Paris club decision to reduce Iraqi debt by 80 percent

US President George W. Bush has welcomed the decision by the Paris Club of creditor nations to forgive 80 percent of Iraqi debt owed to its members.

"The Paris Club agreement represents a major international contribution to Iraq's continued political and economic reconstruction," Bush said in a November 21 statement from Santiago, Chile, where he is participating in the Asia-Pacific Economic Cooperation (APEC) forum.

The Paris Club agreement reduces Iraq's debt to the member countries from $38.9 billion to $7.8 billion in a three-phase process over the next four years.

Prior to this agreement, Iraq's sovereign debt stood at $120 billion. President Bush encouraged non-Paris Club nations to follow suit and agree to comparable debt forgiveness for Iraq.