Japan May Forgive Loans to Iraq
China to Consider Granting
Debt Relief to Baghdad;
Paris Club Accord Is Sought
By SEBASTIAN MOFFETT
Staff Reporter of THE WALL STREET JOURNAL
TOKYO -- Japan agreed to forgive the "vast majority" of its loans to Iraq as part of a U.S.-led initiative, as long as other nations also help ease Baghdad's crushing debt burden.
Iraq owes Tokyo $4.1 billion in unpaid loans, making Japan the largest creditor in the 19-member Paris Club of creditor nations. When interest payments are included, the total owed to Tokyo rises to $7 billion, making Japan the second biggest creditor after Russia, which is owed $8 billion. Last week, Russia offered to write off more than half of its debt.
Also Monday, Chinese Premier Wen Jiabao said his country "will consider" reducing debts owed to it by Baghdad. It isn't clear how much Iraq owes Beijing, though the state newspaper China Daily has estimated the figure at "several billion" dollars.
Tokyo's offer and China's promise to consider debt relief were the latest in a series of pledges given to U.S. envoy James A. Baker III, who has been visiting key creditors. U.S. officials argue that debt relief is needed to help revive Iraq's economy, and the former American secretary of state has previously won support for the idea from Germany, France and Russia. Mr. Baker described a Monday meeting with Japanese Prime Minister Junichiro Koizumi as "exceedingly good," adding that they made "very, very good progress."
But a statement from Japan's Foreign Ministry didn't specify an amount, and made the offer conditional on an agreement by the Paris Club. "Japan would be prepared to eliminate the vast majority of its Iraqi debt, if other Paris Club creditors are prepared to do so in the context of a Paris Club agreement," the Foreign Ministry said after the meeting. The statement didn't specify whether the "majority" referred to the principal amount owed to it by Iraq or the total debt.
Iraq owes Paris Club members about $40 billion, and at least $80 billion to Arab countries. Much of the money owed to Japan is tied to hospitals and power stations built by Japanese companies during the 1970s and early 1980s. The Iraqi government later assumed the debts.
Japan already has said it will provide Iraq $5 billion in aid over four years starting during 2004. It also began the first stage of deployment of its Self-Defense Forces on Saturday, when an advance party of 20 Air Self-Defense Force personnel arrived in Kuwait. The first Ground Self-Defense Force troops are expected to arrive there in mid-January.
The troop dispatch is politically sensitive in Japan because of its war-renouncing constitution, and the recent deaths of two Japanese diplomats in Iraq have increased concerns over security there. The dangers were highlighted over the weekend, when two Thais were killed in attacks in the southern city of Karbala.
To provide security for his country's noncombat troops, Thai Prime Minister Thaksin Shinawatra announced Monday the deployment of 30 more soldiers to Iraq. Thailand sent 422 soldiers during September to provide medical services and to help rebuild roads, buildings and other infrastructure destroyed during the war. Saturday's deaths were the first among the Thai force.
"We are sending the additional unit of 30 soldiers to protect the humanitarian unit, which will not engage in combat or fight with the coalition forces,'' he said. He added that Thailand would fulfill its one-year commitment to the U.S., a longtime ally, and would "not run away from a friend."
Meanwhile, Chinese Premier Wen Jiabao said Monday that China, an opponent of the U.S.-led war on Iraq, "will consider" reducing debts owed to it by Baghdad as a humanitarian gesture. Mr. Wen made the announcement after he and Chinese President Hu Jintao met with Mr. Baker, the U.S. envoy Monday.
The Chinese government didn't say by how much it might reduce Iraq's debt. And it wasn't clear whether Beijing received any U.S. concessions in exchange, such as greater access for Chinese companies to Iraqi reconstruction work.
Mr. Wen said "China will consider reducing the debts owned to it by Iraq out of humanitarian concern," the official Xinhua News Agency said. It paraphrased the premier as saying Beijing "fully understands the difficulties of reconstruction in Iraq and the situation of the Iraqi people."
It isn't clear how much Baghdad owes Beijing. The Communist Party newspaper People's Daily said Monday that China was owed about $1.1 billion before the first Gulf War -- mostly for work by two state-owned construction companies. The state newspaper China Daily has put the figure at "several billion" dollars. |
