An Analysis of U.S. Policy Concerning the Disposition of Iraqi Debt

Abstract

Although Saddam Hussein's ousted regime's outstanding debt obligations are not known for sure some estimates put his total financial obligations as high as $383 billion. As the United States leads the restructuring and reconstruction efforts in Iraq the disposition of this huge debt has become a topic of great concern and debate. The debate centers on whether Hussein's debt should be deemed odious under the Doctrine of Odious Debts and therefore forgiven. According to the Doctrine of Odious Debts states have the right to repudiate debts if they are incurred without the consent of the people of the state and if the debt cannot benefit the public in that state as long as the lender was aware of these two conditions. Although there have been numerous recent examples of dictators or regimes that contracted odious debt including Mobutu Sese Seko in the Democratic Republic of Congo (the former Zaire) Anastasio Somoza in Nicaragua and Ferdinand Marcos in the Philippines in none of these cases did the successor governments receive any form of debt forgiveness. This paper argues that Hussein's debt should be forgiven due to its shear size and because it meets the three conditions necessary to repudiate the debt under the doctrine. Resolution of this issue has the potential to have a significant impact on the global economy and more importantly on U.S. national security. Due to the significant level of international discourse on this issue and in light of its powerful global influence it is important for the U.S. to establish a clear and firm policy on the disposition of Iraqi debt. This paper begins by discussing the different types of debt a sovereign government can incur. It then chronicles the history of the Doctrine of Odious Debts and provides recent examples of illegitimate leaders and regimes that contracted huge amounts of odious debt before being ousted.

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Document Details

Document Type
Technical Report
Publication Date
May 03, 2004
Accession Number
ADA423366

Entities

People

  • Leslie M. Brehm

Organizations

  • United States Army War College

Tags

Communities of Interest

  • Energy and Power Technologies

DTIC Thesaurus Topics

  • Commerce
  • Congress
  • Economic Analysis
  • Economic Policy
  • Economics
  • Finance
  • Governments
  • Infrastructure
  • International Law
  • International Trade
  • Investments
  • Law
  • Money
  • National Security
  • United Nations
  • United States
  • War Colleges

Readers

  • East Asian Political and Security Studies within the Soviet Union
  • European Security and Defence Policy (ESDP).
  • Government and Public Administration Law.