Here is a clue — likely one of the “richer” countries on the planet due to all the oil revenue they rake in. At least, on paper it might seem that way. But despite the country’s source(s) of incredible income, Iraq is having no success getting a loan from any international banks. The reason? They have a poor credit rating and no international bank or U.S. weapons firms will extend them any credit.

Sort of parallels the blog post we wrote a month or so back about Michael Jackson, entitled “Fame and Fortune No Excuse for Poor Credit Score”. Perhaps a more appropriate title for this post is “Wealth and Power No Excuse for Poor Credit Score”.

 The deal is, Iraq wants to acquire American made weapons, not that “second rate” bargain-basement stuff made in China. According to an articleat military news site strategy.com, they are looking to purchase items such as M-1 tanks, helicopters, Stryker armored vehicles and even F-16 fighter jets.

The problem is Iraq’s prior credit history (sound familiar)? They tarnished it by defaulting on over 10 billion dollars in loans from their Arab neighbors some years back, and apparently the 7 year rule (as far as negative credit history counting against you) does not apply to a country “behaving badly”. An excerpt from the article in strategy.com:

Russia was stiffed for over $5 billion in military material, and recently wrote off those debts (in return for access to oil field development deals and other opportunities). In the last decade of Saddam’s rule, he burned up what little fiscal credibility Iraq still had.  When Saddam was overthrown in 2003, Iraq was not only broke, but possessing one of the lowest credit ratings on the planet. Saddam screwed everyone, and the international banks have a long memory for that sort of thing.

Perhaps Iraq is in the midst of a true reality check given that the world is beginning to embrace the idea that we all need to reduce our dependence on foreign (and all) oil. Or better yet, how about we suggest the government initiate a “cash for F-16 and M-1 tank clunkers” program and we can sell the used, less efficient older versions to our friends over there in the Gulf for pennies on the dollar. Or we could be really mean and offer them the services of some American debt settlement companies.

What do you think readers, have any ideas? Share them with us via a comment if so — we can all use a laugh!

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