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Japan May Forgive Loans to Iraq

China to Consider Granting Debt Relief to Baghdad; Paris Club Accord Is Sought

TOKYO -- Japan agreed to forgive the "vast majority" of its loans to Iraq as part of a U.S.-led initiative, as long as other nations also help ease Baghdad's crushing debt burden.

Iraq owes Tokyo $4.1 billion in unpaid loans, making Japan the largest creditor in the 19-member Paris Club of creditor nations. When interest payments are included, the total owed to Tokyo rises to $7 billion, making Japan the second biggest creditor after Russia, which is owed $8 billion. Last week, Russia offered to write off more than...