Russia, France and Germany out Billions?

While biased with a western slant, I believe this
article is basicly truthful....thoughts and comments?

BIZNETDAILY COMMENTARY
Russia, France left holding the bag
Iraq's creditors out of luck

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Posted: April 15, 2003
1:00 a.m. Eastern

Iraqi Debt—a 300 billion dollar empty bag!

As American and British troops consolidate the victory in Iraq, the focus is now turning to the future—rebuilding a devastated country and establishing a free government.

Overhanging the future is 120 billion in foreign debt, 60 billion in current pending contracts, and an expected additional 150 billion due in war reparations from the past. With future oil revenues of 20-25 billion per year, the debt is unmanageable. After oil field expenses, an amount of only about 10 billion dollars is available for rebuilding and debt payments.

Interestingly enough, about 50 billion of that is owed to other Middle East countries, loaned before the invasion of Kuwait with the balance being run up after the first Gulf War.

Russia, however, leads the debt parade with an estimated 70 billion owed for pending contracts and past debts, followed by France and Germany. You have to question the business judgment of doing that much business on credit with Iraq and Saddam Hussein!

From a business perspective, loaning this much money to a country with only oil revenue was imprudent at best. The money could not have been repaid. Add on the evident political risk of investing in Hussein’s Iraq and you must wonder what the banks, businesses, and countries were thinking.

The current screaming by France, Germany, and Russia for a UN leadership role is really a call for control over Iraqi future revenues to pay back as much of the loans as possible.

The world market has already discounted the value of Iraqi debt, paying about 17 cents on the dollar for their debt. The simple answer is for Iraq to declare bankruptcy, like any other business or individual, and pay 10-15 cents on the dollar and move forward. The losers would be those who were foolish enough to extend ridiculous amounts of credit.

The loans helped prop up the corrupt and oppressive regime. All prudent lending standards were ignored and now it is time to let those who participated in Hussein’s party hold the empty bag themselves, not balance these debts unjustly on the backs of a liberated people or the U.S. treasury.

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Steve Marr is the former CEO of the fourth largest import-export firm in the U.S.



I edited out a couple of advertisements that I thought might have been offensive.

Edit: I am also sure that the USA has invested unwisely in the past as well as these countries, but the issue at hand right now is current day iraq not the historical past.

[ 04-16-2003, 02:52 PM: Message edited by: MagiK ]

[Thoran]

Agreed with the unwise investing... the US has written off a whole lot of debt in the past. This is a tricky situation though, it's going to take some sort of concensus for the new Iraqi government to be recognized and legitimized on the world stage. If that new government defaults on those loans (with or without US encouragement) it will create unhappy campers all over the place.

Of course IMO that won't really stop them from buying Iraqi oil... so in a sense they're somewhat empty threats, but they can make it hard to gain international financing for reconstruction.

Thoran, that last bit about reconstruction, they should not need to borrow to reconstruct, they should be able to sell their oil to pay the costs. As long as the profits from those sales are not going into the palaces of a dictator, they should only have normal levels of governmental corruption to deal with.

[pritchke]

they should be able to sell their oil to pay the costs

Iraqi should Pay with their oil for damage inflicted by coalition bombs???

So say I took, a bat, and golf club to your car because you parked to close to me and blocked me in and I needed to get in your locked car to move it. By that logic you should have to sell off some of your belongings to pay for the damage I caused to your property and I would not have to pay anything.

[ 04-16-2003, 04:15 PM: Message edited by: pritchke ]

Pritchke, you are being ludicrous, if I had killed your mother and then you took your golf club to my car...THEN I could see your point and you would probably win.

The Iraqi's need to use their wealth (oil) to pay for the excesses of the former evil regime (one that the general populace really didn't work to get rid of). It was not the Coalition that made it necessary for the war to take place. Had saddam disarmed in accordance with the UN resolutions and had they not harbored terrorists, the Coalition would not have bombed anthing.

Edit: Also reconstructing does not consist of ONLY bomb damage repair..it consists of building a government, building an economy, investing in education for the citizens, building infrastructure that did not exist before....and a ton of other things....all this is needed to make Iraq a strong, viable independant government.

[ 04-16-2003, 04:22 PM: Message edited by: MagiK ]

[Spelca]

Originally posted by MagiK: Pritchke, you are being ludicrous, if I had killed your mother and then you took your golf club to my car...THEN I could see your point and you would probably win. The Iraqi's need to use their wealth (oil) to pay for the excesses of the former evil regime (one that the general populace really didn't work to get rid of). It was not the Coalition that made it necessary for the war to take place. Had saddam disarmed in accordance with the UN resolutions and had they not harbored terrorists, the Coalition would not have bombed anthing.

Yea, maybe his example was a bit strange... But what you're saying is that the Iraqi population is guilty of everything so they should pay for it all. Well, they didn't blow up the buildings... And isn't this war (NOW) supposed to be about humanitarian help? About overthrowing an evil regime, and helping the people? What is so humanitarian about making them pay for the damages caused by the Coalition bombings? The Coalition should at least help, if not pay for the damages...

[Spelca]

Originally posted by MagiK: Edit: Also reconstructing does not consist of ONLY bomb damage repair..it consists of building a government, building an economy, investing in education for the citizens, building infrastructure that did not exist before....and a ton of other things....all this is needed to make Iraq a strong, viable independant government.

Sorry, the message before was posted before this edit. [img]smile.gif[/img]
Well, I agree that building a government and things like that should be paid by the Iraqis... But their own government. While the others decide for them, the bills should go to them. As soon as they get their first elections, then they can start paying with their own. [img]smile.gif[/img]
But what I meant by "damages" was the infrastructure and buildings which were destroyed because of this war. They should be rebuilt by the Coalition, since they would probably still be there if not by the bombings.

[ 04-16-2003, 04:33 PM: Message edited by: Spelca ]

[pritchke]

Originally posted by MagiK: Pritchke, you are being ludicrous, if I had killed your mother and then you took your golf club to my car...THEN I could see your point and you would probably win. The Iraqi's need to use their wealth (oil) to pay for the excesses of the former evil regime (one that the general populace really didn't work to get rid of). It was not the Coalition that made it necessary for the war to take place. Had saddam disarmed in accordance with the UN resolutions and had they not harbored terrorists, the Coalition would not have bombed anthing. Edit: Also reconstructing does not consist of ONLY bomb damage repair..it consists of building a government, building an economy, investing in education for the citizens, building infrastructure that did not exist before....and a ton of other things....all this is needed to make Iraq a strong, viable independant government.

building a government, investing in education for the citizens, building infrastructure that did not exist before - These things will come after and yes you are correct the Iraqis should pay for them, anything that needs to be replaced however that was destroyed by war the freedom forces should pay for and I did say needs (electrical grids, water, sewage, damaged bridges and roads), whoever breaks it fixes it.

as far as economy I am pretty sure we destroyed that long before this war. It will not take much to get their economy booming again.

[Thoran]

Saddam broke it... and I hate to say it but he's left the bar and the tab needs paying.

I don't believe the coalition should be required to pay a cent for Iraqi reconstruction, and an argument could be made for war reparations TO coalition countries for equipment and lives lost in the operation. I doubt this issue would be pressed of course, but I do expect that international contracts for rebuilding will go primarily to coalition countries. I'm sure the value of these contracts will more than compensate coalition coutries over the long term.

I agree with Thoran, don't expect the termite exterminator to pay for the damage done by the termites dude.