20 June 2006

Japan offers Iraq loans amid withdrawal plans

By Shingo Ito
Agence France Presse, 19 June 2006

Japan has pledged to keep supporting Iraq after it ends its historic troop mission and offered loans to build bridges and roads in the area where its forces have been working.

Iraq announced Monday that its troops would take over from coalition forces in the southern province of Al-Muthanna, the first such move in the war-torn country, which paves the way for the departure of Japanese troops.

The loans for the region, whose capital is Samawa, are part of the package Japan has pledged to Iraq, which it has begun to hand over in a sign of support for the new government.

"Japan has provided encouraging support and even if the Self-Defense Forces withdraw from Samawa, we want to continue that support," Prime Minister Junichiro Koizumi told a news conference.

"As a responsible member of the international community, Japan will continue considering and carrying out what it can do for the stability of Iraq," he said.

Koizumi declined to say when Japanese forces would pull out, but Kyodo News said he would make the announcement Tuesday.

Foreign Minister Taro Aso said Sunday that Koizumi was likely to announce the pullout ahead of his meeting with US President George W. Bush later this month.

Japan has deployed 600 troops in Samawa, its first military mission since World War II in a country where fighting is under way, in what is widely seen as an effort to show Tokyo is more than an economic power.

The troops -- known formally as the Self-Defense Forces -- are banned from combat under the pacifist 1947 constitution and have been protected by Australian, British and Dutch forces.

Iraqi Prime Minister Nuri al-Maliki said Monday in Baghdad that local forces will move into Al-Muthanna next month.

Japanese media previously said that Tokyo would withdraw as soon as the pullout is announced.

But Australia, which stepped up its deployment to guard Japanese troops, will stay in the region to back up the Iraqi forces, Prime Minister John Howard said.

The latest loans will total up to 3.35 billion yen (29 million dollars) for the construction of bridges and roads, a foreign ministry statement said.

"Development of the transportation network is an urgent challenge in reconstructing the economy and society of Iraq," it said.

Japan suspended concessional loans to Iraq in 1985 as part of global economic sanctions on Saddam Hussein in the midst of the Iran-Iraq war.

Tokyo, a close US ally, pledged up to 3.5 billion dollars in soft loans and 1.5 billion dollars in grants to rebuild Iraq after Saddam's overthrow, but had held up the loans in light of instability.

Japan will soon sign a deal with the Iraqi government on the latest loans, along with the release of 76.5 billion yen which was already announced in March to help finance irrigation and power projects.

The loans carry an interest rate of 0.75 percent and must be repaid over 40 years, including a 10-year grace period.

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Citation: Shingo Ito. "Japan offers Iraq loans amid withdrawal plans," Agence France Presse, 19 June 2006.
Original URL: http://news.yahoo.com/s/afp/20060619/wl_mideast_afp/japaniraqaidmilitary
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