The Iraq sovereign debt restructuring

Iraq was the most indebted nation in the world when the USA and its Coalition partners invaded on 19 March 2003.1 Iraqi indebtedness was a result of debts incurred as part of the Iran-Iraq War (1980-1988) and crippling economic sanctions imposed during the 1990s. In early 2003, the US government backed one of the largest sovereign debt restructurings in history to help reintegrate Iraq into the global economy. Getting rid of the debt burden was required to facilitate trade and avoid attachment of assets by creditors. The restructuring was a political process, setting it apart from most restructurings in the 1990s and 2000s, which were creditor-friendly affairs. This article details and analyses the Iraq sovereign debt restructuring and shows how it managed to inflict harsh terms on its creditors. © The Author(s) (2020). Published by Oxford University Press. All rights reserved.