UAE cancels billions of dollars debt owed by Iraq

ABU DHABI: The United Arab Emirates has cancelled billions of dollars of Iraqi debt and moved to restore a full diplomatic mission in Baghdad, evidence of Iraq's improved security and growing acceptance of its Shiite-led government.

The Abu Dhabi government announced yesterday the debt relief and the naming of a new UAE ambassador to Baghdad shortly after Iraqi Prime Minister Nouri al-Maliki began a visit to the wealthy Gulf nation.

The news was sure to bolster al-Maliki's government, which has been urging Iraq's Sunni Arab neighbors to forgive loans taken during Saddam Hussein's regime and restore diplomatic relations.

Al-Maliki, who has been in office since May 2006, thanked the UAE for the debt cancellation, telling a meeting with local businessmen that it was a "swift and courageous" decision.

The Emirates' official news agency, WAM, quoted the country's president, Sheik Khalifa bin Zayed Al Nahyan, as saying he hoped canceling the debt would lighten the "economic burden" facing Iraqis, who he urged to unite behind al-Maliki's government.

WAM said the debt was USD four billion not including interest. A UAE official who spoke on condition of anonymity because he was not authorised to speak to the media said the total debt was USD seven billion when interest was added.