As this beleaguered nation tots up its accounts payable, Mark Wallace asks whether debt forgiveness from the international community can pave the way to economic restoration.For the Coalition Provisional Authority that has occupied Iraq since the recent war, rebuilding the country’s financial and economic system will prove as difficult as putting back together any of the tattered country’s physical infrastructure. And it will have ramifications that are just as far-reaching – not just for Iraqis but for the international financial community as well.
While the bonds of trade and commerce that were severed by Saddam Hussein and UN sanctions have yet to be re-forged, Iraq remains linked to the rest of the world through its outstanding foreign debt. Dealing with that debt will be one of the thorniest issues that the occupying powers face. Even determining how much debt actually exists is proving difficult. From there, issues will have to be resolved such as who gets paid back in what measure, whose claims take priority, and how to carry the less heavy but still burdensome debt load that will remain after the wrinkles are smoothed.
