Delegates discuss debt and diplomacy

US Secretary of State Condoleezza Rice on Thursday backed Iraqi Prime Minister Nuri al-Maliki’s appeal for his country's debts to be cancelled while addressing a global conference in Sweden.

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Rice also urged the world community and especially Iraq's Arab neighbours to re-establish diplomatic ties with Baghdad.

Speaking before delegations from around 100 governments and organizations, Maliki asked the international community "to end the international sanctions that were imposed on Iraq because of the previous regime and to write off debts."

These were an "impediment against reconstruction and development," he told the conference, the first follow-up meeting since a five-year peace and development plan was adopted last year.

According to the Iraqi government, Iraq's total debt, excluding interest, is some $140 billion, including $10 billion owed to Saudi Arabia and a little less to Kuwait.

That figure rises sharply if the culminated interests are counted.

Much of the debt dates back to the country's war with Iran between 1980 and 1988.

In Stockholm, Maliki said Iraq needed "to get rid of this burden," but stressed that the country had made great progress toward creating long-term stability in all areas.

In her comments, Rice said that Iraq's Shiite leadership needs greater support to become stable and prosperous.

"And I encourage everyone to increase their diplomatic, economic, social and cultural engagement with the people of Iraq," Rice told the Iraq Compact Annual Review Conference.

"We especially urge Iraq's neighbours and friends to strengthen these ties through official visits to Iraq, the reopening of embassies and consulates and the appointment of ambassadors," Rice said.

She said Iraq could do its part by "appointing Iraqi ambassadors to Arab countries."

A senior US official told reporters on the condition of anonymity that Jordan, Egypt, the United Arab Emirates and Bahrain were taking steps toward establishing a diplomatic presence in Iraq.

No Arab country has had a permanent diplomatic mission in Baghdad in the past three years, not just because of security risks but apparently because of the Iraqi government's perceived tilt toward non-Arab and Shiite Iran.

But the US official said Arab states have been encouraged by the Shiite-led Iraqi government's recent crackdown on Shiite militias as well as motivated by a need to check Iranian-backed power plays in Lebanon.

Rice also called for countries to relieve Iraq's debt load, an apparent new appeal to oil-rich Gulf monarchies.

"Since the compact was launched, Bulgaria, Serbia, Bosnia, and Slovenia, and Russia have agreed to major reductions in Iraq's Saddam-era debt, and we encourage countries that have not yet done so to do so promptly," Rice said.

The International Compact with Iraq, or ICI, is a five-year peace and economic development plan for the war-torn country, adopted at the May 2007 international gathering at the Egyptian Red Sea resort of Sharm el-Sheikh.

At that meeting senior officials from more than 60 countries and organizations promised to cancel $30 billion of Iraqi debt.

So far Sweden has written off 1.5 billion kronor ($250 million) of Iraqi debt. About half a billion kronor remains, which Prime Minister Fredrik Reinfeldt is prepared to write off, he told the TT news agency.

"We are ready to do it but we will see if there is another way to bring about and secure improvements in Iraq," he said.

On the flight to Stockholm on Wednesday, Rice was optimistic Saudi Arabia and Kuwait would ease Iraq's debts even though visits last month to Iraq, Bahrain and Kuwait produced no concrete Gulf Arab commitments on debt relief.