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Donors Unlikely to Bridge Funding Gap for Iraq

THE WORLD

White House offers no estimates for next week's conference. Debt relief is another concern.

October 18, 2003|Sonni Efron | Times Staff Writer

Pakistan has said it would not send troops, and India said Friday that although it welcomed the resolution, any decision to send peacekeepers would depend on the situation in Iraq. In the past, India said it would send troops only under United Nations command.

In Washington, the departments of State and Treasury, as well as the IMF, are working on a comprehensive plan for Iraqi debt relief, officials said. The IMF has been polling its member nations to tally Iraq's total debt but has not published its findings yet.

For The Record
Los Angeles Times Wednesday October 22, 2003 Home Edition Main News Part A Page 2 National Desk 2 inches; 89 words Type of Material: Correction
Iraqi reconstruction -- A story in Section A on Saturday about international pledges for Iraqi reconstruction reported that Bathsheba Crocker of the Center for Strategic and International Studies said she would be surprised if participants in a Madrid conference this week were to pledge more than a combined $1 billion. The story should have clarified that Crocker said she would be surprised if the Bush administration were to raise more than $1 billion in Madrid in addition to the $6.3 billion in international pledges that had already been announced.

In an assessment of Iraqi finances that was issued in January, Crocker and Frederick D. Barton concluded that Iraq owed $383 billion. That consisted of $127 billion in foreign debt, $57 billion in unpaid contracts and the $199 billion in Gulf War reparations. The State Department released its own figures Friday night -- estimating that Iraq owes $100 billion to $125 billion, excluding reparations.

"The numbers on the debt side are so enormous that they would just eat up any revenues that come out of Iraq's oil industry, or any other revenues," Crocker said.

Her estimated $127 billion in foreign debt includes the $21 billion owed pre-1990 to 19 countries in the Club of Paris, a group of creditor nations. Almost all of it is in arrears, and the interest owed is nearly double the principal. The largest creditors are Japan, owed $4.1 billion; Russia, owed $3.5 billion; France, owed $2 billion; Germany, owed $2.4 billion; and the United States, owed $2.2 billion, all excluding interest, according to the Club of Paris.

The club is a logical forum in which the U.S. may plead for debt relief for Iraq. However, the Japanese, Germans and Russians have traditionally been opposed to debt relief, and club rules require such decisions to be unanimous, sources said.

Perhaps even more touchy is the question of whether Washington will pressure Kuwait to forgive the massive war reparations that Iraq owes the emirate for Hussein's 1990 invasion.

"It has been raised with Kuwait," the senior administration official said. "Their attitude is, 'Hmmmm.' It gives them pause." Ultimately, the issue will have to be settled in the Security Council, which authorized the reparations.

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Times staff writer Paul Richter in Washington contributed to this report.

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