by Kyoko Hasegawa2 hours, 59 minutes ago
Japan on Monday lent some 850 million dollars to visiting Iraqi Prime Minister Nuri al-Maliki's government as the oil-hungry Asian power looks to boost output from the war-torn country.
The Japanese low-interest loans will fund the construction of an oil export facility in Iraq, whose production has tumbled since the US-led invasion that toppled Saddam Hussein four years ago.
Maliki received a ceremonial audience from Emperor Akihito and Empress Michiko at their palace in central Tokyo before holding a series of meetings culminating with a summit with Prime Minister Shinzo Abe.
"Japan's support is a symbol of our friendship and an important milestone in strengthening bilateral relations," Maliki said as he opened talks with Abe.
"Iraq has suffered from the legacies of the past and is struggling to get out of them," Maliki said, adding that reconstruction can support "territorial integrity" in the country torn by sectarian strife.
Maliki was making his first visit to Japan and South Korea, two key economic partners of Iraq, which have both sent troops to help with reconstruction of the nation.
Japan announced it had signed an agreement lending 102.8 billion yen (862 million dollars) to Iraq, repayable over 40 years with a 10-year grace period at an interest rate of 0.75 percent a year.
The money will go to build the oil facility connecting pipelines in the southern province of Basra. It will also fund fertiliser and oil refinery plants and help improve electricity, a Japanese foreign ministry statement said.
The loan is part of six billion dollars in debt waivers and 1.5 billion dollars in aid which Japan announced for Iraq in 2003. Much of the aid is on hold due to concerns about instability.
"Iraq's stability is important for the Middle East and the international community," Abe said as he met Maliki.
"Because of this, Japan has made efforts for Iraq's reconstruction through deployment of the Self-Defence Forces and development aid," Abe said. "I would like to continue supporting Prime Minister Maliki's efforts to reconstruct Iraq."
Japan, the world's second-largest economy, has few natural resources and is almost entirely dependent on the Middle East for its oil.
Japan, which has been officially pacifist since defeat in World War II, took the landmark step of sending 600 troops there on a reconstruction mission.
It marked the first time since 1945 that Japan sent its soldiers -- which it calls the Self-Defence Forces due to the pacifist constitution -- to a country where fighting was under way.
Japan ended the troop deployment last year. But Abe last month decided to extend by two years an air mission flying goods and personnel into Iraq on behalf of the United Nations and the US-led coalition.
The Iraq mission has been unpopular in Japan. Defence Minister Fumio Kyuma caused a stir in January when he said the US decision to invade Iraq was "wrong."
Kyuma stayed away from the controversy in his meeting with Maliki Monday, telling him he hoped that more Japanese firms would invest in Iraq as soon as it is feasible, according to a defence ministry official.