The Report
of the Iraq Inquiry
794.
In response to
demand from UK companies, UKTI now had four staff in
Baghdad
and a
“senior trade diplomat” would arrive in mid-2009.
795.
The briefing
for the Iraq leg of the visit provided by the British Embassy
Baghdad
advised:
“With our
[the UK’s] effort now refocusing on support for UK investors
and
developing
the bilateral business relationship, UKTI are resuming lead
responsibility
and are
increasing their presence in country.”482
796.
The Treasury
was the lead department within the UK Government on securing
debt
relief for
Iraq.483
It worked
closely with the Foreign and Commonwealth Office (FCO)
and
other
departments.
797.
The UK’s
‘Contract with the Iraqi People’, which was developed between
February
and
December 2001, included an objective “to facilitate Iraq’s access
to financial
markets by
encouraging generous debt rescheduling through the Paris Club”
(see
Section
6.4).
798.
The Paris Club
describes itself as an informal group of official creditors whose
role
is to find
coordinated and sustainable solutions to the payment difficulties
experienced
by debtor
countries.484
The Paris
Club only negotiates debt restructurings with debtor
countries
that:
•
need debt
relief: debtor countries are expected to provide a precise
description
of their
economic and financial situation;
•
have
implemented and are committed to implementing reforms to restore
their
economic
and financial situation; and
•
have a
demonstrated track record of implementing reforms under
an
International
Monetary Fund (IMF) programme.
799.
A Treasury
official sent Mr Gordon Brown, the Chancellor of the
Exchequer,
a paper
on the global, regional and local (Iraqi) economic impact of “war”
in Iraq on
6 September
2002. The paper identified the urgency of dealing with Iraq’s
“huge”
external
debt, and suggested that a generous Paris Club deal would be the
“obvious”
way to
address it. The Russians might be a major stumbling block, given
the size
of Iraq’s
debt to them (around US$8bn, or 15 percent of Iraq’s total external
debt).
The paper
is considered in detail in Sections 6.4 and 13.1.
482
eGram
11967/09, [undated], ‘Iraq: Lord Mandelson’s visit to Baghdad and
Basra: Scenesetter’.
483
Paper
Treasury, 2010, ‘Iraq Briefing – Debt’.
484
Paris Club
website, About us:
The six principles.
492