MOSCOW, 23 December 2003 — Russia offered to write off 65 percent of Iraq’s $8 billion debt after Baghdad signaled that Moscow was in a good position to revive prewar oil contracts.
A member of Iraqi Governing Council, Samir Sumaidy, said Russia made the proposal at a meeting between President Vladimir Putin and the head of the US-backed Iraqi Governing Council Abdul Aziz Al-Hakim at the Kremlin.
“Putin has made an offer of Russia exempting Iraq from 65 percent of their debts. That is a decision made by Russia to be confirmed within the Paris Club,” Sumaidy told reporters after attending a meeting at the Kremlin.
Hakim met Putin after a tour of West European countries devoted to reconstruction after the removal of President Saddam Hussein and to efforts to cut Iraq’s debt burden. Despite Russia’s offer, sources close to the Paris Club of creditors said nothing had been discussed concerning potential write-off levels as far as the group was concerned as a whole, and suggested no such offer would be coming any time soon. “There’s never been any discussion on (write-off) figures — the in-depth analysis of the situation still has to be completed,” one source said.
Putin said Moscow wanted to pursue longstanding relations with Baghdad regardless of the abrupt change of authority. “We have many friends. And this has nothing to do with parties or leaders but rather with people, with specialists,” he said. “According to preliminary estimates, investment by Russian companies could soon reach $4 billion.”
In comments to Itar-Tass news agency, Hakim had singled out oil giant Lukoil, saying Iraq might need its experience while rebuilding its devastated oil industry.
“This is a great company, which has been working a great deal and successfully in Iraq. Today, when we must start developing our oil industry, Lukoil’s experience could be of great benefit,” he was quoted as saying. Russia is one of Iraq’s biggest creditors and is owed $8 billion in principal and interest, according to the Paris Club, a group of 19 creditor nations which negotiates debt.
Meanwhile, Iraqi authorities denied yesterday that there was corruption in the bidding for national cellphone contracts, which are under investigation by the Pentagon.
“There were sour losers in the bidding process. Signing the license agreements today proves the falsehood of these rumors,” Telecom Minister Haidar Al-Ebadi said after signing license deals with three Arab consortia, allowing them to start operations in Iraq.
Iraq’s US administration awarded the three groups two-year tenders to operate in the country in October. The winners were led by Egypt’s Orascom Telecom, Kuwait’s National Mobile Telecommunications and MTC of Kuwait.
The Pentagon said last week it had launched an investigation into the award of the cellphone contracts and this has cast a shadow over preparations to start cellphone service around Jan. 1.
Baghdad’s main landline telephone exchanges remain destroyed after US bombing during the invasion.
