Bum's Rush for Butcher's Big, Bad Debts

Forbes Magazine ^ | April 20,2003 | Steve Forbes

[American Jingo]

Bum's Rush for Butcher's Big, Bad Debts

One immediate matter that Post-Saddam Hussein Iraq faces is the massive debt run up by its monstrous ruler. Experts estimate Baghdad is in hock for between $60 billion and $130 billion--and that's not counting reparations for the invasion of Kuwait. Those reparations alone could cost $200 billion. This level of debt for a nation with a GDP of $32 billion. The lion's share of Iraq's oil revenue could conceivably go just to servicing those obligations. The U.S. and Iraq's new government should make it clear that Saddam's debts, for the most part, are not the debts of the new, democratic Iraq. The French and Russians will squawk. Baghdad should inform Moscow that its claims will be settled in the same manner that the Soviet Union honored czarist bonds. As for Russia's pending Saddam-era contracts: They should be declared null and void. Jacques Chirac should be told: "This is nothing new for 'La France.' After all, wasn't France the biggest buyer of czarist bonds?" Besides, after the 1991 Persian Gulf war Saddam reneged on most of Iraq's debts anyway. If France gets persnickety and tries to take legal action against the new democracy, Washington should demand payment of France's still-unpaid World War I debts. If the Germans also become difficult, we should dust off delinquent World War I reparations. Creditors should understand:Getting in bed with the devil is not a risk-free proposition. The UN-run reparations program initiated after the 1991 Gulf war should be quickly wound down. The guilty regime is gone. Its successor should offer to settle claims realistically--say, 20 cents on the dollar over 20 years. The UN-run Oil-for-Food Program should be promptly terminated. Secretary-General Kofi Annan will bellyache because it's been a great slush fund--the UN siphoned off 2.2% of the monies as an administrative fee. With sensible economic policies, Iraq could easily service the obligations it faces in a generation or two, but not now. To expect it to do so would be similar to telling an organized-crime victim that his new banker is Tony Soprano.

[American Jingo]

This is the most eloquent,cogent,historically compelling argument against Russian and French involvement in any new Iraqi economy I've yet seen. Brilliant.

[BlueLancer]

Heck, the new Iraqi government ought to just demand that all creditors provide them with a complete billing list of all items that were allegedly sold to Baghdad, showing what each item was, in what quantity, and the companies involved in the purchase and sale.

Considering that most were probably illegal under the sanction policy, those debts could most probably be ignored by the new regime.

[Timesink]

I'm saving this one for the next time some Bush-hater tries to bring this up to change the subject from the fact that they lost.

[jonascord]

This is a keeper

[Kay Soze]

Excellent post!

Also note that it was such a heavy financial burdern on Germany after lossing WW1 that gave rise to the NAZI party.

[Eva]

Well stated indeed, thanks for posting it.

[HuntsvilleTxVeteran]

to my comments

[SuziQ]

GMTA. This is what Sir SuziQ has been saying since all this got started!

[redbaiter]

bump

[GailA]

UN deal leaves Iraq Kurds at Baghdad's mercy

Oil, Food and a Whole Lot of Questions

The Oil-for-U.N.-Jobs Program

Kofi Annandersen: Enron-style accounting at the U.N. Oil-for-Food Program.