Russia agrees Afghan debt relief

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Russia has written off the bulk of Afghanistan's Soviet-era debt, heralding a new period of co-operation between the two countries.

At a ceremony in Moscow, Russia cancelled about $10bn (£4.9bn) in bilateral debt, equivalent to 90% of outstanding Afghan obligations.

The debt dates back to the Soviet Union's occupation of Afghanistan between 1979 and 1989.

A million Afghans are estimated to have died in the conflict.

We have drawn a line under years of discussion on regulating the debts Alexei Kudrin, Russian finance minister

More than 14,000 Soviet soldiers died at the hands of mujahideen fighters seeking to overthrow the Soviet-backed government.

'Historic day'

An agreement last year by the Paris Club of industrialised nations and international creditors to forgive the bulk of Afghanistan's debt paved the way for Monday's agreement.

Russian officials said the agreement would boost Afghanistan's fragile economy, at a time when a resurgent Taliban is threatening the country's security and development.

"This is a historic day for our two countries," said Alexei Kudrin, Russia's finance minister.

"Today we have drawn a line under many years of discussion on regulating the debts."

Stronger links

Afghan officials said they hoped to forge stronger commercial links with Russia.

"We would like further economic co-operation with Russia," said Anwar-ul Haq Ahadi, Afghanistan's finance minister.

"We think Russian companies have competitive advantage and think they can compete in Afghanistan's market."

The remaining debt is set to be cancelled within the next three years.