x Abu Dhabi, UAETuesday 25 July 2017

Iraq's $7bn debt written off

Iraqi PM says cancellation will back up the process of re-establishing security and stability in his country.

Sheikh Khalifa bin Zayed, President of the UAE, greets Nouri al Maliki, the prime minister of Iraq.
Sheikh Khalifa bin Zayed, President of the UAE, greets Nouri al Maliki, the prime minister of Iraq.

ABU DHABI // The UAE has written off almost US$7 billion (Dh25.7bn) worth of Iraqi debt left over from the era of Saddam Hussein. The surprise move made the UAE the first Gulf state to totally wipe out its Iraqi debt. It was announced by Sheikh Khalifa bin Zayed, President of the UAE and Ruler of Abu Dhabi, yesterday during a visit to Abu Dhabi by Nouri al Maliki, the prime minister of Iraq. The debt, which consists of loans and grants totalling $4bn plus interest and arrears, dates from the early to mid-1980s, when Gulf states lent money to help Iraq during its long-running war with Iran.

Dozens of European countries and the US, Canada and Japan, which also loaned money to Iraq during the 1980-88 war, agreed in 2003 to write off at least 80 per cent of the $42bn they were owed. Iraq is still estimated to owe up to $80bn in loans dating from before the US-led invasion in 2003. Loans since that time are estimated to total around $1.5bn. A government source said the loans were not on the agenda for yesterday's meeting, and although the Iraqi delegation may have hoped for some debt relief it was not at all aware of the possibility of a total write-off.

Announcing the cancellation of the debt, Sheikh Khalifa said Iraq and the UAE shared close ties and promised to do everything possible to help Iraq rebuild. "The decision is meant to express the friendship and solidarity that exists between our two countries, and to help the Iraqi government carry on its plans and projects for the reconstruction of Iraq and the rehabilitation of its public services," Sheikh Khalifa said, quoted by the state news agency WAM.

"I hope that the decision will help alleviate the economic burden faced by the Iraqi people. The UAE will provide Iraq with every kind of moral and material support." Thanking the UAE, Mr Maliki said: "The cancellation of the Emirati debt will contribute to improving the situation in Iraq on the economic level, and will back up the process of re-establishing security and stability in the country."

Sheikh Khalifa, Mr Maliki and Sheikh Mohammed bin Rashid, the Prime Minister and Vice President of the UAE, as well as a number of Iraqi and UAE ministers went on to discuss efforts to try to end the Iraqi insurgency. "Stability and security in Iraq are the cornerstones of any efforts to rehabilitate the state institutions and recover the role of Iraq in the region and internationally," Sheikh Khalifa said.

"It is necessary to help Iraq by all means to achieve this aim." Sheikh Abdullah bin Zayed, Minister of Foreign Affairs, said the decision to cancel Iraq's debt was a confirmation of the solid relationships linking the two countries and would boost bilateral co-operation. The UAE was convinced that cancellation of debt and appointment of an ambassador would reinforce links with Iraq and open avenues for a wider co-operation, based on the Emirates' commitment to playing an effective role in backing Iraq and consolidating the nation's stability, he said.

Last month, Sheikh Abdullah became the first high-ranking official from the GCC to visit Iraq since the 2003 invasion. In 2006, a UAE diplomat was held hostage for 15 days in Iraq following an ambush that killed his driver. Around 200,000 Iraqis live in the UAE, many of whom fled here during the violence that erupted in the wake of the invasion. Mr Maliki arrived in Abu Dhabi at noon yesterday for a two-day visit. He was welcomed with a banquet at Mushrif Palace that was also attended by Abdul Aziz al Ghurair, the Speaker of the Federal National Council, Sheikh Tahnoun bin Mohammed al Nahyan, the representative of the ruler in the eastern region, Haza bin Zayed, the National Security Advisor, Lt Gen Saif bin Zayed, the Minister of the Interior, and other high ranking sheikhs.

@Email:gmcclenaghan@thenational.ae