Former Secretary of State Baker Calls Iraq's Debt 'unsustainable'(Says A/R must be solved 2004)

AP ^ | April 1 2004 | Liz Austin Associated Press Writer

[txhurl]

DALLAS (AP) - Iraq's debt is "simply unsustainable" and must be reduced if the country's economy and government are to be rebuilt, former Secretary of State James A. Baker III said Thursday.

President Bush appointed Baker in December to serve as a special envoy in seeking an international deal to lower and refinance Iraq's staggering foreign debt - it owes an estimated $125 billion to other countries, excluding war reparations.

"These debts can never be paid in full, even under the most optimistic circumstances," Baker told about 500 people at a lunch sponsored by the University of Texas at Dallas and the World Affairs Council of Greater Dallas.

Efforts to enforce the debts could "sink the Iraqi economy and, with it, all practical hope for a successful transition to a government of, by and for the Iraqi people," he said.

Several countries have signaled they would forgive some of the debt accumulated by Iraq during the rule of Saddam Hussein.

Saudi Arabia and Kuwait said, however, they would reach deals only with a sovereign Iraqi government. Baker is insisting debt relief must come now.

"It cannot wait, as is the usual practice, until there is a new government in place, or we will never get the job done in the year 2004," he said.

Baker said he plans to begin discussions in the next few weeks regarding the exact amount of debt each country would forgive.

Baker, secretary of state from 1989 to 1992, served under President Reagan as White House chief of staff and then as treasury secretary. He managed Bush's father's 1980, 1988 and 1992 presidential campaigns.

[txhurl]

"It cannot wait, as is the usual practice, until there is a new government in place, or we will never get the job done in the year 2004," he said.

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[eddie willers]

They need to check the trunk of Koffi's car.

[Azzurri]

Any nation who dealt with Saddam should just be told, point blank, that the deals are null and void.

[txhurl]

More or less, he's telling them (and via WHOSE proxy, BTW?) that George may honor some debt agreements, but who knows what Kerry's gonna do to your books.

[AmericanVictory]

Whatever happened to the basic priniciple that debts flowing from contracts obtained by illegal means such as bribery are voidable.

Is Baker capable of taking such a basis stand or is he too much a part of the establishment which created such corruption in a part of the world that runs on "backsheesh?"

[Alberta's Child]

I think Mr. Baker just let the cat of the bag. The U.S. is going to dramatically scale back its military presence in Iraq before the election in November, come hell or high water. And regardless of how unstable the country might be.

[Mad_Tom_Rackham]

Sure. Let's wipe out their debt. It's the least we can do while they are busy killing our soldiers and civilian employees who are providing law and order and rebuilding their infrastructure free of charge.