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(1) European Parliament & Iraq; (2) UN Compensation Fund


In response to Ornella's question "Any ideas?", one that comes to mind is to
have someone summarise the report for this discussion list.  Having done
that, we can compile a list of questions or statements.  Members of the list
can then direct them to their MEPs.  Ideally they would be sent to MEPs with
some request for action ("please inform..." or "please vote for...", etc.).

I, unfortunately, don't have time to do any of this, but if someone had a
chance to read and summarise the report that could start things.


I've performed some calculations using the data presented in (27 June 2001) to estimate the
outstanding liabilities that Iraq will face under the compensation process.
To do so, I have extrapolated linearly from the past: that is, I have
assumed that the ratio of dollars awarded to dollars claimed will continue
into the future.

I've done this in two ways, which I call "unconditional" and "conditional":

(i) The unconditional approach uses one ratio, that of the total
compensation awarded to date relative to that sought in the claims processed
to date.  Applying this to the compensation sought by unprocessed claims
yields $71 billion.

(ii) The conditional approach calculates ratios for each category of claim.
It then applies each ratio to that category's outstanding claims.  The
figures for each category are then summed for a total of $75 billion.

In my view, the conditional approach is a better one as it uses information
contained in the categories about the extent to which settled claims differ
from future claims.  To explain, the data table shows that category A, B and
C claims are completely resolved; further, in all three cases, the award
ratios are higher than those in the categories with claims outstanding.
Therefore, a technique that applies estimates future claims by treating all
of the past equally, may be misleading.  In any case, the two techniques
yield similar results.

I have made one inference about the data available on  The table presented there contained a 0
in the cell corresponding to compensation sought by F4 claims resolved.
This is clearly incorrect: 105 F4 claims for $0 each would not have been
submitted.  I replaced this value with $700 million by assuming that the
total value of F4 claims had not changed since 29 May 2001 ('s
cached version of the UNCC page has this version).  This inference leaves
open one small question: four claims seem to have disappeared between May
and June.  I've notified the UNCC's webmaster about the error and will
provide an update on these calculations when it is fixed if there is a
significant difference.

Finally, the above allows an estimate of outstanding payments.  Iraq
certainly owes $23 billion (the difference between that awarded to date, and
that paid) and, according to the estimate above, will owe another $75
billion.  These sum to $98 billion.  To this must be added the foreign debt
acquired by Iraq prior to 1990, estimated to now be worth about $120 billion
(see  In sum,
these amount to about $218 billion, or about $9,000 per Iraqi.


Colin Rowat

work | 269 Mercer Street, Room 710 | Department of Economics | New York
University | New York, NY 10003, USA | (212) 998 8939 | |

home | 116 W. 226 St. | Bronx NY 10463, USA |
tel/fax | (917) 517 5840 (mobile) | (707) 221 3672 (fax) | (SMS)

autumn | Department of Economics | The University of Birmingham |
Birmingham, B15 2TT, UK

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