23 October 2003
U.S. Urges Creditors to Restructure Iraqi Debt
Powell says U.S. will take case to Madrid conference Oct. 23-24
The United States is asking international holders of Iraqi debt to restructure the debt and make it less burdensome for the Iraqi people, says U.S. Secretary of State Colin Powell.
"The worst thing to happen now" would be to see Iraq's new oil revenues go to servicing new and old debt, Powell said to reporters October 22 on the eve of the International Donors' Conference for the Reconstruction of Iraq in Madrid.
With respect to the approximately $20 billion dollars the administration is asking Congress to approve for grants to Iraq, Powell said U.S. taxpayers "will be paid back for their grant by helping to create a stable Iraq and democratic Iraq that's going to be living in peace with its neighbors."
Powell said he welcomed the planned presence of U.N. Secretary-General Kofi Annan at the donors' conference as well as ministers and other high-ranking officials from several countries.
He said the United States had no set goal for contributions going into the conference. The United States considers the $55 billion the World Bank estimates is needed for Iraq's reconstruction a goal donors can work toward, he added.
Powell said the conference has already had early signs of success with significant pledges from Japan, Spain, the United Kingdom and South Korea.
Following is a transcript of Powell's remarks:
(begin transcript)
U.S. DEPARTMENT OF STATE
Office of the Spokesman
(Madrid, Spain)
October 22, 2003
Press Briefing by Secretary Colin L. Powell
Aboard Aircraft en route to Madrid
October 22, 2003
POWELL: Okay, we'll keep it short since dinner is on the way and the transcriber is sleeping. And you're tired, you're tired. I'm never tired. On to Madrid, I'm looking forward to the Donors' Conference. We will kick it off tomorrow morning with Kofi Annan making a presentation. I am very pleased that the [United Nations] Secretary General was able to rearrange his schedule so that he could attend. He's got events back in New York on Friday dealing with U.N. Day, but I think he felt it was important enough to make the trip, come over and kick off the conference. And I think that reflects the fact that we are coming together again after [U.N. Resolution] 1511 [reaffirming the sovereignty of Iraq] was passed last week. And then they'll be a variety of technical discussions tomorrow, Ambassador Bremer [Coalition Provisional Authority Administrator L. Paul Bremer] will be there with members of the Governing Council and members of his team in order to answer questions, give a status report how things are going. And then on Friday, we'll have the major interventions from Ministers and other representatives who are attending. I think I am speaking on the afternoon...well, no, I'm sorry, Friday morning, along with Secretary Snow [Treasury Secretary John Snow].
Representation is still being worked out. I would guess that half the representatives will be at Ministerial level, not necessarily Foreign Minister level. Many countries are sending Development Ministers or Finance Ministers. For example, my British colleague this time will not be Jack Straw, but Ms. Benn [Hilary Benn] who is the Development Minister. So you'll see a different kind of mix, since it is a Donors Conference. Then a lot of nations will be represented at other levels, maybe reflecting what they are able to contribute or whether they are just there to provide a presence of solidarity, as opposed to actual money and resources. But, I look forward to a productive conference and then we'll head on home on Friday evening. Why don't I just stop there and see what questions you might have so we can keep it short?
QUESTION: Mr. Secretary, I haven't done all the math, but there is this World Bank report, obviously, that says that millions and millions of dollars are needed. Is there going to be a shortfall when you gather up all the pledges?
POWELL: Let's define what that might mean, what the question might mean: will there be a shortfall? There will always be, I mean, I could go to any city in the country, in the United States I could go to any state and say, "what do you need" and it will be a very large number.
The World Bank has come up with estimates of what Iraq will need over some period of time that go as high as $55 billion. That doesn't mean that we have to raise $55 billion between, with the $20 billion that we are asking in the supplemental and what this donor conference produces. It just sets a goal that we have to work toward. And it may take time to meet that goal and it may take additional contributions as we move forward. And we'll have to see how Iraqi revenues start to generate in a couple of years time after we make the initial investments that gets the oil infrastructure built in a way that revenues will increase.
