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Iran, Iraq discuss economic cooperation, debt

Tehran, Jan 22, IRNA -- Minister of Economy and Finance Safdar Hosseini said here Saturday that Iran is ready to share its economic experiences with Iraq.

The ministry's public relations department reported that in a meeting with Iraqi counterpart Adel Abdul Mahdi, Hosseini referred to the upcoming election in Iraq.

"With the incoming government the Tehran-Baghdad relations will strengthen," he added.

Iran is ready to provide experiences it has gained on economic planning and policy. "Specifically, Iran's experiences on banking, customs, investments and treasury affairs could be beneficial for Iraq."

The Iraqi economy minister lauded Iran's cooperation in the past and called for finding resolutions on the issue of the loans owed by the country to Iran.

"The Iraqi government is hopeful that the loans by Iraq will be mitigated based on the Paris Club decision last month."

He referred to the areas of cooperation between the neighboring states saying that currently, 'Agricultural' and 'Meli' Banks of Iran have obtained permits to operate in Iraq.

"There are more applications for other Iran-based banks to open branches in the country, Mahdi underlined.

He then described the operation of international banks in Iraq. "International banks can open branches with participation of Iraqi investors or 100 percent of foreign capital ownership," he said.

The Paris Club agreed last month to cancel 80 percent of the debt Iraq owes its members. Mahdi said the Paris Club moves would help speed Iraq's reconstruction.

"That is really our second liberation after the fall of Saddam Hussein, because liberating our economy is a very important process of liberating Iraq," said Mahdi

The agreement, which will slash Baghdad's debt to Club creditors to dlrs 7.8 billion from dlrs 38.9 billion, would be put into effect in three steps over the next four years.

The Paris Club's 19 members include the Group of Seven industrialized countries -- the United States, Japan, Canada, Germany, Britain, France and Italy -- as well as other Western European states, Russia and Australia.

Other creditors who are not in the Paris Club but could follow its lead include Saudi Arabia, Kuwait and Eastern European states.

Under the deal, the Paris Club nations will immediately cancel 30 percent of the debt owed to them by Iraq.

An additional 30 percent waiver would follow in 2005 once an economic program with the International Monetary Fund is approved. A further 20 percent would be pardoned in 2008 after a review of the implementation of the IMF economic program.

... Payvand News - 1/22/05 ... --

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