Iraq asks neighbors for debt relief
TEXT OF STORY
Kai Ryssdal: There was an international conference on Iraq today. At the meeting in Stockholm, Sweden, Iraqi Prime Minister Nouri al-Maliki asked his Arab neighbors for a little bit of relief: He wants more than $60 billion dollars in debt forgiveness.
For the most part the answer was a polite “no,” but Marketplace’s John Dimsdale reports there was one country willing to help.
John Dimsdale: Most of Iraq’s debts to its Persian Gulf neighbors date back to the 1980s, when the Sunni-dominated government of Saddam Hussein was willing to take on the Shiite mullahs in Iran.
Wright State University professor Riad Ajami says the Sunnis in Kuwait and Saudi Arabia were happy to lend Hussein money to fight Iran.
Riad Ajami: He said, “I’m fighting on your behalf. I have the army; I need the resources. You put up the money,” and they forked out the money.
Now, the new leader of Iraq, Prime Minister Nouri al-Maliki, says those loan payments are a drag on development. To benefit the entire region’s economy, he’s asking for debt relief.
But Maliki’s government is now run by a Shiite majority and the Sunni regimes in the Persian Gulf are reluctant to forgive old debts, especially given the one country now offering financial aid.
Ajami: The Iranians are willing to help and the Iranians do have the resources.
Iran has already loaned Iraq a billion dollars with easy repayments over 40 years.
Ajami: And for that reason, the Sunni Arabs would want to help the Iraqis, but they would want better behavior and better promises from the Shia-dominated government in Iraq.
Professor Ajami says before Sunni Arabs invest in Iraq’s debt, they want promises that Iraq’s new government won’t get too close to Iran. That’s why Saudi Arabia and Kuwait sent only low-level bureaucrats to listen to today’s plea from Iraq’s prime minister.
In Washington, I’m John Dimsdale for Marketplace.
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