Russia forgives 93 percent of Iraqi debt to save its collapsing economy

Russia writes off 93 percent of the Iraqi debt. The amount equals 12 billion dollars. The rest of the Iraqi state debt to Russia in the amount of 900 million dollars will be restructured for 17 years, as Russia’s Finance Minister Aleksey Kudrin said. The agreement on the regulation of Iraq’s state debt to the Russian Federation was signed on February 11, 2008.

The volume of Russian investments in the Iraqi economy can reach up to four billion dollars, Kudrin said.

“We are interested in the complete recovery of the Iraqi economy. A lot of Russian companies are ready to work on the Iraqi market. These are companies working in the field of energy objects construction, machine-building and oil industry,” Kudrin said.

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, the AP reports.

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.

In the meantime, Russia’s President Putin had a meeting Jordan's King Abdullah II for talks on the situation in the Middle East as well as trade and military cooperation.

It was the Jordanian leader's second meeting in a year with the Russian president, who has sought to increase Russia's influence in the Middle East.

Russia's sales of sophisticated anti-aircraft missiles and other weaponry to Syria and Iran have upset some Middle Eastern leaders who fear the armament could spark a new arms race in the region.

Putin said military and technical cooperation between Russia and Jordan has increased in recent years, the AP reports.

"Equally important is the special role that Russia and you are playing and will play to solve many of the outstanding crises in the Middle East," Abdullah told Putin.

Before his visit, Abdullah warned that an international conference held in the United States last November could be the last chance for peacemaking between Palestinians and Israelis.

Abdullah, an important U.S. ally who maintains cordial ties with Israel under a 1994 peace treaty, is an ardent supporter of a Palestinian-Israeli peace settlement. He is concerned that the growing influence of extremists in the region may threaten moderates like himself.

Abdullah also said during his two-day visit to Moscow that he would discuss with Putin the possibility of Russian assistance with Jordan's efforts to develop atomic energy program.

Abdullah met earlier with First Deputy Prime Minister Dmitry Medvedev _ the man who is expected to succeed Putin as president.

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