December 8 2011
Baghdad: Naseer Ahmed
At the time decided that the Council of Ministers of Iraq and through its final approval to form a higher committee to audit and pay the dues of the private sector in national and foreign and international organizations, said the central bank said that most file details of Iraq’s debt has been resolved was left, but something very few will be made as soon as possible.
He said government spokesman Ali al-Dabbagh, according to a statement received (citizen) a copy of it, “The Council of Ministers decided to approve the adoption of the recommendation of the Committee on Economic Affairs on the benefits of individuals and private companies of national and foreign and international organizations to form a higher committee to audit and pay the dues of the private sector, both were more than ten million dinars or less and have an exchange of principal without interest arising from it. ”
It is a debt owed by Iraq of the most complex files, which faced the country after the change in 2003, reaching the size of any official foreign debt owed by Iraq for states of more than 123 billion dollars.
Dabbagh said that “the Economic Affairs Committee recommended to subject foreign private-sector debt to the Paris Club agreement in harmony with the orientations of the Iraqi government not to differentiate between the creditors and the necessity of giving in to one rule apply to everyone.”
Ali al-Dabbagh that “the claims prove to be incorrect will be announced and referred to the judiciary, where will the High Commission for the liquidation of dues of the Iraqi private sector to establish a mechanism for scientific exchange and determine the conditions necessary to ensure the validity of the debt and follow-up of the launch of exchange and any other cases.”
The Paris Club is an informal group of financial officials from 19 countries of the world’s richest countries, which offer financial services such as debt restructuring, debt relief and debt cancellation to indebted countries and their creditors.The IMF had identified the names of those countries after alternative solutions have failed.
Central Bank of Iraq and as responsible for a fiscal and monetary policy during the former regime and now one pitted against the debt file confirmed the words of the First Vice Governor of the appearance of Mohammed Saleh, that the issue of Iraq’s debt will close completely at the earliest opportunity, after he succeeded in Iraq and actually get rid of most of the his debts were left to the small amounts being negotiated now.
And Saleh (Citizen), said that the concerned authorities to follow up the subject of Iraq’s debt represented by the Ministry of Finance and the Central Bank and the Iraqi government and external continuing to follow up the matter with the creditor countries, pointing to the existence of three types of debts on Iraq, the first representative of the debts of the Paris Club has nearly been filling the entire merchandise through follow several mechanisms after reduction such as the sale and issuance of debt securities on behalf of Iraq, or payment by installments over eight years compared to the benefits is simple.
He went and stayed there the second type is the sovereign debt outside the Paris Club and this type related to the state of Poland, there is movement it will end soon, either third kind is commercial debt, Iraq repaid debt of 22 billion out of 25 billion, was to end this type of debt through what is called conventions or settlement for example, there are companies that require Iraq’s $ 35 million reduced by 90% here and Iraq will pay ten percent, and there by the bond interest rate of 8% compared to 88% off the value of the debt.
It is noteworthy that Poland is the only country in Europe did not extinguish the debt so far, amounting to (850) million, and Iraq proposed here to discuss with the Polish side to invest money in the process of Iraq’s debt before the age of Polish companies.
And the appearance that the number of companies that made claims on Iraq’s debt under its demand of 13 thousand companies were mostly settle the matter was left with only little thing and some of them asked the private sector, pointing out that Iraq already has succeeded in the management of this file completely.
And detection expert at the bank to close the debt that the debt, mostly settled note that these debts are not debts of the amounts of origin but are debts incurred on the benefits of the original amount has doubled and there are debts is unclear or questionable, and outstanding debt and claims are not installed, and the Ministry of Finance and the Bank is moving toward a debt was off more than $ 100 billion out of 120 billion.
Advisor to the Minister of Finance and on file debt Aziz al-Khafaji, in between studying for this file is that the Iraqi government inherited a heavy legacy of economic, social, and destroy the entire infrastructure was the most influential “is a debt of large and particularly the external ones where the estimated time between 130 $ 140 billion accounted for between 500 600% of GDP and about 700,800 of its resources at the time. I had to deal with these debts as their continued presence will lead to the failure to restore the Iraqi economy recover because of this ring gorge in addition to discouraging the flow of foreign capital.
The trip was U.S. Secretary of State James Baker in different countries to win support in reducing the debt of Iraq and the decisions of the Conference of donor countries held in Madrid in October 2003, the large positive effect on Iraq and an important step to settle the debt.
And Obhsp Khafaji was divided creditors of Iraq into four groups for easier to negotiate with each group and they (the Paris Club creditors and represent 18 countries debt estimated at the time between 4550 billion dollars) and Category II (creditor countries not members of the Paris Club, where debt estimated at more than $ 20 billion ), while the third category is (the Gulf countries are creditors of the Kingdom of Saudi Arabia, Kuwait, Qatar and United Arab Emirates. where the estimated claims between 3040 billion), and finally (commercial creditors and estimated claims up to $ 20 billion.
Creditors of the private sector based on “the Paris Club agreement has held the Iraqi government represented by the Ministry of Finance and Central Bank of Iraq negotiations with all creditors of the commercial private sector in accordance with” the requirement of identical treatment (Comparibilty Treatment) have been during the last period to achieve the following:
1. purchase of debt of a number of sector creditors your debts for less than $ 35 million, or 10.25 cents to the dollar was buying about 4,456 billion dollars, a reduction of approximately 90% .
2 . Either a debt of more than $ 35 million each creditor to private creditors have been exchanged for bonds worth 20% versus 100% of the debt and interest paid semi-annual installments over eight years as “the (2020) and up (2028) .
3. The rest of the creditors of the private sector that are not being adjusted rate of about 4% of the total debt of the private sector, including creditors of the branch of the Rafidain Bank in London, placed under liquidation.
Has been open a new project for resolution whereby the supply and purchase of debts of those creditors who registered their claims with the company the global Ernst & Jonk agent accounting for the Iraqi government and after that has been matched with the records of Iraq is buying the debt under the same principle by which to buy the debt of the private sector offers the last which is 10.25 cents per dollar, and we hope to be settled before the end of this year.
United Arab Emirates, according to Deputy Governor of the Central Bank has decided to favor the appearance of the part, turn off all the debts on Iraq, which amounts to (7) billion dollars and we hope that the rest of the Gulf suit.
He said the appearance that “Iraq is keen to close this file and will not hesitate to urge him to restore the rights of their respective owners requirement that a claimant as to substantiate its claim Vlassv the situation in Iraq is stable and used by many claims malicious and fictitious, but this does not mean we are not able to refute these allegations and verification. ”
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