The mother of all debt restructurings

A restructuring of Iraq's financial obligations is arguably the most important initiative that must be undertaken in that country next to providing humanitarian assistance.

Iraq's current liability profile shows that it has outstanding obligations of about $383 billion. This includes $199 billion in compensation claims received by the United Nations Compensation Commission (UNCC) in the aftermath of the first Gulf War, as well as external debt and pending contracts.

Iraq's external debt is estimated variously at between $62 billion and $130 billion. The differential principally relates to a disagreement over the amount of assistance given by Gulf states to Iraq during the Iran-Iraq war and whether accrued but unpaid debt interest is included or excluded.

Finally, in the run-up to Operation Iraqi Freedom and earlier, the Iraqi administration entered into several infrastructure contracts with public and private foreign companies to the tune of $57.2 billion.

The liability...