UAE cancels $5.8 billion in Iraq debt

The United Arab Emirates says said it will scrap $5.8 billion in debts owed by Iraq, Emirati foreign minister Sheikh Abdullah bin Zayed al-Nahayan said on Monday after a meeting with his Iraqi counterpart.

“An agreement will be signed soon to lay out the legal framework for waiving old Iraqi debt of $5.8 billion,” Shaikh Abdullah said during a joint news conference hosted with Iraqi foreign minister Hoshyar Zebari.

Zebari thanked the UAE for cancelling the debts, which he said was “a very heavy burden” on Iraq.

“The relations between the two states did not stop [in the past 10 years], but today we started the official framework of co-operation,” Zebari said.

The debt date backs to the 1980s when Iraq had borrowed money from Gulf states for assistance with Iraq’s long-running war with Iran.

The move follows a similar one in 2008, when the UAE wrote off almost $7 billion worth of Iraqi debt left over from the era of Saddam Hussein.

Trade between Iraq and the UAE reached more than $4.5 billion last year, the foreign ministers said.

Zebari, meanwhile, called cooperation between Iraq and the Gulf Cooperation Council members in security and military areas “good,” adding that it was Iraq’s destiny to be with its sister countries in the Gulf.