Kuwait is considering investments in Iraq as a way of resolving a dispute over billions of dollars of war reparations owed by Baghdad for its 1990 invasion, according to the Kuwaiti Foreign Minister.

 

The statement of the Foreign Minister is a reply to a proposal put forward in July by U.N. chief Ban Ki-moon to consider investments as an alternative way to resolve the dispute. The minister said that Kuwait wants to deepen ties with Iraq through linking interests, and economic and strategic involvement in infratructure, tourism, trade and investments.

 

The proposal calls for Kuwait to invest the billions of dollars of unpaid compensation inside Iraq in joint ventures.

 

Iraq has already paid US $27.62 billion in reparations to individuals, organizations, companies and governments, around half of which was paid to Kuwait. The emirate is still awaiting payment of a further $25 billion.

 

He said Kuwait is willing to help Iraq to leave Chapter Seven as soon as possible, but reiterated the emirate's position that this requires full Iraqi compliance with the relevant U.N. resolutions.

 

Kuwait is also demanding return of property stolen during the invasion, repatriation of remains of prisoners of war and demarcation of maritime borders.

 

24 September 2009

 

 

Analysis and forecast: decreasing risk

 

The acceptance of Kuwait to consider investment in Iraq as option to end the reparations issue, is an important step to ending the effects of the Gulf war. Internal Iraqi politics are making it less likely that Kuwait be paid back the full payment. In other words, it seems that the investment option is the only real viable means for Kuwait to receive compensation.

 

Kuwait stands to benefit from such an arrangement as it would strengthen the country’s relations with its powerful neighbour. Although the details of the investments will probably take considerable time to agree on, and will involve significant risk, they will give Kuwait an edge in developing Iraq. The overall effect is that Kuwait’s regional position will strengthen, as the gateway between Iraq and the rest of the GCC.