Members of Paris Club
On the 11-21-2004 Iraq negotiated a preliminary agreement with the Eighteen countries that make up (the Paris Club) for an immediate write-off rates at 30% of Iraq's debts which amount to about 50 billion dollars credited to the Member States (the United States of America wrote off all its debt upon Iraq which is nearly four billion dollars in January 2004).
As for writing off the second installment of Iraq's debts to Paris Club countries, which are equivalent to 30% of the original debt, Iraq has signed the Convention of the (Support Arrangements) with the International Monetary Fund in the 11-23-2005 to implement it.
Entering these arrangements with the IMF, the debt will be reduced by additional 12 billion dollars to the Paris Club, followed by the elimination of the remaining debt of 8 billion dollars automatically, in case Iraq succeeds in implementing the (Support Arrangements) convention with the IMF in 2008.
The Gulf Cooperation Council
A number of the (Gulf Cooperation Council) States called upon Iraq to payback amounts that exceed (50) billion dollars offered by those States as financial assistance to the former regime during the Iraqi-Iranian war from 1980 to 1988. Iraq has received assurances from those States to settle the debts under conditions similar to those, at the very least, agreed by Iraq with the Paris Club countries.
In spite of the tireless efforts made by the Minister of Finance, Professor Baqir Jabr Azzubaidi, to exempt Iraq from all its debt to Saudi Arabia, on bases Arab brotherhood and common destiny, the results were not satisfying... We hope that the Saudi side understands of the current circumstances in Iraq and that the government of national unity is not responsible for this debt in the first place. However, 40 billion dollars, or more, will be written off in case of signing bilateral agreements with the States of the Gulf Cooperation Council during the coming year 2007.
States, outside the framework of (the Paris Club)
Iraq is in debt of 20 billion dollars for countries outside the scope of (the Paris Club). In this regard, Iraq had signed an agreement with (Hungary, Romania, South Africa, Czech Republic, Slovakia, Malta), which agreed to cancel all debts by100%, according to personal efforts by Mr. Baker Jabr Al-Zubaydi, Minister of Finance, and talks are still continuing with other countries with great success. An agreement will soon be signed with (Bulgaria), from which Professor Aziz Jaafar Hassan, Personal Adviser to the Minister of Finance, had returned a few days ago to prepare the conditions for the signing of the bilateral agreement for the settlement of Iraq's debts with Bulgaria.
More than 600 business entity claims for the payment of debts owed to Iraq during the period of the previous regime totaling more than 22 billion dollars. Iraq has paid these debts on basis similar to the Paris Club agreement and has completed more than four commercial offers cash rate (25 / 10) cents for every dollar, reducing the total debt by more than 4 billion dollars; in addition to offering the senior creditors, whose debts are more than 35 million dollars, the purchase of bonds at a total amount of 14 billion dollars. These bonds were issued roughly equivalent to ( 3, 225 )billion dollars and is expected to reduce Iraq's debt, which amounts to 130 billion $,to about (50) billion dollars which will be reduced to less than 30 billion dollars in case Iraq succeeds in implementing the (Support Arrangements) signed with the International Monetary Fund by 2008.
The Minister of Finance, Baqer Jabr Al-Zubaydi, said that the Iraqi government has inherited major challenges, three years ago, including the debt burdens which amount to 130 billion dollars; however, many of those challenges will be passed. The Minister of Finance and his team were able to reschedule Iraq's debts, which most of them will be resolved by 2007. (Source)AlSabah