Iraq Report: January 23, 2004

The United Arab Emirates (UAE) and Qatar have both agreed to forgive most of the some $7 billion in Iraq debt owed to them by the former Hussein regime following meetings with U.S. envoy James Baker, international media reported this week. Iraq is believed to owe the UAE about $3 billion and Qatar around $4 billion.

According to, Shaykh Khalifa bin Zayid al-Nahayan, the crown prince of the UAE capital Abu Dhabi, said that his country was ready to begin “urgent negotiations” over cutting Iraq’s debt. An unnamed Qatari official said that the debt waiver would allow the Iraqi people “a chance to build a free and prosperous country,” the website reported. U.S. officials are reportedly hoping that the agreements will prompt Saudi Arabia to make similar concessions. The Gulf nation claims Iraq owes it some $30 billion.

Meanwhile, Kuwaiti Prime Minister Shaykh Sabah al-Ahmad al-Jabir al-Sabah said on 21 January that Kuwait is willing to “significantly” reduce Iraq’s debt to it, AFP reported on the same day. “The state of Kuwait will strive with other countries to achieve a significant reduction of Iraq’s debts in the course of this year, provided this is approved by the country’s constitutional institutions,” al-Sabah said. Kuwait estimates Iraq’s debt at about $16 billion. (Kathleen Ridolfo)

The UAE has struck an agreement with Germany to train Iraqi police personnel in Abu Dhabi, Voice of the Mujahidin reported on 20 January. German experts will assist in the training, which reportedly will be funded by the Germans as part of its contribution to rebuilding Iraq. The policemen will be trained with Japanese equipment, the radio reported. The size of the police force has not been announced, nor has a training date. Reports of a possible agreement between the two states to train Iraqi police first surfaced in October 2003. According to Voice of the Mujahidin, the agreement was concluded during a 19 January meeting between Shaykh Hamdan bin Zayid al-Nahyan, UAE’s deputy prime minister and minister of state for foreign affairs, and German Interior Minister Otto Schily. The “Financial Times” reported on 16 December 2003 that France might also participate in the training. (Kathleen Ridolfo)

Widespread currency speculation has Egyptians buying up new Iraqi dinars for a pittance, hoping to strike it rich once the currency rises in value, international media reports. Labeled the “Bremer dinar” by Egyptian newspapers, the new currency if traded, could fetch around 232 dinars for one Egyptian pound, reported on 16 January.

According to the website, Egypt’s central bank has ordered banks and foreign exchange bureaus in the country not to deal with the Iraqi currency, and state security services have been ordered to crack down on the black market. Muhammad al-Abyad, head of the Egyptian Foreign Exchange Association told NBC news that some Egyptians see currency speculation as an easy way to get rich, and are tempted to speculate for a lack of better investment options. Egyptian authorities report that they are seeing more and more cases of travelers attempting to smuggle dinars into the country.

Police confiscated $50,000 in Iraqi dinars at the Alexandria airport and another $38,000 at the Luxor airport last week. According to MENA, four Egyptians and one Kuwaiti were carrying the currency at Alexandria, while an Egyptian traveling from Kuwait was caught at Luxor. Egyptian media reported last week that one in 10 passengers inspected upon entry from Jordan, Kuwait, and the Gulf States were found to be carrying Iraqi dinars. Egyptian law does not ban the possession of foreign currency, but it requires that foreign currency be declared to customs’ officials upon entry. Currency speculation is illegal.

Meanwhile, Kuwaiti Charge d’affaires Faysal al-Adwani urged Kuwaitis visiting Egypt to leave their Iraqi dinars at home, KUNA reported on 8 January. Al-Adwani said that a number of Kuwaiti nationals are now under arrest in Egypt for suspected currency speculation. (Kathleen Ridolfo)

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