So even though there is a goal out there I have never approached this as a goal that has to be reached between our $20 billion supplemental and the donors conference. There will always be a delta that we will be trying to close as best we can, but its not something that has to be closed right away, nor do I think anybody expects it to be closed right away. It was the estimate of the IFIs, the International Financial Institutions of the World Bank, as to what the overall need seems to be and it is a goal to which we will all be striving. And I hope that between our contribution and what comes out of the donors conference, people will see that we've got a good leg up on satisfying that overall requirement.
Q: The Administration, as we led up to the war, said in many instances that they expected the Iraqi oil revenues to pay for reconstruction. And now the American taxpayers are being asked to pay $20 billion, other countries presumably eventually $35 billion. Do you think the taxpayers have been taken for a ride here?
POWELL: No, I don't think they've been taken for a ride. I think the Administration has been candid. We all would have been delighted to see an immediate return to $20 billion a year revenues of the kind the Iraqis had some years ago. But, we found an infrastructure that was more damaged than we expected, and not as a result of the war, but as a result of 30 years of abuse by this dictatorial regime. I think the Administration has been candid, the President has been candid with the American people that these funds are needed, they serve a useful purpose and help us to solidify the success that we have had getting rid of this regime. And I think the President clearly has made that case to the Congress, since both houses have come in have that number or thereabouts and there is a discussion taking place with respect to the composition of it, whether it is loans and grants. I'll let that debate play out on the Hill. But, the Congress certainly understands and I sense that the American people understand that this is a worthy investment.
Q: Can you talk about Kofi Annan's presence at the meeting? Is he going to be able to open any pocketbooks that would not otherwise be open if he were not there?
POWELL: I certainly hope so. I can't predict that. I think most people, by now, have determined what they are bringing tomorrow or Friday. You have seen some public statements already from various countries as to what they are planning to do. And it is some significant contributions are being put forward: Spain, the United Kingdom, South Korea, a reference was made to what the World Bank and the IMF are thinking of doing. I don't want to speculate on a number because I'll wait and see what the tally list looks like on Friday afternoon. But, I think Secretary General Annan's presence is a signal to the international community that he endorses the conference, he endorses what is going on, he believes that he now has a proper role as circumstances permit under 1511. And I am very very glad that he is going to be there. Whether it opens a particular pocketbook, I can't answer. I don't know what else Kofi might have been doing.
Q: I just wanted to know if you were aware that Syria has announced that it is going to be represented at this conference and what you thought about the fact that there will be someone at least, I don't know how high, will be there from Syria?
POWELL: I don't know who it is. I mean it is quite a turnout, even if its not all at Ministerial. I'm pleased that they're there. I'm pleased that they voted for 1511. I haven't had a chance to talk to Foreign Minister Sharah. I don't think he's coming, I don't think he's representing Syria. But, I am pleased that they are coming. I'm not sure what their intervention will say or what...I'm not expecting a contribution.
Q: The reason I was asking was because of this report about the money being in...the money you would like for reconstruction. You're aware of this report, the $3 billion that is allegedly in Syrian banks. Now when...
POWELL: We have people looking into this. I'm not sure of the exact amount, I haven't heard a number quite that high, but certainly numbers of significant magnitude. And whether an opportunity will present itself over the next couple of days for either me or other members of the U.S. Delegation to discuss this with the Syrians or not, I don't know. We have people doing work with the Syrians directly.
Q: ...
POWELL: Yeah. It's Iraqi money. And we would like it to go back to the Iraqi people. Whether that will be...
Q: I believe the Iranians have accepted an invitation to this conference. I was wondering if you will have a meeting with any of the Iranian officials during this period or whether their participation signals some greater coordination with the U.S. on this matter.
POWELL: I have no plans to meet with Iranian officials...
Q: The only countries that we haven't heard from...are the Gulf countries and we understand that given.... Can you tell us a little bit more about whether there will be forthcoming any numbers that you have heard.
POWELL: I have, I haven't heard any numbers but we expect them to be forthcoming. In my conversations, we have been giving them some suggestions of what might be appropriate but I think I'll keep that private until we see what they do.
Q: Secretary Powell, when Zach Womp [Congressman Zach Womp, Republican from Tennessee] withdrew his loan amendment...when Zach Womp withdrew his loan amendment to the Iraqi's up in the House which had considerable support he did it...the U.S., the White House would push very hard for complete (sic)... Do you agree with him and how hard are you gonna push?
