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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Lou Weed who wrote (94666)	4/18/2003 6:50:18 PM
From: Bill Ulrich	Respond to of 281500

re: "How accurate is this list is the next question?? It even states..." If all the economists were laid end to end, they would not reach — a conclusion. Some interesting debt comments from "The Economist" article I posted a few days ago: ______ economist.com An equally urgent priority will be to settle Iraq's external financing position. It faces massive financial claims from other countries, first over its Saddam-era debt and second over its Saddam-era reparations bill. If Iraqi oil is to generate a sufficient flow of finance to pay for reconstruction, this burden must be reduced. The repayment of some Iraqi debt, despite regime change, is crucial to rebuilding Iraq's credibility Outstanding debts are probably best handled by rescheduling via the London and Paris Clubs. If those measures do not go far enough, Iraq would obviously not qualify for debt forgiveness under HIPC, a World Bank initiative to help highly indebted poor countries. But precedents exist for debt forgiveness on political grounds, as some of Poland's was forgiven in the early 1990s. The repayment of some Iraqi debt, despite regime change, is crucial to rebuilding Iraq's credibility in international credit markets. The payment of war reparations is not. Its $200 billion liability arises exclusively from Saddam's expansionist activities. The case for continuing to punish the Iraqi people for the sins of their unlamented dictator is a poor one, as Keynes so eloquently demonstrated in Germany's case at the end of the first world war. This mixture of rescheduling and forgiveness will allow Iraq to return to international capital markets to raise the cash for reconstruction. Unlike many countries where regimes have changed, its copious reserves of oil should guarantee plenty of willing lenders. Managing this resource and using the revenues wisely are the next big challenges. ______ (The rest of the article is well worth a read, too, discussing legal system modifications, currency pegging and other issues pertinent to successful reconstruction)