Iraq has asked its Arab neighbours to forgive its pre-invasion debts, urging them to follow the United Arab Emirates and Algeria which have already written off what they were owed, according to Reuters.
“We’ve asked Saudi Arabia, Kuwait, Qatar, Libya, Jordan, Sudan, Egypt and Morocco to help Iraq in closing up its debt situation,” Iraqi Finance Minister Rafie al-Esawi [Rafie al-Issawi, Rafi Hiyad al-Issawi, Rafia al-Issawi] said on the first day of the Arab League Summit in Baghdad.
The Paris Club of 19 rich creditor nations agreed in 2004 to write off 80 percent of some $40 billion debt to help Iraq recover from the 2003 U.S.-led invasion. Debt forgiveness talks with non-Paris Club nations are still under way.
“It needs more cooperation from Arab countries regarding the cancelling of debt,” Esawi said, thanking the UAE and Algeria for agreeing to cancel 100 percent of debts.
Iraq’s external debt was between $130 billion and $140 billion in 2003, much of which was settled through the 2004 Paris Club agreement.
That deal required Iraq to seek similar settlements with all its other creditors. But some commercial creditors won legal judgements and have refused to comply with the settlement.
Saudi Arabia last year was owed $30 billion by Iraq and Kuwait is owed around $22 billion in additional to war reparations for the 1991 Iraqi invasion of Kuwait.
China has written off 80% of the debt it was owed by Iraq.