A CLEAN SLATE FOR IRAQ.(forgive its foreign debt)(Column)

In February, 1895, Cuban nationalists seeking independence from Spain took to the hills and started a campaign of guerrilla warfare. When initial efforts to put down the rebellion failed, the Spanish military relocated hundreds of thousands of Cuban farmers into fortified concentration camps, where they soon fell prey to hunger and disease. In the United States, publicity about the camps fanned hostility toward the Spanish and, eventually, inspired calls for U.S. intervention in Cuba (where, not coincidentally, America had important economic and strategic interests). War began in the spring of 1898, and a few months later the Spanish Empire was gone.

The end of the war presented a new dilemma. Cuba had a mountain of foreign debt, and during the peace negotiations Spain insisted that the Cubans were responsible for all of it. The logic was perverse; much of that debt had been run up by the colonial authorities in their effort to crush the Cuban struggle for independence. But international law seemed to be on Spain's side. Debt, the Spanish argued, was attached to a territory, not to a regime. The money had been borrowed by Cuba, and Cuba, or the occupying Americans, had to pay it back. The regime might have changed, but the debt remained.

The U.S. rejected that argument. The Cuban people had had no say in the decision to borrow the money, and it had been spent in ways that damaged them. Therefore, Cuba should owe nothing. In the end, the new republic repudiated its debts and started over with a clean slate.

Before long, the Iraqi people will likely face a similar dilemma. In 1979, when Saddam Hussein took power, Iraq--thanks to the oil boom of the seventies--had a foreign surplus of about thirty-five billion dollars. A decade later, after the war with Iran, it had a foreign debt of some fifty billion dollars. And today, after more war and a dozen years of missed interest payments, the country owes, by many estimates, more than a hundred billion dollars. Its creditors, which include Kuwait, Bulgaria, and the Korean conglomerate Hyundai, are already jockeying for position to be repaid after the war.

Iraq has no hope of ever repaying its debts. Its annual gross domestic product is a mere thirty billion dollars, and even if this war does relatively little damage to the country's infrastructure it will take years--and tens of billions of dollars--to repair the damage that Saddam has done to the Iraqi economy. Presumably, the U.S. and others will invest heavily in reconstruction. But, if Iraq is to become stable and prosperous, it needs to spend public dollars on public goods (health, education, roads), not on debt payments to creditors who willingly lent money to Saddam.

Even if the Iraqi people could afford to pay back Saddam's debts, it's hard to see why they should. Most of the money that Iraq ...