Iraq renews calls for debt cancellation

Iraq today renewed a call to foreign creditors to cancel about $60 billion in debts and asked that compensation payments imposed…

Iraq today renewed a call to foreign creditors to cancel about $60 billion in debts and asked that compensation payments imposed after Saddam Hussein's invasion of Kuwait be scrapped.

Iraqi Prime Minister Nuri al-Maliki made the call at an international conference convened in Stockholm to assess progress in a five-year plan to rebuild Iraq.

"Iraq is not a poor country. It possesses tremendous human and material resources, but the debts of Iraq . . . which we inherited from the dictator hamper the reconstruction process," Mr Maliki told the conference.

"We are looking forward to the brother countries writing off its [Iraq's] debts, which are a burden on the Iraqi government," he said, a pointed reference to Gulf states Kuwait and Saudi Arabia, which are Iraq's biggest Arab creditors.

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About $66.5 billion of Iraq's $120.2 billion foreign debt has been forgiven, according to US State Department estimates. More than half of the outstanding debt is owed to Gulf Arab states, mainly Saudi Arabia and Kuwait.

The foreign ministers of Saudi Arabia and Kuwait were not present at today's conference, with junior officials representing both countries. A member of the Iraqi delegation said they were disappointed by the foreign ministers' absence.

Arab League chief Amr Moussa backed Mr Maliki's call for debt relief saying: "I call upon everybody, including the Arab countries, to accelerate this issue."

Iraq is pushing for an end to the billions of dollars it pays in compensation for Saddam's 1990 invasion of Kuwait. At present it is required to set aside 5 per cent of its oil revenues, which Iraq says will amount to $3.5 billion this year.

Mr Maliki made a similar debt relief call at a conference of Iraq's neighbours in Kuwait in April, with Iraqi officials noting at the time that while many of Iraq's major creditors had cancelled its debts, its Arab neighbours had not followed suit.

The Stockholm conference is the first annual review of the International Compact with Iraq agreed in the Egyptian resort of Sharm el-Sheikh last year, which committed Iraq to implement reforms in exchange for greater international support.