upon the banks of the Lake Geneva, and washed away by the ever strengthening tides of globalization. His legacy preoccupies my mind as I amble through avenues full of familiar names: McDonalds, Starbucks, H&M …

Body

June 23, 2005

Still, I have not come to Geneva as a tourist. I have come, together with a small group of eight Americans, one Irish and one Iranian to fast and vigil at the entrance to the United Nations Geneva compound. We have gathered to challenge the legitimacy of the United Nations Compensation Committee meetings around economic restructuring and debt compensation in Iraq. As G-8 Conference members prepare to meet in Scotland over debt relief in Africa, the West’s most recent imperialist conquest, Iraq, faces its executioner once again on the ever perilous road towards self determination. In April 1991 the United Nations Security Council passed Resolution 687, which established the legal foundation to impose war reparation claims against Iraq. In that same year the United Nations Compensation Commission (UNCC) was born and given the thorny task of overseeing debt repayments Iraq accumulated under the lavish military spending sprees of Saddam’s Baath Party during its invasion of Kuwait. An extensive list of individuals, multinational corporations, and governments has demanded repayment to the tune of $385 billion.

While a resolution to collect 30% of Iraq’s oil revenues was established by the UNCC in 1991, it wasn’t until 1996, the year the UN passed Resolution 986, (known as the oil-for-food programme) which significantly raised the cap on Iraqi oil revenues, that the Iraqi Regime agreed to begin repaying the debts. When UNICEF figures came out in August 1999 concluding that the UN’s economic sanctions policy had contributed to the deaths of a half million children under the age of five the world community demanded its own repayment: an explanation! It appears that as members of the Compensation Commission met in comfortable Geneva offices and continued throughout the 1990’s to write million dollar checks to rich countries like Kuwait, their fellow Baghdad colleagues stepped over corpses on their way to the bank. Our literature asks that the Compensation Commission recall the dreadful consequences following the Treaty of Versailles on Germany’s devastated economy that contributed to the dawning of the Second World War. Iraq is of course not Germany, and our message is not intended as a threat, but perhaps an unusual opportunity to recall the lessons from our complex and brutal history and not repeat our mistakes.

Our delegation celebrates its 9th day of the fast tomorrow; we are halfway to the end! We continue to believe that lessons of hospitality and generosity are also working in our history as many of us experience them on the shabby dirt roads of Jummeriyah or the broken streets of Camden, where I live.

As we gather each day we pray that members of the UNCC do not continue to step over more corpses on their way to fill the coiffeurs of the rich. As we fast we recall the prophetic words of Dr. King in his 1967 address at the Riverside Church in New York City where he challenges, “A true revolution of values will soon cause us to question the fairness and justice of many of our past and present policies. On the one hand we are called to play the Good Samaritan on life’s roadside, but that will be only an initial act. One day we must come to see that the whole Jericho road must be transformed so that men and women will not be constantly beaten and robbed as they make their journey on life’s highway. True compassion is more than flinging a coin to a beggar. It comes to see that an edifice which produces beggars needs restructuring.”

VCNV Author

Farah Marie Mokhtareizadeh