Iraq still hopes to recover at least a portion of the estimated $10 billion stolen by Saddam Hussein and his allies under the U.N.’s scandal-plagued oil-for-food program, Finance Minister Adel Abdul-Mahdi said yesterday.
“Certainly, we are counting on the money,” said Mr. Abdul-Mahdi, who was in Washington for the annual World Bank and International Monetary Fund meetings. “We are heavily engaged right now in just finding where the money went.”
The finance minister spoke with The Washington Times after addressing an American Enterprise Institute forum on Iraq’s economic condition.
He expressed optimism that an international donors conference on Iraq next week in Tokyo will generate fresh contributions, but said eliminating the country’s crushing $120 billion debt burden by the end of the year was an even greater priority.
France and some of Iraq’s neighbors have been resisting calls to wipe out immediately virtually all of the debt, run up during Saddam’s more than two decades in power, saying Iraq has oil and other energy reserves to pay off more of the debt and arguing a deep write-off would set a bad precedent.
But Mr. Abdul-Mahdi argued that foreign investors needed a clear sign that the state debt — equal to six times the nation’s gross domestic product (GDP) — was permanently off the books and has called for a write-off of up to 95 percent of the debt.
A more traditional, staged debt-reduction scheme, proposed by Paris, “is tantamount to condemning Iraq to years of poverty,” he said.
The U.N.’s oil-for-food program was intended to allow Saddam’s regime to buy a restricted list of food and humanitarian goods with the country’s vast oil profits, while keeping in place international sanctions on the overall economy.
But the program, begun in late 1996, quickly became a cash machine for Saddam and for international partners willing to evade U.N. controls. The congressional Government Accountability Office earlier this year estimated that Saddam and his allies skimmed more than $10 billion in kickbacks and inflated contracts under the program.
The Iraqi government has hired the international consulting firm KPMG to investigate records and contracts under the oil-for-food program. The United Nations and at least four congressional committees are looking into the scandal as well.
The Tokyo donors conference, set for October 13-14, would be the second international gathering on aid for Iraq.
The first conference, held in Madrid in October 2003, generated $33 billion in pledges — including $18.4 billion from the United States — but Iraqi officials have expressed repeated frustration that only about $1 billion has actually been paid out.
Hatsuhisa Takashima, press secretary for the Japanese Ministry of Foreign Affairs, said in an interview yesterday that Japanese organizers are working hard behind the scenes to increase participation and hard pledges for the Tokyo gathering.
“We are busy calling on potential participants,” Mr. Takashima said, noting in particular efforts to increase pledges from European Union countries who offered just $200 million in Madrid.
Mr. Abdul-Mahdi also sharply criticized what he said was excessively gloomy U.S. and Western press reporting on the security situation in Iraq.
“When I was in Iraq, I was an optimist,” he said. “It was only when I came to the States that I became pessimistic.”