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Oil-Rich United Arab Emirates Cancels Total Iraq Debt

The United Arab Emirates canceled billions of dollars of Iraqi debt Sunday 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 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.

"We appreciate the Emiratis' recognition that a secure and prosperous Iraq is in the interests of everyone in the region. Prime Minister Maliki and the government of Iraq should also be applauded for their continued outreach to their neighbors, and their efforts to advance a positive agenda through regional diplomacy," said Johndroe, who was in Japan with President Bush at the Group of Eight meeting of major powers.

In Abu Dhabi, Iraqi government spokesman Ali al-Dabbagh said Abdullah al-Shehi, the UAE's former head of mission in India, was named ambassador to Iraq. The country said last month that an appointment was upcoming.

The UAE withdrew its ambassador to Iraq after the 2003 U.S.-led invasion and after one of its diplomats was kidnapped and later released.

Sunni militant groups like al-Qaida in Iraq, mistrustful of the government, have warned Arab states not to open embassies in Baghdad. The capital's first major car bomb of the war struck the Jordanian Embassy, killing 19 people in the summer of 2003. Diplomats from Egypt, Morocco, Bahrain, Turkey and Sudan have all been either killed, wounded or kidnapped in Iraq.

Al-Maliki chided his Arab "brothers" at an April conference of Iraq's neighbors in Kuwait, saying he found it "difficult to explain why diplomatic exchange has not taken place." Most major Western diplomatic missions in Baghdad are located in the U.S.-protected Green Zone.

Iraq's deputy foreign minister, Labid Abbawi, said Sunday that the country plans to open consulates soon in Detroit, Michigan, and San Diego. He told The Associated Press they chose those cities because they have large Iraqi communities.