Debt Forgiveness Downfall

[shellie01]

I've been going over this in my head and it seems like the debt forgiveness that we are all waiting for may be a catch 22. On the one hand Sadaam racked up so much debt that there seems no way for Iraq's economy to proper. Not when they are looking at owing the world so much. True, the people of Iraq should not have to pay for Sadaam running up this debt. BUT the harsh reality is...someone should. If these other countries forgive Iraq of the debt owed to them then that creates a bad relationship. They lost out the first time they invested in Iraq. Will they be able to generate income from foreign investment if they burned these other countries?

Then again... maybe at the next G8 meeting it will go a little differently. Maybe they will not want to relieve Iraq of their debt because they do have the resources (oil, natural gas) to become a wealthy nation once again. Would you tell your brother he didn't have to pay you back that 2000.00 he owes you, if you knew he was going to hit the lottery tomorrow?

Just trying to look at whether this debt relief is all it's cracked up to be....

[Pip]

I've been going over this in my head and it seems like the debt forgiveness that we are all waiting for may be a catch 22. On the one hand Sadaam racked up so much debt that there seems no way for Iraq's economy to proper. Not when they are looking at owing the world so much. True, the people of Iraq should not have to pay for Sadaam running up this debt. BUT the harsh reality is...someone should. If these other countries forgive Iraq of the debt owed to them then that creates a bad relationship. They lost out the first time they invested in Iraq. Will they be able to generate income from foreign investment if they burned these other countries?

Then again... maybe at the next G8 meeting it will go a little differently. Maybe they will not want to relieve Iraq of their debt because they do have the resources (oil, natural gas) to become a wealthy nation once again. Would you tell your brother he didn't have to pay you back that 2000.00 he owes you, if you knew he was going to hit the lottery tomorrow?

Just trying to look at whether this debt relief is all it's cracked up to be....

The hope of the creditors is that if the forgive some of the debt, Iraq will get the economic wheel turning and be able to payoff the balance. If the creditors do not forgive debt, it leaves IRaq with a huge economic burden, of which they might NEVER payoff. So the creditors must weigh Iraq's current economic situation (dismal) and the ability to pay off the debt and decide whether or not to press them for the full amount, possibly seeing little (if any), or to forgive some, but demand the remainder be paid in the next few years.

Obviosuly there is also ethical ramifications in play with Saddam running up the country's debt for personal expenses that is tough to determine how that will come into play.

[eosirl2]

Also a lot of the amount owed is accrued interest which can easily be dismissed and still have the principle paid back to country of origin.

This would allow Iraq's economy to prosper and yet allow them to pay back.

I guess the bottom line it is better to get something back than nothing!

Whethet it is ethical or not is another questions when it was odious debt to begin with.

If the people of Iraq benefited from the loans, then I'd be assumed it would be logically to pay back. If they didn't, then it was a bad loan to begin with, and they should go ask Saddam for their money back not the Iraqi people.




I've been going over this in my head and it seems like the debt forgiveness that we are all waiting for may be a catch 22. On the one hand Sadaam racked up so much debt that there seems no way for Iraq's economy to proper. Not when they are looking at owing the world so much. True, the people of Iraq should not have to pay for Sadaam running up this debt. BUT the harsh reality is...someone should. If these other countries forgive Iraq of the debt owed to them then that creates a bad relationship. They lost out the first time they invested in Iraq. Will they be able to generate income from foreign investment if they burned these other countries?

Then again... maybe at the next G8 meeting it will go a little differently. Maybe they will not want to relieve Iraq of their debt because they do have the resources (oil, natural gas) to become a wealthy nation once again. Would you tell your brother he didn't have to pay you back that 2000.00 he owes you, if you knew he was going to hit the lottery tomorrow?

Just trying to look at whether this debt relief is all it's cracked up to be....

[Lux]

Then again... maybe at the next G8 meeting it will go a little differently. Maybe they will not want to relieve Iraq of their debt because they do have the resources (oil, natural gas) to become a wealthy nation once again. Would you tell your brother he didn't have to pay you back that 2000.00 he owes you, if you knew he was going to hit the lottery tomorrow?

Just trying to look at whether this debt relief is all it's cracked up to be....


All G-8 countries have already forgiven Iraq's debt through the Paris Club.

Debt forgiveness can only help, not hurt Iraq. Paying billions of dollars in interest alone on these debts will hurt Iraq's economy immensely.

High debt means big problems for the dinar.

[Lux]

They lost out the first time they invested in Iraq. Will they be able to generate income from foreign investment if they burned these other countries?


Actaully, they will forgive Iraq's debt because they feel they can recoup their loss (and then some) dealing with a "healthy" Iraq. It's more like a business decision than a moral one.

[dougmyers]

Nobody ever forgives me the Billions in interest I owe. :no:

Maybe some country needs to attack me so I get some help. :crying:

Then I could be :happy64: .

[shellie01]

All G-8 countries have already forgiven Iraq's debt through the Paris Club.



I apologize. I've been reading so much lately that i'm getting my meetings all mixed up apparently. I'm looking to see if I can find a chart or something showing how much debt was originally owed (125 billion) to what is actually owed now. Maybe it shows principle and interest?

I think you all are right. I didn't even take into consideration the interest. If just that is forgiven, it may be the perfect solution. :huge:

[IraqiFreedom]

I think that most of the debt will be forgiven and that Iraq will not have to take any drastic measures.

However, while not a popular view, I belive that the Iraqi government would simply declare the debt of the old regime invalid if they felt it necessary. I don't believe the ramifications would be as big as most believe. Iraq has all the leverage it needs with respect to the West...Oil. Mean while, it's neighbors are too busy worrying about the continuity of their own regimes to raise too many issues.

[arh777]

Slovakia forgives Iraq debt


From press reports


SLOVAKIA will forgive Iraq its debt amounting to Sk35.2 million (€900,000), the Slovak cabinet decided on June 21, ahead of a June 22 International Conference on Iraq in Brussels.

http://www.slovakspectator.sk/clanok-20126.html

[Lux]

Default is not in the best interest for Iraq if it wants to build it's economy and trade globally.

They are not an impoverished nation. They have the means to repay their loans, but it would take decades without debt forgiveness.