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Iraqis to Discuss Debt With G-7, IMF
The top finance officials from Iraq and Afghanistan will meet next month with their counterparts from the worldâs seven leading industrial countries and Russia to report on progress in reconstruction. The Iraqi and Afghan officials will make presentations at the Feb. 6-7 meeting in Florida of finance ministers and central bank presidents from the Group of Seven nations. Treasury Undersecretary John Taylor told reporters there would be a special session on Feb. 7 devoted to reconstruction issues and to a donorsâ conference set for the spring for Afghanistan.Time to get specific after Bakerâs trip. Afghanistanâs debt will be discussed, he said. But it has not been decided if the U.S.-led effort to forgive a substantial part of Iraqâs estimated $120 billion debt will be addressed, he said, because the presidentâs special envoy on the matter, James A. Baker III, was still involved in discussions with various countries. Baker will not attend the Boca Raton meeting, Taylor said. Wonder if his briefcase will attend? He said the negotiations over Iraqâs debt were on track toward reaching an agreement on debt relief by yearâs end. Iraqâs finance minister, Kamil Mubdir al-Gailani, and the head of the countryâs central bank, Sanan al-Shabibi, will attend the meeting. So will their Afghan counterparts - Ashraf Ghani and Anwar Ul-Haq Ahady. Taylor said the G-7 countries were anxious to hear about the progress toward establishing a sound monetary policy that will guard against inflation and provide a firm underpinning for economic development. As opposed to in Europe. The discussions with Iraq will focus on what the country still needs to do in order to secure reconstruction loans from the International Monetary Fund and the World Bank. At a donorsâ conference for Iraq last year, the IMF indicated it would be able to provide around $4.25 billion in loans over the next several years and the World Bank said it had a target of between $3 billion and $5 billion in assistance. Erk. Am I alone in mistrusting the IMF and World Bank when they consider handing out large wads of cash to an emerging country? World Bank President James Wolfensohn said last year that the United States and other rich nations would need to forgive two-thirds of Iraqâs debt burden for the country to have a chance at economic recovery. Iraq owes about $40 billion in debt to the G-7 countries and other rich nations. An additional $80 billion is owed to various Arab governments. Just might be better for Iraq to forego most of the loans and concentrate on financing what they can on the oil sales. Keep the bankers at armâs length for a while and let the politics settle down. Posted by: Steve White 2004-01-29 |
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