CITY AND SUBURBAN
Saddam Hussein gets out of debt by holding up the bank
CHRISTOPHER FILDES
Isuppose that if I owed a fortune to the National Westminister, and could not pay it back, because I had spent it all on guns, I might use them to hold up the bank. This economical approach has commended it- self to Saddam Hussein. Kuwait had lent Iraq more than $12 billion. The money had gone to arm the Iraqi army, doubtless in the belief that so long as Iraq and Iran were busily fighting each other, they would both he distracted from moving south. Good try, but not good enough. Iraq can surely stop worrying about this $12 billion debt, and start salivating about the $50 billion managed from London by the Kuwait Investment Office. That is, of course, Kuwait's pension fund, stored up against the day when the oil runs out — but I can think of takeover artists who find pension funds their most appetising morsels. (If President Saddam's personal top-hat scheme happens to be underfunded, he should plan to merge it into the KIO and sleep easily.) The Bank of England, en- listed as the pensioners' trustee, has called up its lawyers at Freshfields and gone into action, and veterans of the Exchange Control Department say that it is quite like old times. There must still be veterans of the Czech Assets Realisation Trust, which the Bank established when Hitler marched into Prague and put the shutters up. British creditors were paid from Czech funds which the Bank successfully blocked in London. That could be a precedent. The Export Credit Guarantee Department leading with the chin, as usual — backed British credits in Iraq, including the Mid- land Bank's. It may now nurse the hope of repayment, one day, out of KIO funds. What cannot be imagined is that the Kuwaiti assets will just be locked away in a
London vault like Tsarist gold, awaiting the day when the previous regime is restored to power and normal service is resumed. The standards of normality have been changed, for the worse.
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