Iraq Seeks to Halve Compensation for Kuwait

Iraq is seeking to slash the compensation it pays to Kuwait in Gulf War damages by half, an aide to Prime Minister Nuri al-Maliki told IWPR.



Iraq shells out five per cent of its oil revenue to a United Nations war reparations fund created after the 1990 invasion of Kuwait, a financial obligation that Iraqi officials claim is a heavy burden on the country as it attempts to rebuild. Kuwait is the fund’s primary beneficiary.



Some Iraqi officials have called for the country to be forgiven from the reparations entirely while Kuwait has insisted that Iraq continue paying the compensation, raising tensions between the two neighbours.



"Negotiations with Kuwait are ongoing,” said Maliki’s media adviser, Ali al-Musawi. “We hope that Kuwait would [allow Iraq to] eliminate its debts, but we do not think they will accept it. So we want to reduce the five per cent to 2.5 per cent."



He made the comments days after Iraq’s UN ambassador Hamid al-Bayati told reporters at the UN that Iraq is “trying to talk to the Kuwaitis to convince them either to forgive [the reparations] or reduce them”. He refused to speculate on the percentage, saying the amount would depend on negotiations.



He also confirmed that Iraq had sent a letter to UN secretary-general Ban Ki-moon and the Security Council requesting that the UN cut the reparations. Ban told the Security Council earlier this month that he is reviewing Iraq-related resolutions and will soon submit a report addressing Iraq’s compliance to the Security Council.



Bayati reported that Iraq has paid just over 27 billion US dollars in reparations and still owes 25.5 billion dollars, including 24 billion to Kuwait. He argued that Iraq needs the money “for services, reconstruction and development".



Bayati also reported that Kuwait had agreed to bilateral negotiations to discuss the compensation.



The comments indicated that there may be hope for a resolution of the Iraq-Kuwait dispute over reparations. In the last month, tensions between Iraq and Kuwait have escalated to their highest level since Saddam Hussein’s regime was ousted, threatening newly-established ties between the two countries.



Iraq is pressing the UN to remove Baghdad from special regulations under chapter seven of the UN charter, which require the government to pay reparations, designates the country a danger for security and stability and permits a Security Council member to use force in Iraq. The regulations were imposed by the UN following the 1990 Gulf War.



Iraq is banking on US support to pull the country out of chapter seven regulations based on the US-Iraqi Status of Forces Agreement, which includes a clause pledging US support for lifting the UN restrictions on Iraq.



In a press briefing at the State Department in Washington two weeks ago, the US ambassador to Iraq, Christopher Hill, reiterated that the US wants to help remove Iraq’s chapter seven restrictions. He also said the US “would like to see an Iraq-Kuwait relationship that continues to improve, and we will continue to be engaged in that”.



Kuwait dealt a blow to reconciliation efforts by insisting that Iraq has not fulfilled its obligations to Kuwait and must continue to pay reparations – a demand that would likely keep Iraq under chapter seven rules. In addition to the compensation, Kuwaiti officials demanded that land and sea borders between the two countries be clearly demarcated and that the remains of Kuwaiti prisoners of war be returned.



The reparations have been the primary sticking point between Kuwait and Iraq. Already burdened by debt accumulated during the Baathist regime, Baghdad’s oil-dependent economy has suffered due to violence, the global economic slump and lower oil prices.



“Iraq is not supposed to pay for the former regime’s mistakes,” Musawi said. “We were all the victims of this aggression.”



Musawi said it would take Iraq at least a decade to repay the reparations owed to Kuwait but that “Iraq has no intention of refusing [to pay] these compensations”.



The dispute led to heated comments among both Iraqi and Kuwaiti parliamentarians earlier this month, raising diplomatic concerns. Some Kuwaiti lawmakers called for the government to recall Kuwait’s newly-assigned ambassador to Baghdad, while a handful of Iraqi members of parliament insisted that Kuwait pay Iraq reparations for its support of the United States during the 2003 invasion of Iraq.



Ala al-Zubaidi, a political sciences professor at the University of Baghdad, dismissed the Iraqi call for reparations from Kuwait as “just for show”.



"Kuwait isn’t going to pay, nor will Iraq make an official request,” he said.



Kuwait has remained silent on the issue since the public outcry but Ali al-Muamun, the Kuwaiti ambassador to Baghdad, has met Maliki to discuss the compensation, according to Musawi.



Muamun declined to comment on the crisis between the two countries. The Kuwaiti embassy in Washington and the Kuwaiti mission to the UN did not return phone calls seeking comment.



The row has been a setback for Iraq and Kuwait’s recent efforts to repair relations. Many Iraqis eye their neighbour with suspicion, believing that Kuwait has not forgiven Iraq even after Saddam’s fall.



“Kuwait will never, ever forget the Iraqi invasion even though it’s part of the past,” said Amir al-Fayad, political sciences dean at Baghdad university.



Kuwait appointed its ambassador to Iraq last year, raising hopes that the two countries were turning a new page in their history. Iraq has not appointed an ambassador to Kuwait, a sore point for some Kuwaitis.



Still, Ban indicated that Iraq and Kuwait had made progress on Kuwait’s demand that Iraq return the remains of its soldiers. He said the UN’s team in Iraq, UNAMI, was working with the human rights ministry to exhume mass graves and “is expected to give priority to graves with the remains of missing Kuwaiti prisoners of war”.



Bayati reported that Iraq had returned the remains of 236 bodies to Kuwait.



Outgoing UN special envoy to Iraq Staffan de Mistura, who also spoke at the Security Council meeting, said the Iraqi government had invited a Kuwaiti delegation to discuss the issue of missing Kuwaitis and was “speeding up” the appointment of an Iraqi ambassador to Kuwait. He said the steps were “positive signs of increasing cooperation”.





Abeer Mohamed is an IWPR-trained journalist in Baghdad. Tiare Rath is a New York-based editor with IWPR Iraq.