Japan will forgive “vast majority” of Iraqi debts
Japan’s Prime Minister Junichiro Koizumi announced Monday that the government would be prepared to eliminate the “vast majority” of its Iraqi debt, if other Paris Club creditors are prepared to do so in the context of a Paris Club agreement.
The announcement came after Koizumi met with US Special Presidential Envoy James A. Baker to discuss Iraq’s $4.1 billion debt to Japan, a figure that is swiftly climbing as a result of late penalties.
According to a press release published by Japan’s Ministry of Foreign Affairs, the state is “committed to provide substantial debt reduction for Iraq in the Paris Club in 2004, and will work closely with other countries including the US to achieve this objective.” The communiqué also stated that precise figures of debt reduction will be negotiated with other members of the international community.
Japan had been reluctant in the past to join the debt relief effort, having already pledged a five billion dollar aid package for the reconstruction of Iraq. Japanese officials recommended that negotiators take into consideration the Arab state’s ability to finance its debts with oil revenues.
Some $40 billion of Iraq’s $120 billion foreign debt is owed to 19 members of the informal Paris Club creditor group. According to the World Bank, at least two thirds of Iraq’s debt must be cut for the Arab state to have a fair chance to rebuild. The nation’s current debt obligations are the equivalent of 10 times the country's normal gross domestic product (GDP). — (menareport.com)
© 2003 Mena Report (www.menareport.com)