Hehe there's still that little contraversy involving Baker, Carlyle group, and confliuct of interest; since the 80% debt forgiveness does not include Kuwait and reperations. Maybe one should not be quite so fast to hold up James Baker as an unqualified hero here.

Oh to have been a fly on the wall when Baker was out busting balls in some of these foreign capitals. You really gotta wonder what was really said in some of these meetings for so many countries to agree to subsidize the American Iraqi adventure like that. Because that is in effect what is happening with this deal.

Not really. How much of that debt was Iraq realistically going to repay?
This might be more marking to market than forgiveness.

Not really. How much of that debt was Iraq realistically going to repay?
This might be more marking to market than forgiveness.

This begs the question -- why not an equal level of debt forgiveness for a few desperately poor nations ? Iraq is generally a far richer country than most countries in Equatorial Africa (and it has a big rich Uncle as well).

Of course, I wonder if those same people who've been claiming that misadventure in Iraq was worth it if only because of the improvements in the lives of its citizens would be willing to spend 1/10th of the $200 B we spent in Iraq in general foreign aid ..

desperately poor nations want repay there debts anyway so why bother forgiving them.

Why wouldn't the moderates in Iran welcome a U.S. invasion? Removes both the mullahs and the debt.

Over-simplistic? Yes I am.

So, why wouldn't the moderates in Iran welcome a U.S. invasion? Rid themselves of both the mullah's and the debt.

Over-simplistic? Yes I am.

(dooooh! stupid server)

Better late than never, which should not be read as a criticism of Baker. It's just that forgiveness of Iraqi debt would have had a salutary impact had it been announced in the summer of last year, before the insurgency gathered steam; from the European point of view debt forgiveness could have been a bargaining chip with the Bush administration. Instead France, Germany and Russia waited until debt collection was all but a moot point, and the most they got out of it was decorous silence from the administration on the oil-for-food scandal and some flattery on background of each country's President.

Fairness demands that the many technical difficulties with debt forgiveness of this kind be acknowledged. And, this could be very helpful if it really serves as a "...benchmark for other holders of Iraq's total sovereign debt of $125bn." Maybe it will, maybe it won't; part of that debt is owed to Kuwait as war reparations and other Iraqi creditors, most of them Arab governments, may have their own reasons for holding out.

It was easy. He promised them, in non-binding circuitous language, that we wouldn't invade anybody especially Iran any time soon or do anything similarly rash. Forgiving non-performing Iraqi loans for that is well worth it. I don't know what Iraqi debt notes were trading at but it can't have been more than pennies on the dollar.

If I were Iraq I wouldn't pay those debts anyway.

Boy what I would do to be a fly on the wall when Baker goes out busting balls in some of America’s most prestigious boardrooms because according to Naomi Klein:

But the UNCC’s corporate handouts only accelerated. Here is a small sample of who has been getting “reparation” awards from Iraq: Halliburton ($18-million), Bechtel ($7-million), Mobil ($2.3-million), Shell ($1.6-million), Nestle ($2.6-million), Pepsi ($3.8-million), Philip Morris ($1.3-million), Sheraton ($11-million), Kentucky Fried Chicken ($321-thousand) and Toys R Us ($189,449). In the vast majority of cases, these corporations did not claim that Saddam’s forces damaged their property in Kuwait—only that they “lost profits” or, in the case of American Express, experienced a “decline in business,” because of the invasion and occupation of Kuwait. One of the biggest winners has been Texaco, which was awarded $505-million in 1999. According to a UNCC spokesperson, only 12 per cent of that reparation award has been paid, which means hundreds of millions more will have to come out of the coffers of post-Saddam Iraq.

Surely all these proud and patriotic companies will be falling over themselves to show they support Iraqi reconstruction more than those commie Europeans, won’t they?

So Russia said Iraq had to pay 20% of its debts. How much did Russia offer to pay on its GKOs in 1998 - 15%?

Huh?

But the UNCC’s corporate handouts only accelerated. Here is a small sample of who has been getting “reparation” awards from Iraq: Halliburton ($18-million), Bechtel ($7-million), Mobil ($2.3-million), Shell ($1.6-million), Nestle ($2.6-million), Pepsi ($3.8-million), Philip Morris ($1.3-million), Sheraton ($11-million), Kentucky Fried Chicken ($321-thousand) and Toys R Us ($189,449). In the vast majority of cases, these corporations did not claim that Saddam’s forces damaged their property in Kuwait—only that they “lost profits” or, in the case of American Express, experienced a “decline in business,” because of the invasion and occupation of Kuwait. One of the biggest winners has been Texaco, which was awarded $505-million in 1999. According to a UNCC spokesperson, only 12 per cent of that reparation award has been paid, which means hundreds of millions more will have to come out of the coffers of post-Saddam Iraq.

Where was this shit in the article?

If I were Iraq I wouldn't pay those debts anyway.

Why doesn't Allawi just unilaterally cancel all foreign debts? Is he worried about Iraq's credit rating, or does he think Kuwait might declare war?

Is there some Bush-and-his-oil-cronies-want-their-money-more-than-they-want-Iraqi freedom angle to this? Or does Iraq need to curry favor for its future reconstruction? As long as the world hates America and isn't helping in Iraq, there doesn't seem to be any reason for anyone involved to honor the debts.

Cancelling debt unilaterally is very, very bad. Ask any South American with half a brain what happened when Sarney did it to Brazil or when the Argentinians did it. Investors go on an all-out panic attack.

The funny thing is that the rest of the world has no debt to the first world. It's the other way around. Raping of resources, pushing down their wages, and wiping out domestic agricultural markets means the 1st world owes them. What's even more ironic is that the 3rd world is a net creditor to the US as it is partly financing American debt. Irony upon irony.

Cisco, color me unconvinced. Brazil, Argentina: real countries. Iraq: not so much. What exactly happens if investors go on a panic attack -- Hyperinflation? More precisely, what kind of panic attack is it that hasn't set in already after the country is invaded, has its government toppled, and maintains for a year and a half unpassable roads, a 50% unemployment rate, and oh yeah a growing "insurgency".

I'm just saying, I don't see what Iraq has to lose.

"Cancelling debt unilaterally is very, very bad. Ask any South American with half a brain what happened when Sarney did it to Brazil or when the Argentinians did it. Investors go on an all-out panic attack."

Iraq investors? What investors?

What a relief. 20% of Iraq's debt will be paid off by a free Iraqi population that was tortured and oppressed by the very debt incurred by Saddam's government.

Yay G8 Banks!

I hope the full details of the agreement are open source so it is not just a handshake and a wink between central bankers.

Without Kuwait and Saudi Arabia on board, it's not going to mean very much.

Right. 20% of $40 billion, 100% of $80 billion.

My immediate thought was same as wml's, it is mainly notable for the fact that Kuwait is not included and Baker's other employer, the Carlyle group is representing Kuwait's "interests".

Note also that in real terms, the value of this dollar-denominated obligation to France and Germany has plunged nearly 30% in the last year alone.