10.3 |
Reconstruction: oil, commercial interests, debt relief, asylum and
stabilisation policy
813.
Mr Jeremy
Heywood, Mr Blair’s Principal Private Secretary, passed the US
State
Department
estimates of debt owed by Iraq to Sir David Manning,
Mr Blair’s Foreign
Policy
Adviser, on 25 March.494
Mr Heywood
advised that compensation claims from
Kuwait’s
Government and citizens could add up to US$100bn to Iraq’s
debt.
814.
The
Development Committee of the World Bank Group and IMF agreed at
their
April 2003
Spring Meetings that debt relief for Iraq should be pursued through
the
815.
The Treasury
prepared a paper for the 8 May meeting of the Ad Hoc
Ministerial
Group on
Iraq Rehabilitation (AHMGIR), which considered whether a Paris
Club
agreement
on Iraq would be achievable.496
816.
A Treasury
official advised Mr Paul Boateng, the Chief Secretary to the
Treasury,
in advance
of the meeting that most creditors seemed content with that
approach,
though the
US appeared to be “not fully committed” to the Paris Club
route.
817.
The Treasury
paper stated that three of Iraq’s biggest Paris Club creditors
–
Russia,
France and Germany – had been hostile to the invasion and would be
deeply
disappointed
at the prospect of debt relief.497
There were
also a number of encouraging
factors,
however, including:
•
No creditor
had been paid for more than a decade. A Paris Club deal was
the
only real
prospect of recovering any funds.
•
France, as
Paris Club chair, would find it hard to resist a Paris Club
deal.
•
Many
creditors would be keen to exploit new commercial opportunities
which
would
require a regularisation of the debt position.
818.
A Treasury
official briefed Mr Brown on progress in securing debt relief
for Iraq
on 17
November, in advance of a meeting the following day with
Mr John Snow, the US
Secretary
of the Treasury.498
819.
The official
warned that the US was becoming impatient with the pace of
progress
in the
Paris Club and concerned over the US’s lack of control over the
process; a poor
outcome
could leave Iraq with an unsustainable debt burden. The UK
continued to
believe
that the most effective way to achieve debt relief was through the
Paris Club.
494
Minute
Heywood to Manning, 25 March 2003, ‘Iraq: Debt’.
495
Minute
Treasury [junior official] to Chief Secretary, 7 May 2003, ‘Ad Hoc
Ministerial on Iraq
Rehabilitation,
Thursday 8th
May at
2.30pm’.
496
Annotated
Agenda, 8 May 2003, Ad Hoc
Group on Iraq Rehabilitation meeting attaching Paper
Treasury,
April 2003, ‘Iraq: Debt’.
497
Paper
Treasury, April 2003, ‘Iraq: Debt’.
498
Minute
Habeshaw to Chancellor, 17 November 2003, ‘Iraq: International
Debt’ attaching Paper
Treasury,
[undated], ‘Chancellor – Secretary Snow: Iraq: International Debt’
and Paper Treasury,
17 November
2003, ‘Iraq: International Debt’.
495