Afghanistan Lauds Forgiveness of $10 Billion Debt

Afghanistan on Wednesday lauded a decision by the United States, Russia and Germany to cancel its debts to the three countries, totaling more than $10 billion.

"After 30 years of devastation, we are starting from nothing and any move such as this helps the reconstruction of Afghanistan," said Khaleeq Ahmed, a spokesman for President Hamid Karzai.

The Bush administration said Tuesday it will forgive the entire $108 million that Afghanistan owes to the United States.

"The government and people of Afghanistan are working diligently to build a sustainable market economy despite many challenges," State Department spokesman Sean McCormack said.

The debt will be canceled through the procedures of the Paris Club, an informal group of creditor nations which also includes Russia and Germany.

Russia said Monday it would write off $10 billion owed by Afghanistan if the country fulfills the requirements of a World Bank program aimed at reducing poverty and takes steps to develop economic and trade ties with creditor nations.

"We call on other bilateral creditors to join our decision," the Foreign Ministry said in a statement.

Karzai's government has not recognized the debt to Russia, which dates back to the Soviet era. The Soviet Union invaded Afghanistan in 1979, installing a pro-Moscow Communist government. The decade-long occupation ended with a withdrawal of Soviet forces in 1989 under relentless pressure by U.S.-backed mujahedeen rebels.

Germany has also said it will forgive $44 million in trade debts owed by Afghanistan. The announcement came at a conference last week in London where nearly 70 nations and international bodies pledged $10.5 billion to help Afghanistan fight poverty, improve security and crack down on the drug trade.

The pledges were intended to fund the goals set out in a five-year plan delegates signed Tuesday for Afghan redevelopment.

Secretary of State Condoleezza Rice last week praised the progress Afghanistan has made since a U.S.-led coalition toppled the hard-line Taliban regime in 2001. The United States plans to give $1.1 billion in aid next year.

"The transformation of Afghanistan is remarkable but incomplete," Rice said at a conference on Afghanistan in London. "And it is essential that we all increase our support for the Afghan people."

The debt cancellation will remove a big worry from Karzai's government, installed following the U.S.-led invasion in 2001 and later winner of national elections. Karzai is struggling to deal with an upsurge in violence in recent months.

More than 1,600 people have died in the past year as militants have stepped up attacks. About 20 suicide attacks have been reported across Afghanistan in the past four months.