UAE cancels billions in debt owed by Iraq

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 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, whom he urged to unite behind al-Maliki's government.

WAM said the debt was $4billion, not including 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 when interest was added.

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'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 like the UAE to restore ties with Iraq, where violence has come down by 70 percent over the past year. Jordan, Iraq's neighbor to the west, has named an ambassador last week, and Kuwait and Bahrain say they will soon follow suit.

Meanwhile, a top Iraqi official said Sunday the U.S. has presented Iraq with a proposed list of military facilities Washington wants to maintain control of as part of negotiations between the two countries on a long-term security agreement.

Interior Minister Jawad al-Bolani said the timing for how long the U.S. would control each facility before handing it over to the Iraqis would be based on the security situation in each area. But al-Bolani stressed that talks on this issue were ongoing.

The Iraqis, he said, want to take control of the 20,000 detainees in U.S. custody and curb the U.S. military's authority to arrest Iraqis. No comment was immediately available from the U.S. Embassy.