Saudi Arabia to forgive 80% Iraq debt; US leads

"Saudi Arabia has agreed to forgive 80 percent of the more than $15 billion that Iraq owes the kingdom, Iraqi and Saudi officials said yesterday, a major step given Saudi reluctance to provide financial assistance to the Shiite-dominated government in Baghdad.
. . . The Bush administration has been working for months to persuade other governments to follow the U.S. lead and write off all of their shares of Iraq's debts, which Jabr said total $140 billion. Most of those loans date to Iraq's war with Iran from 1980 to 1988, when the United States, Saudi Arabia and other governments saw Iraq as a buffer against Iran.
Iraq also owes $199 billion in compensation for the Persian Gulf War that followed Iraq's 1990 invasion of Kuwait, analysts said."
. . . After a U.N.-brokered cease-fire ended the war with Iran, Iraq was unable to win debt relief from key allies, including Sunni countries in the Gulf and Russia, its primary weapons supplier. That heightened economic tensions that contributed to Iraq's decision to invade oil-rich Kuwait in 1990."

source
Mufson, Steven & Wright, Robin. (The Washington Post). In a Major Step, Saudi Arabia Agrees to Write Off 80 Percent of Iraqi Debt. April 18, 2007.

posted: sunday, april 22, 2007, 2:33 AM ET

tags: iraq saudi arabia debt