Why was not 6 cents on the dollar offered before the invasion?
Sir, Monday 17, Comment & Analysis gives a very complete report on the restructuring of the Iraqi debt which “by 1990, when the United Nations imposed sanctions after Iraq had invaded Kuwait, all the debt was in default” and “by the time the US-led invasion toppled the regime in April 2003 the build-up of interest owed meant the debt had grown to $140bn, making Iraq one of the world’s most indebted countries relative to the size of their economy”.
What remains a mystery though is how, under such circumstances, no one thought of making a debt purchase offer, let us say of a quite generous 6 cents on the dollar, before the US invasion, since not only is that what you would rationally expect from any normal rescuer willing to stick their neck out for a bankrupt company/country, but also, in this particular case, since it would probably have been the most effective way of transmitting the seriousness of the American threat. As is, when having to read all the front page horror stories about the Iraqi tragedy, it is hard to know whether to laugh or cry, when you describe their recent efforts “to develop a creditor profile in international markets and debt management capabilities.”
What remains a mystery though is how, under such circumstances, no one thought of making a debt purchase offer, let us say of a quite generous 6 cents on the dollar, before the US invasion, since not only is that what you would rationally expect from any normal rescuer willing to stick their neck out for a bankrupt company/country, but also, in this particular case, since it would probably have been the most effective way of transmitting the seriousness of the American threat. As is, when having to read all the front page horror stories about the Iraqi tragedy, it is hard to know whether to laugh or cry, when you describe their recent efforts “to develop a creditor profile in international markets and debt management capabilities.”
Iraq debt Joanna Chung Stephen Fidler
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