Reaction from the US State Department . . . http://en.rian.ru/rian/index.cfm?prd_id=160&do_alert=0&date=2003-04-11&msg_id=3167180
Legally the new Iraqi regime will owe them. Is it our place to ask the Russians to drop the debt, probably not. Will the Russians drop the debt, probably not. Will we end up paying them in the end so we can be free to maximize our oil profits, most likely.
Legally? I was hearing on NPR that Russia's main supply to Iraq was military goods. These goods went directly to Saddam, thus the debt is a military debt to a failed regime. IIRC the debt is in the billions. The guy, again I am sorry for not having the text as NPR has to do the transcripts of the shows and seem to either sell the transcripts or allow you to listen to an audio archive, no link for you. Plus, their search option is wacky...ah, public radio! It sounds like Russia has no leg to stand on. While Russia has its own oil, there is little doubt that Russia was "switching" their oil for Iraqi oil and selling it as Russian. Laundering on an international scale? Say it ain't so before I have to start eating at the local Freedom Tea Room.
Why does it matter what the money was spent on? The government of Iraq made a deal and the government of Iraq has to stand by it. You can't have states abdicating their debt by saying "Oh, the last administration was invalid". It would throw world finance into chaos. The only illegal oil selling by Saddam was to the Turks, and it was stricktly small scale stuff (by truck) and we turn a blind eye to it to make Turkey happy. Oil reselling happens all the time and is hardly laundering. You can find a couple Caribian states that have seemingly large oil imports, but in fact it is only on paper as the oil is refined there and sent to the US.
You are correct on the oil laundering, but it makes for good in conversation when people don't know how simple it is to change flags on a tanker. When you drive alone... As for the legal issues, I really don't know where "international" law applies. It is as clear as war crimes talk. Easy to claim in the court of public opinion, but we need to see where this leads. The report on NPR also added that if no repayment is made and local currency is just about worthless, investors do come back. It is like buying low in a market situation. Sure, when they come into a situation, they can expect 5 cents on the dollar, but later can hope for 80 cents on the dollar. Not the best, but they are investing on the future...which was quite interesting for Bush to make these same claims before military action. Iraq was and can be a profitable situation and the oil can help rebuild and pay off debts. The case here is to ask, as in any "reorganization", who gets paid first, how much on the dollar and if ever.
The government of Iraq is no more. The new government that will be formed is under no obligations to honor the past agreements of a despot dictator. And, most importantly, there is no world organization that can or will force them to do so.
Force them? Market forces might, but probably not. Like I said before, Iraq wants and will need international investment. If they renege on past efforts, regardless of Saddam, it only shows that any, any unstable political situation can cause such losses in investment. Oil is a strong force in the market. Oil is a solid investment (my take) as the world seems so hell bent on using it all up before any real alternative options are found. Now, screw Russia, the USA and the rest of the world! Will Iraq be a more stable and fair society because of the oil? I mean, we are at war where Saddam had palaces with gold toilet seats and Iraqi citizens live in mut homes circa 4,000 BC!
I share this view completely. Those that profit from dictators should bear the risk of regime change.
Ian, you are incorrect on this point, unfortunately I must point out. It is the government that makes the deal on behalf of the state. Successor governments attain the same rights, borders, and responsibilities as the previous government. This is a long standing tenent of international law. So, if Russia, France, Germany, and China do not forgive the debts Saddam used to build those wonderful Presidential Palaces, then legally the new Iraqi regime is required to pay those debts, as they are required to fulfil legally executed oil deals with those countries prior to the war.
> I share this view completely. Those that profit > from dictators should bear the risk of regime > change. What if a democracy is overthrown and then a dictatorship takes its place? Do you still hold your opinion? What is to stop a state from declaring martial law, abandoning all debts and then returning to constitutional law in a year? Makes for a quick way to lots of money. The US has regime change every 4 or 8 years - should a Democrat be able to abandon all the foreign debt that a Republican built up?
[Ian] Also, the US needs to get its troops and the detainees held there out of Guantanamo because that land was given to the US in an agreement with a previous Cuban regime and Castro should in no way be forced to honor the agreements made by previous governments[/Ian]
While I agree with the idea that the Iraqis should not be forced to repay their debts to other countries, this is not the reason why. Iraq is a sovereign nation, and under any other circumstance debts that are amassed by that sovereign nation are not released any time the government changes leadership. (Imagine if Clinton could have just ignored the debt built up under the Reagan years.) And no, a switch from a dictator to a democracy is not enough -- if Saddam's debts were really his personally it's another matter, but in general Iraq is Iraq and they should in theory remain on the hook, so to speak. People shouldn't confuse Saddam with Iraq. But like I said, the other countries should wipe the slate clean, for the same reasons that all third-world debt should be erased -- it harnesses the country into developing cash rapidly just in order to keep afloat, instead of investing in infrastructure which usually requires more debt. It is simply immoral for a first-world country to hold billions in debt over the heads of third-world countries when it leads to increased poverty and suffering. Iraq is natural resources rich enough that they could become a first-world nation quickly. But that is going to require a sharing of those natural resources in a way that we have never seen anywhere on the planet. So I wouldn't count on that money to bail the country out.
oh fvck russia... why don't they pay US all the money in loans they owe us... then we will start worrying about iraq paying them...