Sunday, July 06, 2008

UAE cancels Iraqi debt

The United Arab Emirates has cancelled the entire debt owed to it by Iraq - a sum of almost $7bn (£3.5bn) including interest and arrears.

The Gulf state also appointed a new ambassador to Iraq, in a move which eases Baghdad's diplomatic isolation.

The news was announced during a visit by Iraqi Prime Minister Nouri Maliki.

Correspondents say Iraq's Sunni Arab neighbours have been wary of fostering ties with Iraq's mainly Shia government because of its links with Iran.

Last month, the UAE's foreign minister became the highest-ranking official from an Arab nation to visit Iraq since the US-led invasion in 2003.
The Emirates' official news agency quoted the country's president Sunday as saying the UAE was canceling all US$4 billion in debt owed by Iraq.
Last year, Saudi Arabia announced it would forgive the portion of Iraq's debt it holds, but the Iraqi government has said it has so far failed to do so. American officials have urged patience, saying debt relief takes time.

Emirati president Sheik Khalifa bin Zayed Al Nahyan said Sunday to WAM he hoped canceling part of the debt would "lighten the economic burden facing Iraqi people."

Khalifa also urged Iraqis to unite behind the Shiite-led government and praised its efforts to restore the country's stability and security.
Welcome news. Thank you, Sheik Khalifa.

Addendum: Iraqi electricity output is up. Thanks to Kerplonka! for the pointer.

Addendum 2: Menzie Chinn at Econbrowser shows great insight on Iraq. I'm not saying I agree with Chinn entirely, but the post is thoughtful and more than the kind of low brow analysis you'll get from the press.



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