Iraqi Debt

IRAQI DEBT….Buried on the inside pages today:

Saudi Arabia and Kuwait signaled they would forgive some of the billions of dollars owed to them by Iraq as President Bush’s envoy pressed Arab nations to reduce Iraq’s debt.

But both Saudi Arabia and Kuwait said they would only reach debt reduction deals with a sovereign Iraqi government. Neither country said how much debt they would forgive.

Iraq owed $9 billion to the Saudi government and around $15 billion to Kuwait, a debt accumulated before Saddam Hussein invaded the small oil-rich Persian Gulf emirate in August 1990.

This is good news, even with the rhetoric about dealing only with a sovereign government, since getting rid of this debt is critical to any kind of success in rebuilding postwar Iraq. Qatar and the Emirates also agreed in principle to forgive substantial amounts of debt.

On the other other hand, there’s this from Al-Jazeera:

Kuwait will discuss cutting Iraqi debt but billions of dollars in reparations dating from Iraq’s 1990-91 occupation of its neighbour are not negotiable.

“The issue of Iraqi debt is essentially different from that of war reparations. For that, Kuwait totally rejected to discuss the issue,” Kuwait Foreign Minister, Shaikh Muhammad was quoted as saying by newspapers on Thursday.

This is less-good news since reparations payments exceed ordinary debt by a substantial margin. Still, it’s welcome progress.

I sure didn’t like James Baker much when he was leading the Bush junta in Florida in 2000, but he sure knows how to get results, doesn’t he? I like him a lot better when he’s on my side.

Washington Monthly - Donate today and your gift will be doubled!

Support Nonprofit Journalism

If you enjoyed this article, consider making a donation to help us produce more like it. The Washington Monthly was founded in 1969 to tell the stories of how government really works—and how to make it work better. Fifty years later, the need for incisive analysis and new, progressive policy ideas is clearer than ever. As a nonprofit, we rely on support from readers like you.

Yes, I’ll make a donation