UAE cancels Iraq debt, names new ambassador

The Abu Dhabi government announced the debt relief and the naming of a new 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 made 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 local businessmen it was a "swift and courageous" decision.

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

WAM said the debt was $4 billion excluding interest. A UAE official who spoke on condition of anonymity because he was not authorized to speak to the media said the total debt was $7 billion with interest.

Iraq has been appealing for relief of at least $67 billion in foreign debt--owed mostly to Arab nations that have been reluctant to forgive Iraq's belligerence during Saddam Hussein's regime.

In addition, the U.N. Compensation Commission says $28 billion remains to be paid for Iraq's 1990 invasion of Kuwait. Iraq now gives 5 percent of its oil revenue to meet the compensation claims.

Al-Maliki's American backers also have pushed Arab states to restore ties with Iraq, where violence has declined by 70 percent over the past year. Neighboring Jordan named an ambassador last week, and Kuwait and Bahrain say they will soon follow suit.

White House spokesman Gordon Johndroe said the U.S. welcomed the UAE decision to cancel the Iraqi debt, appoint an ambassador and reopen their embassy in Baghdad.