Bad Debt in Baghdad

The AP (via Ananova) reports that Russian Foreign Minister Igor Ivanov is unhappy about how post-war economic relations with the new Iraq are likely to shape up. It looks like about $5 billion worth of IOUs are about to become waste paper.

"We will have to defend our interests so that the contracts which were signed under Saddam Hussein are not annulled as lacking legal force and to make sure the Iraqi debt owed us is respected," he said.

...

"In this way, they are saying that everything before today was illegal, all contracts signed before are illegal, and legality begins with the arrival of a new administration, even a temporary one."

Yep.

Given Russia's to-the-bitter-end opposition to the second resolution, given the political cover they have granted to Saddam, what kind of post-war treatment did they expect? They could have offered to go along with the resolution, and leaned on France to do likewise, and then they'd be in a better position to collect their take be part of the post-war planning and reconstruction. But no. This is the pricetag attached to that veto.

As pointed out previously, lending money to tin-pot tyrants is not just an obnoxious thing to do, it's a bad investment. Iraq is the Enron of world politics (and the UN its Arthur Andersen). You do business with shady people, you get shafted.

And it's hardly unjust; it is, after all, blood money. That debt is for the Soviet-made weaponry used by Saddam, among other purposes, to terrorize the people of Iraq. The new government will be truly representative of those people, and it's ridiculous to expect them to pay for the means of their own repression.

Go pound sand, Igor. Come back and talk to us when you've got all of that Soviet-era affinity for totalitarianism out of your system.

Hat-tip to InstaPundit.

Posted by Kevin Shaum at March 22, 2003 04:08 PM | TrackBack