MOSCOW — Iraq’s foreign minister won a long-sought agreement on Monday to write off most of Iraq’s $12.9 billion in debt to Russia, much of it dating to before the first gulf war when Saddam Hussein government purchased Soviet weapons.
Russia had, in principle, agreed to write off the debt as far back as 2004 but had been dragging its feet hoping for assurances that the United States-backed government in Baghdad would honor a large Russian oil claim, also dating to the Hussein era.
On Monday, Iraq’s foreign minister, Hoshyar Zebari, offered no public guarantees. Russian officials said they had won an assurance of favorable treatment, at least. In exchange, Russia will write off all but $900 million of the debt. Separately, Russia agreed to invest $4 billion in Iraq, including the Iraqi oil industry.
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I don't know if it's just me, but 12.9 billion dollars seems like a lot. I know that some of this money is from questionable weapon purchases from sometime ago, but it does say something about Russia and their progression to forgive Iraq of these debts. Some might see Russia in a more positive light now that they know that they are willing to forgive a struggling country of large debts. Although it put them in a positive light this act could possibly hurt their economy. A substantial loss is not good for anyone's economy, and who knows how this will affect Russia.
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