An odious debt was defined in 1927 by the Russian theorist of international obligations Alexander Sack as one incurred by a "regime," not "a nation." When Saddam Hussein went to France and Russia to borrow money, was that money turned to the use of the Iraqi people, or was it for self-aggrandizement?
The Democratic high command in Congress has joined forces with the White House in taking the position that the debts should be repaid. But that view of things hasn't been highly ventilated, and the political season is one that would certainly welcome a public debate on the question. Reps. Carolyn Maloney of New York and Jim Leach of Iowa have introduced legislation, the Iraqi Freedom Debt Act, which encourages the International Monetary Fund (IMF) and the World Bank to set aside the $150 billion debt incurred during Saddam's years in power.
At the end of October, Madrid will host a conference at which the question of contributions toward the recovery of Iraq will be discussed. One can of course expect that France and Russia will be there insisting that their loans to Iraq must not be segregated as odious debts, not repayable by the new Iraq. As things now stand, the U.S. government will simultaneously argue (1) that the debts should be repaid, and (2) that other nations should contribute to the cost of restoring Iraq.
That's the kind of thing that happens in diplomatic circle-squaring conferences, where you run into yourself coming down the other way. The United States believes formally that the debts should be repaid and believes also that the countries to which the money would be repaid ought to fork it over as their contribution to the rebuilding of Iraq.
If you participated in the Madrid conference, what arguments would you probably be hearing?
The odious-debt people are going to argue that the $150 billion (the figure is approximate) was used by Saddam in hideously expensive and egomaniacal ways. The money bought palaces, weapons of mass destruction and gold bullion for the ruling family. They will argue that Iraq's natural wealth was sufficient to provide for any normal needs of the state, such as to guard against starvation or pestilence.
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