Why the Iraqi war might lead to cancelled debts
By Romilly Greenhill

Radical Economics, March/April 2003

I am not in favour of war in Iraq. Far be it from me to support destabilising military action with scant international legitimacy - action which looks set to breed more hatred and terrorism, not less.

But the Iraqi war could raise some interesting conundrums for global leaders, conundrums which may, in the end, help in the struggle to cancel unjust and unpayable debts. For, as Lawrence Solomon recently reported in the Canadian National Post, Iraqi exiles, meeting in Washington, have declared that they will not honour Saddam Hussein’s ‘odious’ military debts if they come to power in a post-war Iraq.

Who can blame them? Have we not heard, time and time again, of the destruction that Saddam has wrought on his own people? Do we not all know how he uses military might quell opposition and repress dissent? Why, in a civilised world, should those that bear the brunt of this violence also bear the costs of the weapons that have been used against them?

For the US and UK, in particular, the pressure to declare Saddam’s war debts ‘illegitimate’ will be great – not least because, unlike Russia and France, they are not Iraq’s largest creditors. The US and UK may also – rightly – fear that forcing Iraq to siphon resources away from post-war reconstruction and into the hands of western creditors could prolong the instability that will inevitably follow ‘regime change’.

But if Iraq’s odious debts are deemed illegitimate, this could open the floodgates for other countries to make the same claims. Why should the people of DR Congo pay back the $5bn of debt wracked by kleptocratic, murderous Mobuto Ssese Seko, a debt which is almost twice her total yearly income? Why should the Indonesian’s repay money borrowed – including from the UK – for the hawk jets used to oppress them by former President Suharto? Why should Nigerians and Argentineans repay debts wracked up by their own brutal military rulers? Why indeed?

As I say, I do not support war. But maybe, just maybe, the new Iraqi regime will force its creditors to take it seriously. And if so, other countries may be taken seriously too. Could the storm clouds of war have a silver lining, after all?