Iraq's finance minister hails ‘sea change’ in relations with Saudi Arabia

Ali Allawi says new border crossing will help to boost trade

Iraqi Finance Minister Ali Allawi during his visit to Riyadh. SPA

Iraq’s Finance Minister hailed a "sea change" in relations with Saudi Arabia as he welcomed growing trade links between the countries.

At an online event, Ali Allawi said Iraq wanted to remain on good terms with its neighbours as it tried to overcome a challenging 2020, in which its revenue was hit by a significant drop in oil prices.

Mr Allawi said his first trip last year as finance minister was to Saudi Arabia and that relations between the countries were "good to very good".

A new crossing between the two countries opened on Monday, allowing further expansion of cross-border business.

Mr Allawi was speaking at an event led by British Conservative Party MP Matthew Offord, chief of the UK’s newly reformed All-Party Parliamentary Group on Iraq.

“I think there's been a sea change in our relations with Saudi Arabia," he said. “One of the first trips I made was to Saudi Arabia.

"This is based on the willingness of the Crown Prince, as well as our Prime Minister to expand this relationship.

"Now, there's a joint Saudi-Iraq Economic Committee and we have done really quite a lot of work in this.

“We've opened up a new border crossing on Monday and every day there's a Saudi contingent coming here, businessmen looking at prospects.

"So we look forward to the flow of Saudi business.”

Mr Allawi said his country was enjoying a “cold peace” with Iran and was keen to avoid a future confrontation after tension between the previous US administration and Tehran.

“We hope that at some point, the tensions will be reduced and their effects on the domestic political and broader strategic situation inside the country become less inflamed by these tensions," he said.

“I think also the advent of President Joe Biden and obviously the intention appears to be quite clear, they want to defuse the tensions with Iran and perhaps restart the talks regarding Iran's nuclear weapons programmes.

"This will have a positive effect on the domestic climate.”

Mr Allawi also said Iraq's relations with China, Europe and the UK were excellent and that his government was looking to encourage visa-fee tourism to Iraq’s historic sites, which he likened to those in Egypt.

But he said Baghdad’s relations with the Kurdish government in the north of the country needed to go “back to basics”.

“At no point do we expect or hope for an armed confrontation," Mr Allawi said. "We are trying as much as possible to defuse areas of tension.

"Some of the issues cannot be resolved, they've been hanging around for a long time.

"There is now a recognition that the past ebb and flow of relations between Baghdad [and Erbil] over the past decade or so has not been positive overall. I think that we have to go back to basics.

"We have to create the framework where both sides have to accept that, if you'd like us to be a federal state, then there are certain requirements and obligations on both sides.”