TITLE

Iraq debts

AUTHOR(S)
Vesely, Milan
PUB. DATE
June 2003
SOURCE
Middle East;Jun2003, Issue 335, p10
SOURCE TYPE
Periodical
DOC. TYPE
Article
ABSTRACT
The article focuses on the economic condition of Iraq after the end of the war between Iraq and the United States. Iraq is a financial shambles. Its debt load is bigger than that of Argentina. Add this to a shaky currency, 50% unemployment, galloping inflation and a crumbling infrastructure. Iraq sits atop of the world's second-largest pool of proven oil reserves, some 112 billion barrels. It also possesses huge deposits of natural gas, with even more still undiscovered. But all this wealth in the ground does not translate into cash, at least in the short term. Iraq's potential earnings during the first two years of the U.S. occupation are estimated at $15-20 billion, depending on world prices and how quick production can be brought on stream. From that income, some $11 billion will be needed for initial government spending on state employee salaries, public health, safety, education, agriculture and welfare programmes. That leaves a surplus of $4-9 billion to finance war damage, infrastructure rebuilding, humanitarian assistance, debt payments, claim settlements and war reparations. Iraq's debt is many times the size of its economy, too highly leveraged to qualify for the World Bank's Third World debt relief programme. Its debt load stands at $16,000 per man, woman and child, its per capita gross domestic product at $2,500. Investment banker Rubar Sandi believes that the international community has no option but to discharge Iraq's past debts if the country is to avoid suffering the same fate as Germany after World War I. Then, crushing debts and hyper-inflation led to resentment and World War II quickly followed. INSET: The French and Russian cards.
ACCESSION #
9993161

 

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