Kuwait says that its fellow oil exporter, Iraq, is likely to report a budget surplus this year and should therefore repay its debts from almost three decades ago. "Iraq's debt to Kuwait is an old debt... It has to be paid, or Iraq has to pay its interest. These are the rights of the Kuwaiti people," the state news agency, Kuna, quoted Sheikh Mohammed Al Sabah, the foreign minister, as saying in a television interview yesterday.
The debt, estimated at between US$15 billion (Dh55bn) to $16bn, represents loans that Kuwait made to Baghdad in the Saddam Hussein era, mostly during the 1980-1988 Iraq-Iran war. "The economic situation in Iraq is witnessing a big improvement this year and Iraq will have a large surplus in the budget," Sheikh Mohammed said, apparently referring to the six-fold rise in oil prices since 2002, which has generated huge revenues for oil exporters.
He said Kuwait would not allow debt repayment to become a burden on Iraq, but reiterated that only the Kuwaiti parliament could write off such debt. Several deputies oppose debt forgiveness, as many Kuwaitis are still bitter about Saddam Hussein's 1990 invasion of their country. The US has, since invading Iraq in 2003 and toppling Saddam, been pressing its Arab allies to forgive Iraq's debts and restore top-level diplomatic ties.
Last month, Sheikh Khalifa bin Zayed, President of the UAE and Ruler of Abu Dhabi, announced the slashing of almost $7bn worth of Iraqi debt left over from Saddam's era. On Thursday, the Government won fresh plaudits from the US, the UN and key players in the international community for aiding Iraq's recovery with diplomatic and financial support. During a Security Council meeting at UN headquarters in New York, the UAE was repeatedly praised for appointing an ambassador to Baghdad and writing off billions of dollars of Iraqi debt.
A report from the UN secretary-general, Ban Ki-moon, said "the decision of the UAE to forgive Iraqi debt is a strong step that I hope is taken by others in the region". The world's top diplomat added that he hoped more countries would follow the example of the UAE, which together with Kuwait, Jordan and Bahrain were "building forward-looking relationships" by resuming full diplomatic relations with Iraq.
His comments come just days after US President George W Bush also praised the UAE's diplomatic efforts in the region. Mr Bush met Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, at Camp David earlier this week. The UAE was also the first GCC nation to name an ambassador to Baghdad since the US-led invasion in 2003. Mr Ban's sentiments, meanwhile, were echoed by Alejandro Wolff, a US ambassador speaking on behalf of the Multi-National Force in Iraq, who called on other Middle East nations to "follow their example" and establish diplomatic ties.
Russia's envoy to the UN, Vitaly Churkin, applauded nations that had offered financial support, while Iraq's ambassador, Hamid al Bayati, highlighted his "appreciation" of the UAE "to forgive Iraq's debt". * With Reuters