POWELL: He was considering an amendment, but...it's a very complicated issue. What we are working and doing right now is restructuring all the Iraqi debt. We are asking to debt holders in the international community...to restructure the Iraqi debt over a longer period of time and then see how we can go about forgiving it or in other ways making it a less burdensome to the Iraqi people. The worst thing to happen right now would be for...to see all that revenue go to debt service and old debt service or new debt service that also impacts on the....
Only to see all that revenue go to debt service. Old debt service or new debt service. That also impacts on the approach we are taking on the Congress that we want grants and not loans. Because if we come out with a position that says we want loans then how could we go to the old debt holders and say restructure it but we've got new loan burdens or debt burdens that we're putting on the Iraqi people. So the approach that we think is best is we should derive a grant of 20 billion dollars, not a loan, and that we should work with all the debtors to restructure the old loans and point out to a number of them the source of these loans and whether or not the Iraqi people should be saddled into the future for these kinds of expenditures.
Q: As a political matter how's it going to look if there isn't complete debt forgiveness; if debtors have financed Saddam's regime are paid back even partially when American taxpayers who are spending for the benefits of the average Iraqi aren't paid back at all?
POWELL: It's something we have to look at. We would try to persuade those who hold the debt to take a look at that debt to see what should be restructured as a legitimate to be continued in the future or what perhaps should be forgiven because of the nature of it. The American taxpayers I think will be paid back for their grant by helping to create a stable Iraq and democratic Iraq that's going to be living in peace with its neighbors and there'll be a long term payoff for having that kind of a nation in that part of the world. And then it's....
Q: When we're coming home on Friday night what are the standards that we're looking at to say that this conference was a success. What makes it...how much is it...what is the level that makes it a successful conference for the U.S.?
POWELL: I don't have the specific number that I'm looking for. I think it's a success because just going in it has elements of success associated with it because of the turn out, the number of people that are coming. I'm pleased with some of the early donations that have been put down. A billion and a half dollars from the Japanese in a form of an immediate grant. I'll expect that they'll be doing more. And so I'm pleased with what I've seen so far. I think it will be a successful conference and perhaps we should have another conversation on Friday night and I'll give you the rest of the answer.
Q: How do you explain the fact that months after [U.N. Resolution] 1483 was passed and weeks after 1511 was passed you still haven't set up the international advisory and monitoring group, which seems to have left a pretty bad impression upon the European possible contributors to Iraqi reconstruction? What is going on here? What's the delay of what was blinded...word used?
POWELL: I think we're talking about the same issue and I may be a day or two or three or four out of being current on it. And if I give it to you wrong Richard will fix it in a few minutes. But there was a debate about maybe a special auditing function and it took us awhile to work our way through that. And that's what...that was the last issue with respect to the IAMB [International Advisory Monitoring Board]. My understanding of it last Friday was that they had been resolved...Thursday?...okay. My understanding was that it had been resolved, but why don't you give us a little bit of time to check. Okay?
Q: Is there anything that could happen here in which you would not be credited to be a success?
(Laughter)
POWELL: Let me think about that. (Laughter) I don't know what you guys think the number ought to be in order to write your headlines but I think it's going to be a significant amount that's coming forward. Compared to where we were a couple of weeks ago and what people were saying a couple weeks ago, I think it's going to be a fairly significant amount. Is it going to be 30 billion? No. Is it going to be 20 billion? Doubtful. What it's going to be? I don't know. But we will know soon enough. Okay?
QUESTION: How many?
SECRETARY POWELL: How many countries? I don't know. Richard may have it. I don't know. We've got a list we'll count them...59? I've been working Steve, not counting countries. (Laughter). Geez, I've got three hours yet.
Thank you.
(end transcript)
(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
This page printed from: http://usinfo.state.gov/xarchives/display.html?p=washfile-english&y=2003&m=October&x=20031023122127emmoccmk0.366604&t=usinfo/wf-latest.html
|
NEWSLETTER
|
| Join the GlobalSecurity.org mailing list |
|
|
|
