§ 4. Mr. David Stewart (Inverness, East, Nairn and Lochaber) (Lab)What discussions are being held with European Union Finance Ministers about providing debt relief to Iraq. [151545]
§ The Chancellor of the Exchequer (Mr. Gordon Brown)Iraq's debt to the international community stands at approximately $120 billion. In a country that is oil rich, with approximately 100 billion barrels of oil, the population has an average income per head of less than $2 a day. The United Kingdom view is that creditors will have to write off the vast majority of Iraq's debt to restore economic sustainability, and we are in discussion with many of our international partners, who share that view.
§ Mr. StewartDoes my right hon. Friend share my view that debt relief is a vital ingredient in rebuilding the Iraqi economy? The loans to Saddam financed his wars, his palaces and the oppression of ordinary Iraqis. Is not Iraq's reconstruction crucial, and must we not get rid of the millstone of Iraqi debt?
§ Mr. BrownI am grateful to my hon. Friend, who I know has taken an interest in the matter of Iraqi debt. Iraq has the second largest reserves of oil in the world, so it is potentially very rich. It is also true, however, that the population's average income is less than $500 a year, which is less than $2 a day. Because of that, we need to take action to correct the position of Iraq. Not only does Iraq have $120 billion of outstanding debt, but it also has compensation claims to honour in relation to Kuwait approaching $80 billion. That is why we propose that, through the Paris Club, debt be written off, and why we have also said that it should be the vast majority of Iraq's debt.
§ Mr. Tam Dalyell (Linlithgow) (Lab)My right hon. Friend the Chancellor rightly said a few minutes ago 374 that there is a huge Russian debt. In the circumstance that much of the Iraqi oil industry is out of date and has Russian equipment—as indeed is true of the water facilities—if the oil industry is to be modernised, what discussions are going on with the Russians as to how we can co-operate to get it moving again?
§ Mr. BrownI believe that when the G7 meets next week in Florida and becomes the G8, with Russia present, we shall have a discussion on issues related to Iraq and reconstruction. More partners are being drawn in to try to help with reconstruction. I shall write to my hon. Friend after the G8 summit in Florida. It is also true that the backlog of repairs—whether in health, education or water, or generally in infrastructure—is, as my hon. Friend suggested, massive. That is why we cannot wait, and the Government have already set aside some $800 million as our contribution to reconstruction.