Thursday, May 03, 2007
Iraq wins some debt relief at Sharm el-Sheikh
Conference
(Reuters) - Iraq won a trickle of debt relief pledges at a big international conference in Egypt on Thursday and the United States prepared for the highest-level contact with Syria in more than two years. Egypt and three East European countries agreed to waive debts owed by Iraq as part of an International Compact to support Iraqi institutions in exchange for political and economic reforms by the Baghdad government.
The first day of the two-day conference in the Red Sea resort of Sharm el-Sheikh is dedicated to the International Compact, a five-year plan to restore stability and economic prosperity through national reconciliation. But much of the attention is on whether the United States will abandon its longstanding reluctance to hold high-level talks with the Iranian and Syrian governments, as recommended by the Baker-Hamilton commission on Iraq last year.
In his opening speech to the two days of meetings in Egypt, Iraqi Prime Minister Nouri al-Maliki appealed for debt relief. "We call on everybody participating in this conference to write off the accumulated debts of Iraq," he said. Iraq sits on the world's third-largest proven crude oil reserves but is struggling to rebuild after four years of war.
Iraqi Finance Minister Bayan Jabor said the three Eastern European countries -- Slovenia, Bulgaria and Poland -- would agree to forgive 80 percent of Iraqi debt but did not say how much that would be. He said the European Union would grant Iraq $200 million, and he expected grants from some Asian countries as well. But James Dobbins, an analysts at the RAND Corporation, said debt relief was of secondary importance because the Iraqis are not paying off the money they owed anyway.
"It is a purely paper transaction. It's symbolic but it doesn't have any immediate effect," he said. Jabor said that Iraq had rejected as unacceptable an offer from Russia to forgive the debt it is owed by Baghdad in return for access to a major Iraqi oilfield. "The Russians are hesitant. They want investment in the Rumaila oilfield in return for eliminating the debt," he said. When Saudi Arabia announced last month that it was writing off 80 percent of the more than $15 billion it was owed by Iraq, Jabor estimated his country's debt at $140 billion.
The first day of the two-day conference in the Red Sea resort of Sharm el-Sheikh is dedicated to the International Compact, a five-year plan to restore stability and economic prosperity through national reconciliation. But much of the attention is on whether the United States will abandon its longstanding reluctance to hold high-level talks with the Iranian and Syrian governments, as recommended by the Baker-Hamilton commission on Iraq last year.
In his opening speech to the two days of meetings in Egypt, Iraqi Prime Minister Nouri al-Maliki appealed for debt relief. "We call on everybody participating in this conference to write off the accumulated debts of Iraq," he said. Iraq sits on the world's third-largest proven crude oil reserves but is struggling to rebuild after four years of war.
Iraqi Finance Minister Bayan Jabor said the three Eastern European countries -- Slovenia, Bulgaria and Poland -- would agree to forgive 80 percent of Iraqi debt but did not say how much that would be. He said the European Union would grant Iraq $200 million, and he expected grants from some Asian countries as well. But James Dobbins, an analysts at the RAND Corporation, said debt relief was of secondary importance because the Iraqis are not paying off the money they owed anyway.
"It is a purely paper transaction. It's symbolic but it doesn't have any immediate effect," he said. Jabor said that Iraq had rejected as unacceptable an offer from Russia to forgive the debt it is owed by Baghdad in return for access to a major Iraqi oilfield. "The Russians are hesitant. They want investment in the Rumaila oilfield in return for eliminating the debt," he said. When Saudi Arabia announced last month that it was writing off 80 percent of the more than $15 billion it was owed by Iraq, Jabor estimated his country's debt at $140 billion.
Labels: Bayan Jabor, Bulgaria, debt relief, Egypt, International Compact with Iraq, Poland, Rumaila field, Russia, Sharm al-Sheikh Conference, Slovenia
