10.3 |
Reconstruction: oil, commercial interests, debt relief, asylum and
stabilisation policy
800.
The FCO
Directorate of Strategy and Innovation (DSI) one-page paper
‘Vision
for Iraq
and the Iraqi People’, which was submitted to the Ad Hoc Group on
Iraq on
11 October,
listed actions that the UK/Coalition would take to help the Iraqi
people,
including
“encouraging generous debt rescheduling”.485
801.
In advance of
the first round of US/UK/Australia talks on post-conflict
issues
on 6
November 2002, the Cabinet Office produced a paper synthesising
work being
undertaken
by departments.486
That paper
identified the need for debt rescheduling
to reconcile
Iraq’s “huge external debts with reconstruction and development
needs”.
802.
During the
talks, the US agreed that Iraq would require debt
rescheduling.487
803.
On 11 February
2003, a Treasury official invited Mr Brown’s comments on
officials’
“first
thoughts” on Treasury policies in a post-Saddam
Iraq.488
The
official identified the
Treasury’s
“two main Finance Ministry interests” in Iraq as ensuring its
prosperity and
stability,
while fairly sharing the costs of achieving this. An “emerging
policy position”
would
include:
“… push for
debt rescheduling, to ensure that Iraqi contributions [to
its
reconstruction]
are not knocked off course by having to resume crippling
debt
service.
The cost of this would conveniently fall to probable
non-combatant
countries.”
804.
The official
advised that although it was difficult to gauge the size of Iraq’s
debt, the
US State
Department estimated that, as at 2002, Iraq owed around US$82bn to
external
creditors.
The State Department estimated that the four largest creditors
were:
•
Russia
(US$16.1bn, or some 20 percent of the total external
debt);
•
France
(US$9.1bn, 11 percent);
•
Japan
(US$9.1bn, 11 percent); and
•
Germany
(US$6.7bn, 8 percent).
The State
Department estimated that the US was the sixth largest creditor
(US$4.4bn,
5 percent)
and the UK the tenth largest creditor (US$2.4bn, 3
percent).
805.
The official
commented that if those figures were accurate, Iraq was one of
the
most
heavily indebted countries in the world.
485
Paper FCO
[draft], [undated], ‘Vision for Iraq and the Iraqi
People’.
486
Minute
Drummond to Manning, 1 November 2002, ‘Iraq: Post-Saddam’ attaching
Paper Cabinet Office,
[undated],
‘Iraq: Models and some questions for post-Saddam
government’.
487
Minute
Drummond to Manning, 8 November 2002, ‘Iraq: Day
After’.
488
Minute
Treasury [junior official] to Chancellor, 11 February 2003, ‘HMT
Policy on Post-Saddam
Iraq’
attaching
Paper Treasury, 11 February 2003, ‘Post-War Iraq: International
Financing Policy’.
493