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[casi] Who profits from erasing Iraq's Debt?

Who profits from erasing Iraq's Debt?

By Heather Wokusch
Online Journal Contributing Writer

July 28, 2003—Outspoken Pentagon advisor Richard Perle recently called for
Iraq's debt to be cancelled as a way of teaching banks about the "moral
hazard of . . . lend[ing] to a vicious dictatorship."

Fair enough. Other countries with "odious debt" incurred under nasty regimes
may be granted debt forgiveness. Why not Iraq?

Why not indeed. A war profiteer like Perle lecturing on morality is doubtful
enough, but who in today's occupied Iraq will really profit from debt
forgiveness, the Iraqi people or companies like Halliburton?

At stake is more than $184 billion of pending contracts and debts against
Iraq, many of which transpired before the 1991 invasion of Kuwait. In other
words, even deals inked when Saddam Hussein was considered a US ally could
now be considered odious debt.

No small coincidence that the countries slated to lose most from an Iraqi
write-off include Russia, France and Germany: Bush's axis-of-just-as-evil
for opposing the recent invasion of Iraq.

But taking Perle's moral high ground for argument's sake, consider that
Chile's Pinochet, Indonesia's Suharto, South Korea's Park Chung Hee, and
yes, Iraq's Hussein were all former recipients of White House largesse. So
much for the US government steering clear of vicious dictators.

And of course, today's "war on terror" has become a gold mine for brutal
regimes of strategic US interest.

Take Uzbekistan. Despite an abysmal human rights record and corrupt
government, the country received $500 million in US funding last year—$79
million specifically earmarked for "torture as a routine investigative
technique." Its proximity to Afghanistan and expanding US military presence
guarantee ever more funding to back the savage Uzbek government, step up
repression and no doubt create the kind of Islamic fundamentalism the US
should be fighting in the first place.

And then there's Pakistan. General Pervez Musharraf seized power in a 1999
coup, stifling opposition and rewriting the constitution to shore up his
dubious power base—not exactly a model of democratic leadership. Regardless,
Pentagon ally Musharraf just left Camp David with $3 billion in fresh US
grants, for things like upping the nuclear war ante with India.

How ironic that dictatorships like Uzbekistan and Pakistan can cash in on
the "war on terror," while fledgling democracies defying Washington's
unilateral excesses are punished. The Bush administration's recent rampage
against the International Criminal Court (ICC) is a case in point: 64
countries receiving US military aid were forced to sign bilateral agreements
exempting US troops from prosecution, or else risk losing the aid. The
Bahamas, for instance, was warned funds would be withheld for paving and
lighting an airport runway, and Caribbean states were told they could lose
hurricane relief and rural dentistry benefits if they didn't support
Washington's attack on the ICC.

In other words, the US government provides funding for "torture as a routine
investigative technique" but not necessarily for hurricane relief. No wonder
they hate us.

The White House is quick to point out that some countries have demonstrated
loyalty to the Bush administration by sending peacekeeping troops to Iraq:
Poland, Ukraine, Nicaragua, and El Salvador among others. Rarely mentioned,
however, is the fact that US taxpayers will be funding this "coalition of
the billing" to the tune of $250 million this year alone.

But who really benefits from massive cash infusions to Iraq, estimated to be
costing US taxpayers $3.9 billion every month? And who would benefit from a
hasty write-off of Iraq's past debt?

There's no doubt the country's in chaos and needs help. Twelve years of
debilitating sanctions have left the population and infrastructure ravaged,
while the recent invasion and aftermath have left thousands dead and
millions unemployed. Meanwhile, attacks against US service members grow more
frequent and bloody every week.

But not everybody's hurting. Halliburton, the Texas oil company tied to US
vice president Dick Cheney, is making a killing on subsidiary contracts to
Iraq, doing everything from repairing oil wells to providing housing for US
troops. Corporate cronies will also benefit from Bush administration plans
to privatize Iraq's 100 state-owned firms, probably at fire sale prices.

No doubt the lack of financial transparency in today's Iraq creates
unprecedented opportunities. Some US firms have already been charged with
bilking millions of dollars in bogus rebuilding contracts, while the
integrity of the US-UK controlled fund slated to recover foreign Iraqi
assets has been called into question.

Clearly, throwing more cash into this mess makes no sense. How long can US
taxpayers shoulder the unilateral burden? What new dictators will be propped
up? What assets and national resources will be privatized away from the
Iraqi people without their consent? How long before they negate today's
agreements as odious?

Bottom line, until a stable government is in place, truly representative of
the Iraqi people, there should be no debt cancellations—reschedulings or
delayed payment allowances perhaps, but no write-offs. Same goes for
privatizations. The Bush administration's secretive, unilateral and
unaccountable approach to finances is among our biggest moral hazards in

Heather Wokusch is a freelance writer. She can be reached via

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