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Iraq Welcomes Russian Debt Write-Off
11 February 2008 (Associated Press)
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Iraqi President Jalal Talabani welcomed Friday an expected Russian decision to write off 91 percent of Iraq's estimated $13 billion debt, calling it a "historic turning point" in relations between the two countries.

A diplomat at the Iraqi Embassy in Moscow said Thursday that the pact would be signed during a visit by Iraq's Foreign Minister Hoshyar Zebari that starts Sunday. A Russian Finance Ministry official also said a debt-restructuring deal was planned.

They both spoke on condition of anonymity because they were not authorized to make public statements.

Talabani and other Iraqi officials met Friday with a delegation led by the Russian ambassador to Iraq to discuss expanding ties. Russia strongly opposed the U.S.-led invasion in 2003 that overthrew Saddam Hussein.

"It is expected that a new agreement will be signed to reduce the Iraqi debt by a proportion of 91 percent," Talabani's office said in a statement. "The two sides have agreed that this will be a historic turning point in relations between the two countries."

The decision to write off Iraqi debt was seen in part as an effort to improve Russian companies' chances of winning oil contracts and other deals in Iraq.

The Iraqi government has complained that it cannot support its huge Saddam-era debt to various countries — amounting by some estimates to more than $60 billion. The Bush administration has urged other countries to follow its lead and write off Iraq's debts as a way for Baghdad to channel more money to rebuilding.

In June, China announced it was forgiving Iraq's debt. It didn't give figures, but the Iraqis said they owed China about $8 million.

But some of Iraq's major creditors, including Saudi Arabia and Kuwait, have refused to do so until they see progress on national reconciliation, economic reform and security.

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