The International Monetary Fund (IMF) is about to unleash an economic nightmare on Iraq, warn debt campaigners Jubilee Iraq.
A “standby agreement”, which Iraq is required to sign next week to receive partial debt relief, will impose an unbearable burden on the country.
The IMF will grant Iraq £237 million credit in return for an end to pensions and food rations. The agency is also demanding cuts in fuel subsidies and wages.
IMF chiefs believe that there is a danger that “too much” money will be spent on public sector workers.
In addition, under the debt deal Iraq will have to privatise state owned industries, including banks and the oil sector.
During the early days of the occupation the US forced through a series of orders which were designed to clear the way to privatisation. But these were not fully implemented.
The IMF plan is therefore a useful way to return to the robbery.
At the front of the queue for control over Iraqi oil now are Exxon, BP, Shell and Chevron.
According to the Global Policy Forum, which monitors the UN and other international organisations, US and British oil giants will gain “the lion’s share of the world’s most profitable oil fields”.
Jubilee Iraq says Iraqis should be entitled to “some benefit from the black gold that has been the root of so much of their suffering”.
Under the IMF plan Iraq will have to cut £543 million in fuel subsidies this year, with a further £1.4 billion cut in 2006. The price hike will hit the poor hardest and drive up inflation.
The IMF has blamed subsidies for Iraq’s £761 million financial shortfall this year. But the agency also lists Iraq’s war reparations for 2005 at £706 million.
The reparations — imposed on Iraq for damage done during the 1990 invasion of Kuwait — include compensation to florists for unsold flowers and to airlines for cancelled flights.
According to the IMF, unemployment is running as high as 70 percent with increasing numbers of Iraqis turning to crime to survive.
“If IMF staff members were to live through a blistering Iraqi summer, with no running water, and electricity down to a few hours a day, they might think twice before pumping up the price of diesel used to run generators,” says Justin Alexander of Jubilee Iraq.
Jubilee Iraq is demanding that all of Iraq’s debts, which were contracted without the consent of the people and not spent in their interests, should be cancelled unconditionally.
A report from the UN office for the coordination of humanitarian affairs last week said that Iraqis are still suffering from countrywide power shortages despite the government’s recent announcement that more would be spent on this sector.
“The government has forgotten about essential services like water and power,” said Farah Mustany, a mother of four in Baghdad.
This summer has been the worst since the fall of Saddam Hussein’s regime.
For more information on Iraq’s debt go to www.jubileeiraq.org