Money war brews with Iraq

Senior officials on both sides are urging calm as a row over tens of billions of dollars in reparations and the border demarcation heats up.

KUWAITI REFUGEES WALK HOME

KUWAIT CITY // The increasingly heated row between Kuwait and Iraq over war reparations is reaching a new pitch ahead of a UN review of Iraqi sanctions later this month. The anger the issue is arousing surfaced in the Kuwaiti parliament yesterday after the chairman of the parliamentary committee for foreign affairs, Marzouq al Ghanim, asked to prepare a report about the overdue war reparations from Iraq. After heated debate, parliament was forced to adjourn, adding to a growing controversy that has threatened relations between the neighbouring Gulf countries.

In February, the UN secretary general, Ban Ki-moon, said in Iraq that the world body may scrap the reparations regime, almost two decades after they were imposed and six years after the US invaded Iraq, toppling Saddam Hussein. Some MPs yesterday said the request was unconstitutional. One parliamentarian, Ahmed al Sadoun, said it was within the jurisdiction of the UN Security Council. Another, Musallam al Barrak, said that having the case presented to the United Nations is what the Iraqis wanted.

The assembly voted against Mr al Ghanim's request. The Kuwaiti debate over the sanctions is opening old wounds left over from Iraq's invasion of the country in 1990. The government has resisted any attempt to move Iraq from under Chapter Seven of the UN charter, which pertains to sanctions, until Iraq resolves outstanding issues with Kuwait including billions of dollars of war reparations it was ordered to make. Iraq's remaining restrictions involve some arms deals and financial transactions.

The row escalated last week when several Iraqi MPs demanded that Iraq counter-sue Kuwait because it was the staging post for the 2003 US-led invasion, which was illegal under international law. "We request a parliamentary debate to seek financial compensation from Kuwait for having allowed American forces to use its territory for the attack on Iraq and to cause damage and destruction here," one Iraqi MP, Ezzedine al Dawla, said, according to Agence France-Presse.

Angry Kuwaiti MPs responded by calling for the withdrawal of their ambassador to Iraq, who took up his post in October. The Gulf Cooperation Council has thrown its support behind Kuwait in the dispute over war reparations and the border demarcation. "The council stresses the need for Iraq's completion of the implementation of the relevant UN Security Council resolutions under the umbrella of the UN," the GCC Ministerial Council said in a statement after its six member states and Yemen met in Riyadh on Monday.

Senior officials from both sides of the dispute have pleaded for calm. On Monday, the Iraqi president, Jalal Talabani, rejected "attempts to disrupt relations between Iraq and Kuwait", a government website reported. Mr Talabani said the two countries should "address any issues in a way that serves both their interests". Kuwait's deputy prime minister and foreign minister, Sheikh Mohammed Sabah al Salem al Sabah, also stressed his wish to pursue good relations with Iraq after a meeting of parliament's foreign committee on Sunday. He said that Kuwait aspires to see an Iraq that "believes in local and international resolutions and laws", the state news agency reported.

Five per cent of Iraq's oil sales go to the UN Compensation Commission, which oversees payment to individuals, companies, non-governmental organisations or governments that suffered from Iraq's 1990 invasion of Kuwait. Kuwaiti officials say Iraq still owes Kuwait US$25.5 billion (Dh93.7bn). In addition to the war reparations, Iraq owes Kuwait $16bn for loans made before the invasion. Iraqi officials have called for the burden on their oil sales to be reduced to one per cent or scrapped. They want to solve the outstanding issues with Kuwait bilaterally rather than under the auspices of the UN.

Mohammed Abulhassan, an adviser to the Kuwaiti emir, recently headed a mission to the five permanent members of the UN Security Council to stress Kuwait's opposition to ending the sanctions. Another contentious issue is the border between the two countries, which was drawn up by the UN in 1993. Iraq has yet to recognise the border and wants to tie its resolution to a deal that resolves the war reparations issue.

"The relationship between Iraq and Kuwait is not moving in the correct way," said Ahmad al Baghdadi, a political scientist at Kuwait University. "They said the borders were unfair and two years ago they were teaching in their schools that Kuwait is a part of Iraq. But we have to deal with the Iraqi government and everybody has the right to say what they want." Mr al Baghdadi said that former Baathists in Iraq are attempting to spark tensions between the two countries. "But Iraq can't attack Kuwait now," he said. "We're still safe.

"Any differences between Iraq and Kuwait should be settled under UN supervision," he said, speculating that the United States will not try to change the UN mandate. On Monday, Kuwait's foreign minister met the UN secretary general's special representative for Iraq, Staffan de Mistura. The US, British and French ambassadors to Kuwait and Kuwait's ambassador to Iraq were present, the state news agency reported.

The Iraqi government's debt from Saddam's rule burdens the war-torn economy. In the past, the US has pushed for relief from Saddam-era debts with some success - $38.9bn has been forgiven. Iraq won some more relief in the US Supreme Court on Monday when the court ruled that the Iraqi government has immunity from $1bn in US lawsuits from the time of Saddam's reign, Reuters reported. Foreign nations are usually immune from lawsuits in the United States unless they are named as state sponsors of terrorism, as Iraq was.