US forgives $4.1b Iraq debt

WASHINGTON -- The United States yesterday forgave $4.1 billion Iraq owed it and urged other nations not part of an international debt relief agreement to follow suit.

Secretary of State Colin L. Powell and Treasury Secretary John Snow hailed the move as an important contribution to the future of Iraq and its people.

Snow, Powell, and Iraq's finance minister, Adil Abdul al-Mahdi, signed the agreement at the State Department.

Mahdi thanked the US government and its people, describing debt relief as Iraq's ''second liberation after the overthrow of Saddam Hussein."

In agreeing to forgive all of the debt Iraq owes it, the United States is going beyond the 80 percent reduction of $38.9 billion in debt agreed to by the Paris Club of international lenders in November.

The Paris Club includes European countries, the United States, Japan, Russia, Canada, and Australia. Iraq owes another $80 billion to various Arab governments, mainly Saudi Arabia and Kuwait.

''I urge Iraq's other creditors to work quickly in forging agreements like this one to reduce Iraq debt," Snow said.

He also urged Iraq to move quickly in negotiating and implementing an International Monetary Fund standby agreement, which will trigger the full amount of debt reduction agreed on by the Paris Club.