United Emirates scraps billions in Iraqi debt, names Baghdad envoy

ABU DHABI, July 6, 2008 (AFP) - The oil-rich United Arab Emirates on Sunday waived Iraq's debt of nearly seven billion dollars and named an envoy to Baghdad, in a twin boost timed with a visit by Iraq's prime minister. President Sheikh Khalifa bin Zayed al-Nahayan told Prime Minister Nuri al-Maliki the UAE has "decided to write off all debts owed by Iraq totalling four billion dollars... plus accrued interest," state news agency WAM reported. An Emirati official, confirming the decision, told AFP the debt and interest amounted to just under seven billion dollars. The UAE, a close US ally, also named its current envoy to India as ambassador in Baghdad, the official said. Washington has been pushing its Arab allies to send ambassadors to Baghdad and ease Iraqi debt to help anchor volatile post-Saddam Hussein Iraq in the Arab world. "The UAE cabinet, at its meeting today, approved the appointment of its current ambassador to India, Abdullah Ibrahim al-Shehhi, as its ambassador to Iraq," the official told AFP. "The Iraqi government has already approved the nomination." The appointment, confirmed in a cabinet statement, came a month after UAE Foreign Minister Sheikh Abdullah bin Zayed al-Nahayan became the first high-ranking official from an Arab state in the Gulf to visit Iraq since the 2003 US-led invasion. He said at the time that Abu Dhabi would soon name an ambassador to Baghdad. The UAE withdrew its most senior diplomat -- a charge d'affaires -- from Baghdad in May 2006 after another diplomat was kidnapped by Islamist militants and held for two weeks. An Iraqi government spokesman said on Thursday that Jordan's King Abdullah II would visit Iraq next week for the first such trip by an Arab head of state since the invasion. Jordan, another close US ally, announced it had appointed an ambassador to Iraq where its embassy has been run by a charge d'affaires since it came under deadly attack in 2003. The Sunni-ruled Arab monarchies of the region had been reluctant to upgrade ties with Iraq, not just for security reasons but also because of its Shiite-led government's perceived tilt toward non-Arab Shiite Iran. A US official said Arab states had been encouraged by the crackdown on Shiite militias by Maliki, himself a Shiite, and motivated by a need to check Iranian-backed power plays in Lebanon. The UAE hopes that its decision to cancel Iraq's debt "will help alleviate the economic burdens endured by the brotherly Iraqi people," WAM quoted the UAE president as telling Maliki, who arrived earlier Sunday on a two-day visit. It also aims to "help the Iraqi government implement reconstruction plans and rehabilitate institutions and facilities," he said, adding that Abu Dhabi would not hesitate to "provide all kinds of financial and moral aid" to Iraq. Sheikh Khalifa added that Abu Dhabi's decision to reopen its embassy in Baghdad underlined its belief in "the importance of Iraq's interaction with its Arab environment." Saudi Arabia, one of Washington's key regional allies, said in April it would reopen its embassy in Iraq only when security was restored. Before the UAE announced the debt writeoff, the US State Department had said Iraq's debt has been reduced by 66.5 billion dollars over the past three years, including a total of 42.3 billion dollars cancelled by Paris Club members. US Deputy Treasury Secretary Robert Kimmitt said in May that 50 billion to 80 billion dollars remain, with a "significant majority" owed to Arab countries. The UAE's decision will help improve Baghdad's credit rating and "boost the restoration of security and stability by paving the way for Iraq to shed the burdens weighing down its economy," Maliki told Khalifa, according to WAM.