Conference pledges 30-bln-dollar debt reduction for Iraq
By Lamia Radi
SHARM EL-SHEIKH, Egypt, 03 May 2007 (AFP)
UN chief Ban Ki-moon said that debt reduction of 30 billion dollars had been pledged by countries attending a key conference on Iraq in this Egyptian Red Sea resort on Thursday.
"Specific financial commitments by particular countries are estimated at over 30 billion dollars," Ban told reporters.
"This includes commitments of debt relief terms of the Paris Club from Bulgaria, China, Saudi Arabia and Greece. It also includes new financial commitments from the United Kingdom, Australia, Spain, China, Denmark and Korea and other key participants," he said.
In 2004 the Paris Club, a group of 19 creditor governments from major industrialised nations dealing with debt restructuring, agreed to cancel 32 billion (80 percent) of the 40 billion dollars they were owed by the Saddam regime.
Iraqi officials were in talks with several countries on Thursday to write off billions of dollars in debts, and threatened to block investment opportunities for those who did not.
"Any country that is not scrapping debt or does not respect Paris club recommendations will not be allowed to invest in Iraq," Finance Minister Bayan Jabr Solagh told AFP on the sidelines of the international conference.
Jabr's warning was chiefly aimed at Russia, to which he said Iraq owes around 13 billion dollars.
Moscow has reportedly said it was ready to scrap the debt in exchange for investment in the major southern Iraqi oil field of Rumaila.
"I don't think Russia should link (debt reduction) with investment in oil," Solagh said.
He said 54 out of 65 countries that had granted loans to Saddam Hussein's regime had agreed to write off Iraq's debt, which amounted to around 140 billion dollars.
"We still have 40 to 50 billion dollars," he said.
On Thursday, Saudi Arabia renewed its commitment to reduce Iraqi debt.
"Realising the strains caused by debt and due to the current circumstances in Iraq, the Kingdom of Saudi Arabia has announced its will to reduce Iraq's official debt," Saudi Foreign Minister Saud al-Faisal said.
The oil-rich Kingdom is expected to forgive 80 percent of its estimated 20 billion dollars in loans to Iraq, but the process will take place in stages in line with Paris Club procedure, Solagh said.
He said he also expected Egypt to cancel Iraq's 800-million-dollar debt.
China has agreed to strike 80 percent of Iraq's eight billion dollars in loans, while Kuwait is awaiting a decision from its parliament to drop the two-billion-dollar debt it is owed, according to Solagh.
Foreign ministers and top diplomats from more than 50 countries are gathered in Sharm el-Sheikh to launch the the International Compact with Iraq (ICI), a five-year plan aimed at stabilising the war-torn country.
The document includes a raft of measures to inject fresh impetus into Iraq's economy, improve governance and offer financial assistance in a process key players hope will bolster reconciliation between warring communities.
Conference pledges 30-bln-dollar debt reduction for Iraq | Iraq Updates