Shh ... Iraq (US) owes $200bn war debt
By Ian Williams
There has been a lot of discussion of debt forgiveness for Iraq, but there have also been some interesting, almost forbidden, topics in the debate. Perhaps the least mentioned issue is the reparations of US$200 billion that Iraq allegedly owes, mostly to Kuwait and Saudi Arabia, from the first Gulf War of 1991.
As US envoy James Baker toured the world asking countries like France, Bulgaria Germany and Russia to forgive Iraqi debt, neither he nor Washington has made much noise about the reparations issue, even though, according to a report just submitted by the Congressional Budget Office, in addition to its external debts of up to $128 billion, Iraqi also owes $199 billion in reparations for the invasion of Kuwait.
Last week, Baker did raise the issue with the Kuwaitis, who indignantly rebuffed any suggestion that it would waive its compensation claims. Indeed, Kuwait Foreign Minister Sheikh Mohammad refused even to discuss the issue. With little publicity outside the country, it seems that the Kuwaiti parliament passed a law last year forbidding any relaxation in the reparations, which was assessed at that time at $98 billion. Under the old regime of Saddam Hussein, American diplomats pursued the claims against Iraq with considerable and vindictive vigor, but now the US taxpayer is footing the bill, they are less keen.
Reparations are an old fashioned idea. Most historians see German reparations after World War I as a significant cause of the second. Kuwait seems prepared to live with potential Iraqi resentment and maybe even some American disgruntlement.
So far, Iraq has paid $18 billion in compensation, with the bulk going to Kuwait. The cash came from oil revenues under the United Nations' oil-for-food program. The original cut was 30 percent, reduced then to 25 percent, but after the American occupation the Security Council reduced the amount to 5 percent of oil revenues. However, the Compensation Commission has already agreed on another $30 billion in compensation, once again mostly to Kuwait.
The 5 percent levy remains, according to Security Council resolution 1483, "unless an internationally recognized, representative government of Iraq and the governing council of the United Nations Compensation Commission, in the exercise of its authority over methods of ensuring that payments are made into the compensation fund, decide otherwise, this requirement shall be binding on a properly constituted, internationally recognized, representative government of Iraq and any successor thereto."
In their more aggressively hawkish mode last year, American leaders were demanding that Russia, France and Germany in particular write off all Iraqi debts. It was unfair, the Americans claimed, that the suffering Iraqi people should have to struggle to pay off debts incurred by the tyrant who oppressed them.
Of course, the same people had shown no compunction in insisting on repayment of the billions lent to Nigerian and Zairean kleptomaniacs at Washington's behest, let alone the South Africans repaying the bills run up by the apartheid regime to keep blacks in the townships and Bantustans. But they never mentioned the Kuwaiti reparations, since American tax payers, and the creditor countries together, may want to know why, having liberated Kuwait, they should subsidize the oil rich emirate now.
It is easy to see why there is not much publicity about this unique instance of reparations actually being paid. The US, for example, simply refused to recognize the World Court judgment against it for mining Nicaraguan harbors, although it eventually came to a settlement with the pro-American government that replaced the Sandinistas.
The precedent it sets is dangerous for the region. There is a definite chance of laying a trail for future conflicts between Iraq and Kuwait, but also with Iran. As part of the ceasefire agreement between Iran and Iraq under UN resolution 598, then UN secretary general Perez de Cuellar appointed a commission to determine who started the war. Giandomenico Picco, who was the UN official in charge of it, remembers that the commission was composed of three European historians, who, as well as wanting to remain anonymous, for reasons of personal safety, decided unequivocally that Iraq was the aggressor.
The report was released, very, very quietly, in December 1991. It was inconvenient, not just because Tehran was no one's favorite regime at the time, but also because the Security Council had just ordered Iraq to pay compensation for damages incurred in the war on Kuwait. Picco points out that the 598 commission did not mention compensation, so he is not sure that its results implied reparations. However, nor are the reparations that Iraq is paying the result of any judicial legal process. They result from a decision that the Security Council made, under heavy and vindictive American pressure.
If the Iranians had been less isolated, or had had friends to put their case to, they could surely have argued that they had a claim for reparations, which was both earlier and more ethical than Kuwait's. After all, the $100 billion that the Gulf states now claim for debt from Iraq was spent on attacking Iran.
Saddam's attack on Iran in 1980 was, of course, supported in various forms by Britain, France and the US. The Iranians are aware of this, and recently members of parliament have mentioned sums of $200 billion in reparations. They have a very good claim, legally, and certainly a very embarrassing one for the US, and for Kuwait.
Ironically, as Picco points out, almost the only world leader to reinforce the 1991 commission's finding that Iraq had committed aggression against Iran was one George W Bush. In his speech to the UN in September 2002, the president very clearly put aggression against Iran in the litany of charges against Saddam, to the joy, albeit temporary, of President Mohammad Khatami of Iran, who was sitting in the audience.
While not shouting about the reparations issue, it would appear that Baker at least has it in hand. One suspects that, whether the Kuwaitis like it or not, some part of the final UN resolutions recognizing and admitting a new Iraqi government will abolish the Compensation Commission and renounce any outstanding claims.
(Copyright 2004 Asia Times Online Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)
atimes.com |
