Iraq proposes suspending war reparations to Kuwait

Iraq was expected to pay 1.5 per cent of its oil revenues in 2019

Iraq's prime minister designate Adel Abdel Mahdi arrives with parliament speaker Mohamhed Halbusi at the parliament headquarters in the capital Baghdad. AFP

Iraqi parliament Speaker Mohammed Halbousi has proposed postponing reparations to Kuwait over his country's destruction of its neighbour's oilfields and infrastructure during the Gulf War in 1991.

Mr Halbousi said he will form a parliamentary committee to visit Kuwait’s parliament and ask for a delay in payments in light of Iraq’s recent budget revision for 2019.

"Halbousi proposed forming a parliamentary committee to visit the Kuwaiti National Assembly and discuss the possibility of postponing or maintaining the same percentage,” a statement carried by Mr Halbousi’s office said.

Failing that, he will ask the Kuwaiti parliament to suspend demands that Iraq pays a higher percentage of the overall amount owed.

Last year, Iraqi and Kuwait agreed that payments would increase from 0.5 per cent of Iraqi oil proceeds in 2018 to 1.5 per cent in 2019, and 3 per cent in 2020 and 2021.

April 2018 saw Iraq pay $90 million dollars to Kuwait, the first sum transferred since payments were suspended in October 2015, over security and financial problems faced by Iraq in its fight against ISIS.

Kuwait Petroleum Corporation claimed $14.7 billion (Dh54 billion) in damages as result of the Iraqi invasion of Kuwait and their scorched earth retreat, which turned Kuwait’s skies black as Iraqi soldiers set more than 600 oil wells alight. The operation to extinguish the fires took nine months, longer than Iraq’s occupation of its southern neighbour.

The United Nations Compensation Committee, set up in 1991 in the wake of the Gulf War, assessed the damage and ordered Iraq to pay $52.4 billion to Kuwait.

Iraq’s budget includes projected revenues estimated at 105 trillion Iraqi dinars (DH 323 billion) for 2019, similar to its budget last year.

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Meanwhile, Iraqi Prime Minister Adel Abdul Mahdi said his country would not take part in the sanctions against Iran, as they have been granted a temporary exemption to ensure the continued flow of Iranian gas.

“We were able to explain to the Americans and the others involved, including Iran, that we are defending Iraq, and we don’t want to confront any country, we just want to defend our national interests,” the Prime Minister said.

Iraqi-Kuwaiti relations have improved in recent years, with Kuwait offering aid during the summer protests over the electricity crisis and Iraq moving to align its policies closer to its Gulf neighbours.