Iraq's debt estimated to be US $103-129 billion

Iraq, which once had outstanding claims against it in the amount of US$ 330 billion, is estimated to have a an external debt between $103.4 billion to $129.4 billion in addition to resolved but unreimbursed compensation claims of $27.3 billion, Richard Segal, a research analyst at London-based emerging market debt trading firm Exotix, told Arabian Business today (April 8).

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By  Massoud Derhally Published  April 8, 2003

Iraq, which once had outstanding claims against it in the amount of US$ 330 billion, is estimated to have an external debt between $103.4 billion to $129.4 billion, in addition to resolved but unreimbursed compensation claims of $27.3 billion, Richard Segal a research analyst at the London-based specialist emerging market debt trading firm Exotix, told Arabian Business today (April 8).

“The debt numbers have been calculated by adding interest and principal accrued since 1990, when the last official figures were released. I provide this estimate as a range, because it is not clear how advances from Kuwait and Saudi Arabia will be treated,” Segal said.

“It will probably take 12-24 months to renegotiate the majority of Iraq's external debt.
Debts may be above the top of our estimated range, but any uncounted debt is probably $10 billion or less,” said Segal. Segal said his figures did not include compensation claims from the Gulf War, which he said are probably going to end up at around US $40 billion.

On the eve of the war in Iraq, Arabian Business interviewed Adnan Pachachi, Iraq’s former foreign minister tipped for a leadership role in post war Iraq. Pachachi told Arabian Business he estimated it would cost US $80 billion to help rebuild Iraq in the first year after the war.

Referring to the US $80 billion figure, Segal said, “The $80 billion figure includes all capital needs, including reconstruction funds. I would agree that reconstruction should take priority over repaying past debt, although renegotiation of these debts will be the fastest route to accessing new loans.”

The numbers for Iraqi debt are disputed, Kuwait and Saudi Arabia made what they say were $30-$35 billion of loans to Iraq but Iraq regarded them as grant payments for its 1980s war against Iran and there is the issue of compensation payments for the invasion of Kuwait, which are still ongoing.

Iraq’s leading creditor is Saudi Arabia, owed $25 billion, Non-Kuwait UAE and Gulf owed $17.5 billion, Kuwait $12.5 billion; the Paris Club (other than France and Russia) owed $9.5 billion, Russia $8 billion and France $8.0 billion.

Commercial bank creditors are owed $2.6 billion, Bulgaria $1.7 billion, Poland the Czech Republic and Romania $1.6 billion, multilateral institutions $1.1 billion, Yugoslavia is owed $0.7 billion plus there are trade claims of $2.2 billion and other claims of $26.1 billion. The total of Iraq’s current external indebtedness comes to US $116.5 billion.

To date, 51,235 of 2.6 million claims against Iraq are still outstanding. The United Nations Compensation Commission (UNCC) has awarded US $44 billion in compensation of which $16.7 billion has already been paid.

If Iraq’s reparation debts to Kuwait are compensated in the same ratio as reconciled claims, said Segal, this would add $14 billion, bringing total net claims to $155-$160 billion.

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