Restructuring and reducing Iraq's official debt

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Restructuring and reducing Iraq's official debt will be the task of James A. Baker III, "long-time family troubleshooter" and former Secretary of State, according to a December 5, 2003, AP news story. President George W. Bush announced that he had called upon Baker "to oversee the job of getting Iraq out from under its crushing $125 billion debt."

In the capacity of his personal envoy, Baker will report directly to the President "'and will lead an effort to work with the world's governments at the highest levels, with international organizations and with the Iraqis in seeking the restructuring and reduction of Iraq's official debt,' Bush said in a statement read by White House press secretary Scott McClellan. ... Bush said he made the appointment in response to a request by the Iraqi Governing Council. ... Baker will serve as a volunteer, working out of an office at the White House and travelling to other countries."[1]

"Iraq's debt carries annual servicing charges of $7 billion to $8 billion. ... Dan Senor, a spokesman for the U.S.-led Coalition Provisional Authority, said in Baghdad that estimates of Iraq's foreign debt range as high as $125 billion. ... Of the total Iraqi foreign debt, some $40 billion is owed to the United States, France, Germany, Japan, Russia and other countries who are among 19 nations belonging to the Paris Club, an umbrella organization that conducts debt negotiations. ... At least $80 billion more is owed to other Arab countries and nations outside the Paris Club."[2]

"Iraq's external debt has been estimated at 120 billion dollars by the International Monetary Fund."[3] "World Bank President James David Wolfensohn has said that at least two-thirds of Iraq's estimated $120 billion foreign debt will need to be written off to rebuild the country properly."[4]

"A senior French official said on [December 4, 2003] that he did not see an easy way to quickly reduce some of Iraq's debt because the U.S.-occupied land was not a sovereign country. ... The official, Foreign Ministry spokesman Herve Ladsous, said members of the U.S.-appointed Iraqi Governing Council may visit Paris in mid-December and that the issue of debt forgiveness would be discussed."[5]

"Treasury officials said [December 5, 2003] that Iraq's debt was somewhere between $100 billion and $120 billion. Of that, some $40 billion is owed to the United States, France, Germany, Japan, Russia and other nations that belong to the Paris Club, a group of industrialized nations that conducts debt negotiations. About $80 billion is owed to Arab nations and others outside the Paris Club.

"The debt does not include as much as $100 billion more demanded in war reparations from countries like Kuwait and individuals who claim damages from Iraq."[6]

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James A. Baker, III as Envoy to Iraq Debt