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Iraq Oil Economy Debt

Guest LAW

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Iraq's economy is dominated by the oil sector, which has traditionally provided about 95% of foreign exchange earnings. In the 1980s financial problems caused by massive expenditures in the eight-year war with Iran and damage to oil export facilities by Iran led the government to implement austerity measures, borrow heavily, and later reschedule foreign debt payments. Iraq suffered economic losses from the war of at least US$100 billion. After hostilities ended in 1988, oil exports gradually increased with the construction of new pipelines and restoration of damaged facilities. A combination of low oil prices, repayment of war debts (estimated at around US$3 billion a year) and the costs of reconstruction resulted in a serious financial crisis which was the main short term motivation for the invasion of Kuwait.


On November 20, 2004, the Paris Club of creditor nations agreed to write off 80% ($33 billion) of Iraq's $42 billion debt to Club members. Iraq's total external debt was around $120 billion at the time of the 2003 invasion, and had grown by $5 billion by 2004. The debt relief will be implemented in three stages: two of 30% each and one of 20%.[10]


After the period of economic sanctions many of Iraq's state-owned enterprises were next to collapse. In 2003 the US led Coalition Provisional Authority drew up a framework for largescale privatization and opened up state-owned services to foreign investors. The insurgency campaign over recent years has hugely dampened US and British efforts to bring in such foreign investment and frequent attacks on the oil infrastructure have also had a major economic impact.

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The United States is a member of the Paris Club, an informal group of financial officials from 19 of the world's richest countries, which provides financial services such as debt restructuring, debt relief, and debt cancellation to indebted countries and their creditors. Debtors are often recommended by the International Monetary Fund after alternative solutions have failed.


The following countries are permanent Paris Club members:
























Paris Club Creditors agreed to grant Iraq an additional tranche of debt reduction representing 20% of the initial stock upon completion of the last IMF Board review of three-years of implementation of standard IMF programmes. This debt treatment would reduce the total debt stock from 38.9 billion to 7.8 billion US dollars.


The members of the Paris Club which participated in the reorganization of Iraq's debt were representatives of the governments of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, the Republic of Korea, the Russian Federation, Spain, Sweden, Switzerland, the United Kingdom and the United States of America.

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Guest Show me the money!

Iraq holds more than 112 billion barrels of oil - the world's second largest proven reserves. Iraq also contains 110 trillion cubic feet of natural gas.


The Iraqi government is telling its citizens to save dinars, that is kinda like saying, "get rid of your dollars, buy more dinars, save more dinars, because the dinar will open soon, and the value of your dollars will tank". The other thing is if this new assembly ever gets going they may want to forge ahead economically, if no other reason then to make themselves look good.


I'm loving it right now because I dont purchase gas. I just wish this increase would happen right around the time the dinar opens. I heard in under a month gas at the pumps is going to rise .25 and by summer it will be at 3.00 a gallon.

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Guest Red_*

Go **to perform an anatomical sexual impossibility** yourself,


I show you the money, you sand African American.


To me Iraq's oil belongs to America. We got shot up and risked our lives.

I say we screw the rest of the world and take that oil for ours. End of story.

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  • 8 months later...
Guest Scott McLarty

An indefinite occupation is obviously the White House's plan, in light of news that the Iraqi government is about to push through a deal giving foreign oil companies like Exxon Mobil, Shell, and Chevron the right to exploit Iraq's oil reserves," said Fred Vitale, Michigan Green candidate for State Representative (District 3) in the 2006 election. "High U.S. troop levels will be necessary for years to come to make it profitable for these corporations to drill for and export Iraqi oil. Furthermore, rage in Iraq and throughout the Middle East will be inflamed as Iraqis witness the theft of their resources."


The new law, which allows "production-sharing agreements" (PSAs) granting Western companies 30-year contracts to extract Iraqi oil, has been vetted by the U.S. government, U.S. oil companies, and the International Monetary Fund ("Blood and oil: How the West will profit from Iraq's most precious commodity," The Independent, January 7, 2007 <http://news.independent.co.uk/world/middle_east/article2132574.ece>).


The PSAs permit the oil companies to bleed 75% of the profits from Iraqi oil without requiring them to reinvest money in Iraq itself. The deal reinforces the sentiment of most Iraqis that control over Iraqi oil was behind the invasion all along (Monthly Review, December 2006, <http://www.monthlyreview.org/nfte1206.htm>); this belief (contrary to U.S. propaganda about Islam, terrorist infiltration, and hatred of democracy) has been the main motivation for Iraqi resistance to U.S. forces.


"The 'blood for oil' deal proves what antiwar protesters have been saying since 2002, when President Bush announced his intention to invade Iraq and White House officials falsified information about WMDs and Iraqi connections with al-Qaeda," said Rebecca Rotzler, co-chair of the Green Party of the United States and Deputy Mayor of New Paltz, New York. "This was a war to gain political control of the world's second largest oil-producing nation, and it's why the Bush Administration intends to maintain the occupation as long as possible. It also suggests what was on the agenda when Vice President Cheney held his secret meetings with oil company representatives to determine America's national energy policy."

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  • 8 months later...
Guest Dissident Voice

At a secret NSC briefing for the President on February 24, 2003, entitled, “Planning for the Iraqi Petroleum Infrastructure,” a State Department economist, Pamela Quanrud, told Bush that it would cost $7-8 billion to rebuild the oil infrastructure.

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