Iraq, War, Debt and the G8

Some days after the beginning of the invasion of Iraq by the American, British and Australian forces, George W Bush gave an estimate to Congress that the cost of the war for the US Treasury would reach 80 billion dollars. According to the UNDP and UNICEF, that is precisely the annual sum needed to guarantee for the whole planet universal access to drinking water, basic education, primary health care, a decent food supply and gynaecological and obstetric treatment for all women. The US government achieved the feat of raising and spending this amount in several months - a sum which no world summit in recent years has succeeded in bringing together (in Genoa in 2001 the G7 only managed to raise a little less than one billion dollars for the funds for combating AIDS, malaria and tuberculosis). The 80 billion obtained by Bush from Congress is the amount necessary to destroy Iraq and guarantee an occupation of its territory until 31st December 2003. Apparently the financial costs of the damage inflicted by this intervention have not been taken into account.

This neo-colonial aggression once again made use of a humanitarian pretext: the wish to offer the Iraqi people a democratic regime and to save humanity from weapons of mass destruction. This pretext is one more in the long list of humanitarian justifications used to cover up disgraceful operations of territorial conquest and economic rape and pillage. From the evangelisation of the Americas by the conquistadors to the fight against terrorism, via the fight against slavery which screened Leopold II’s colonial campaign in the Congo….

Who will really pay the price of this aggression? The war was not yet over when the finance ministers of the 7 most industrialised countries met in Washington on 10th/11th April 2003 to prepare the Spring meeting of the World Bank and the IMF and the annual G8 summit (due to take place in Evian, France at the beginning of June). They agreed to set Iraq’s foreign debt at 120 billion dollars, higher than that of Turkey (which has almost three times the population of Iraq). This does not include the compensation owed by Iraq for the invasion of Kuwait in 1990. If the finance ministers of the G7 are to be believed, were this compensation taken into account, Iraq’s debt would be increased to 380 billion dollars. Post-Saddam Iraq would thus have the unhappy privilege of being the most indebted country in the Third World, far surpassing Brazil, which currently holds the record of 230 billion dollars. The arbitrary agreement on this amount is directly aimed at justifying the take-over of Iraq’s oil resources on the pretext of ensuring the repayment of the debt. Fixing the debt so high has the enormous advantage of subjecting the new Iraqi authorities to the demands of the creditors for decades. Even if the military occupation were of limited duration, and even if the UN undertook the management of reconstruction, the country’s politics would still be determined by the creditors and by the oil multi-nationals which will obtain the concessions.

This is why the demand to cancel Iraq’s foreign debt is not only legitimate but also a condition sine qua non for re-establishing Iraq’s sovereignty after the ignominious military aggression which it has suffered. In international law, the doctrine of odious debt can be applied perfectly to Iraq. According to this doctrine, "if a despotic power (= Saddam Hussein’s regime, Ed.) contracts a debt that is not used to meet the needs and interests of the State, but to strengthen the despotic regime and oppress the population which opposes it, this debt is odious to the population of the State as a whole. This debt is not binding for the nation; it is the regime’s debt, a personal debt of the authorities which contracted it. Consequently, it becomes null and void with the fall of the regime." (Alexander Sack, Les effets des transformations des Etats sur leurs dettes publiques et autres obligations financières, Recueil Sirey, 1927). The USA have applied this doctrine at least twice in the past. In 1898, after their victorious attack on the Spanish Armada off the coast of Cuba to "liberate" Cuba from Spanish domination, the US government used it to get Madrid to give up its financial claims on Cuba.

25 years later, in 1923, the US Supreme Court rejected the claims of the creditors of Costa Rica after the fall of the dictator Tinoco |1| , arguing that they should be addressed to the deposed dictator and not the new regime. In 2003, you can bet that the members of the G8, not only the four who supported the war (USA, UK, Italy, Japan) but also the four who were opposed to it (Germany, France, Canada, Russia) will come to an agreement not to apply the doctrine of "odious debt" to Iraq.

It is up to the movement for an alternative globalisation to promote the demand for cancellation of Iraq’s foreign debt, along with other demands such as the withdrawal of the occupying forces, the payment of reparations to the Iraqis for the destruction and pillage caused by the war started by the US/UK/Australian Coalition, and the full and complete exercise of sovereignty by the Iraqis themselves (including the benefit of their natural resources).

Clear differences divided the members of the G8 before the beginning of the aggression against Iraq. They will undoubtedly try to minimise their differences and unite again, ready for the next stage in pushing neo-liberal globalisation even further. They will try to reach agreement on tackling the global financial crisis (rampant stock market crashes, financial instability, massive debts in the private sector in the most industrialised countries) and on their approach to the inter-ministerial meeting of the WTO, planned for the beginning of September 2003 in Cancun (Mexico). They have learnt the lesson of Seattle: they are aware that the lack of an agreement between the USA and the EU on a commercial agenda could lead to the failure of Cancun. They will be meeting in Evian from 1st to 3rd June 2003 to harmonise their points of view.

The alternative globalisation and anti-war movements will be there too.