Countries Resist Total Debt Relief
By Robin Wright
Washington Post Staff Writer
Wednesday, April 25, 2007; A13
U.S. and Iraqi efforts to win international support to help stabilize Iraq are running up against serious obstacles, with key countries balking at provisions for debt relief and others concerned about blanket endorsement of an Iraqi government that has failed to follow through on many political promises, according to sources involved in the negotiations.
Kuwait, Russia, China, Iran and other governments are concerned about signing a proposed resolution that calls for 100 percent debt relief for oil-rich Iraq, given the tens of billions of dollars each country is owed in debt or in war compensation by Baghdad.
The proposed resolution, obtained by The Washington Post, is designed to endorse the new International Compact for Iraq -- a five-year plan covering political, economic and social development in the war-torn country. The compact is the product of almost a year of negotiations. It will be the subject of a May 3 meeting of all major countries and institutions involved in Iraq, to be held in the Egyptian resort of Sharm el-Sheikh.
The next day, Iraq's neighbors and members of the international coalition in Iraq will discuss efforts to stabilize the country. But differences have also emerged on a second draft resolution for the May 4 meeting, with Egypt and Kuwait proposing different versions, according to sources involved in the conference.
The resolution on the International Compact includes the same kind of conditions inherent in the U.S. decision to deploy more troops this spring in Iraq. The government of Prime Minister Nouri al-Maliki must commit to take long-delayed actions, including political reconciliation, constitutional amendments, disbanding of militias, easing of a ban on former Baath Party members and passage of a law to ensure equitable distribution of Iraq's oil wealth.
But four months after President Bush unveiled a new U.S. military strategy, most of those steps have yet to be taken, provoking concerns by the international community about their own commitments to Iraq. Some Sunni governments are also reluctant to aid or endorse a Shiite-dominated government that has failed to make inroads in winning over Iraq's Sunni minority four years after the fall of Saddam Hussein, Middle East officials say.
In the run-up to the two critical meetings, senior U.S. and Iraqi officials are engaged in intense diplomacy to win endorsements for the conference resolutions. Maliki, Foreign Minister Hoshyar Zebari and other Iraqi officials are planning trips throughout the region. State Department Iraq coordinator David M. Satterfield has been in the Middle East for more than a week seeking support from Iraq's neighbors.
"This is anything but a blank check," said an Iraqi source close to the compact. "International assistance sought will be conditional on Iraq delivering."
A State Department official said yesterday that Iraq's promised political reforms and the world's economic relief should move in parallel. "There is ability to monitor progress on each side," he said on the condition of anonymity because diplomacy continues behind the scenes.
Most but not all governments holding Iraqi debt are willing to discuss forgiving up to 80 percent, but the difference totals billions of dollars. Russia, Kuwait and China have resisted the most, sources say.
Kuwait and Iran claim billions in compensation for damages incurred during Iraq's invasions in the 1980s and 1990s. Both countries also face internal political challenges in forgiving what Iraq owes, due to ongoing sensitivities about the lives lost and physical destruction suffered.
Iraq's 1990 invasion of Kuwait produced widespread damage to the little city-state as well as its oil fields. "Nobody in Kuwait approves" of complete debt relief, al-Watan newspaper columnist Nabil al-Fadhl told the Associated Press yesterday. "This is huge money, it will be at the expense of development of our country."
Iran fought an eight-year war with Iraq in the 1980s that resulted in hundreds of thousands of casualties. Tehran claimed some $100 billion in damages.