The UAE has written off Iraq’s $5.8bn of debt after the country’s Foreign Minister Sheikh Abdullah bin Zayed al-Nahayan met his Iraqi counterpart Hoshyar Zebari.
The announcement was made at the eighth meeting of the UAE-Iraqi Joint Committee, which took place on 16 January in Abu Dhabi.
Zebari described the debt, which was used to fund the Iran-Iraq War as “a very heavy burden”.
It is the second time the UAE has written off debts owed to it by Iraq. In 2008, $7bn of debt left over from Saddam Hussein’s era was cancelled.
Both men discussed regional issues, including Iran’s threats to close the Strait of Hormuz, which is critical to the region’s oil market.
Trade between the UAE and Iraq reached $4.5bn in 2011.