UAE retires Iraqi debt

Has Iraq turned a corner in the Arab world as well?  After years of inaction, the United Arab Emirates has forgiven Iraqi debt, and welcomed the Maliki government into the fractious band of what had been an exclusively Sunni club.  The action’s impact goes beyond the $7 billion in write-offs:

UAE President Sheikh Khalifa bin Zayed Al Nahyan promised to “put out these debts,” appoint an ambassador to Baghdad, and “help Iraq building the holy shrines that were targeted by the terrorists,” al-Maliki said in a written statement.

Al-Maliki and the sheikh met Sunday, the first day of a two-day official visit. Al-Maliki was accompanied by the Iraqi ministers of Interior, Commerce and Industry. ….

Debt relief is a major issue for Iraq, and the United States has urged other nations to forgive Iraqi debt, most of which is held by Arab states, U.S. Deputy Treasury Secretary Robert Kimmitt said in late May.

Also, the UAE Cabinet on Sunday nominated Abdullah Ibrahim al-Shehhi to be the country’s ambassador to Iraq.

The Sunni nations have withheld full recognition of the Shi’ite government in Baghdad for several years, claiming security issues.  Ironically, the UAE and Egypt pulled out in 2005 not because of Shi’ite militia activity against Sunnis, although that was a major stumbling block, but because of al-Qaeda attacks from nominally Sunni lunatics.  Only Syria and Jordan have representation in Iraq, while the rest of the Arab world has waited to see how Iraq would survive.

The act of naming an ambassador and forgiving debt incurred by Saddam Hussein sends a signal to the rest of the region.  With Maliki offering diplomatic resistance to Iran, the other Arabs can feel more secure in supporting Nouri al-Maliki, who started off his term looking like a lackey of Tehran.  He has Moqtada al-Sadr almost completely marginalized, and the alliances with Sunni tribal leaders has built confidence in Maliki’s ability to work with Sunni nations as well.

Other Arab nations may soon fall in line.  They mistrust the rise of Iran as a potential hegemon in the region, and need Iraq as a bulwark against the mullahcracy’s ambitions.  If they all follow the example of the UAE, it will free Iraq to spend its money on reconstruction rather than debt relief, which will add to its stability and strength.  In a few years, it could serve as both an example to the region and a serious counterweight to Tehran.

The UAE has seen victory in Iraq, and it just placed a $7 billion bet on Iraq’s future.  Expect the other Arab nations to soon follow suit.