Arab Times
January 23, 2004

Kuwaiti Prime Minister Sheikh Sabah al-Ahmad al-Sabah said after meeting US envoy James Baker Wednesday his country was prepared to significantly reduce Iraq’s estimated 16-billion-dollar debt to the emirate. “The state of Kuwait will strive with other countries to achieve a significant reduction of Iraq’s debts in the course of this year, provided this is approved by the country’s constitutional institutions (parliament),” he told KUNA news agency.

Kuwait is “prepared to start negotiations to that end,” Sheikh Sabah said. “The outcome of these negotiations should be acceptable to an internationally recognized new Iraqi government,” he added, apparently suggesting that the move would not be finalized until Iraq has at least a provisional government.

A US administration official traveling with Baker, who flew from here to Riyadh, said “the (former) secretary had very successful and productive talks in Kuwait.

“We are very pleased that Kuwait has announced a substantial reduction in its debt on Iraq. This is a very significant step that shows Kuwait’s commitment,” the official, who requested anonymity, told AFP. “They (Kuwait and Iraq) are to initiate negotiations on the matter” shortly, the official added.

Sheikh Sabah made clear, however, that the “issue of Iraqi debt does not include war reparations” the emirate claims from its former occupier.

The chairman of the Kuwaiti Authority for Compensation Claims, Khaled al-Mudhaf, was among officials who attended the meeting with Baker. Kuwaiti lawmakers strongly oppose any write-off of the compensation claims and have repeatedly warned the government against taking a unilateral decision to do so.

A number of MPs have even proposed that the government be specifically prohibited from waiving any compensation claims. This measure has not yet been debated in parliament.

Kuwaiti Foreign Minister Sheikh Mohammad al-Sabah, who attended the meetings with Baker, later told reporters the US envoy “showed understanding of Kuwait’s position on war reparations.”

Sheikh Mohammad said the emirate refused to discuss reparations because the “issue is governed by UN resolutions.”

Kuwait has filed compensation claims worth 170 billion dollars to the UN Compensation Commission, which has already approved some 37 billion dollars in payments and actually paid about nine billion.

Iraq invaded Kuwait in August 1990 and occupied the emirate for seven months before being evicted by a US-led multinational coalition in the Gulf War.

The Kuwaiti premier also said a significant reduction of Iraqi debt will pave the way for rebuilding a free and prosperous Iraq.

Baker’s visit was part of a Gulf tour by the former US secretary of state that has also taken him to the United Arab Emirates (UAE) and Qatar, where he secured promises to waive most of the debt owed to the two oil-rich states. Saudi Arabia, owed an estimated 28 billion dollars by Iraq, is the last leg of his tour.

Unofficial estimates put Iraq’s debts to Kuwait at around 16 billion dollars, all granted during the 1980-88 Iraq-Iran war.

The UAE announced Tuesday it would write off the bulk of some four billion dollars owed by Iraq.

A Qatari foreign ministry spokesman said his country would also write off most of Iraq’s debt, but officials did not disclose the amount owed. Unlike other GCC nations, Kuwait has an outspoken elected parliament that must approve any decision to grant or waive loans to other nations.

A number of hawkish MPs have declared their opposition to any major financial concessions to Iraq.

Baker has also secured promises to ease Iraq’s debt, which totals some 120 billion dollars, from a number of European and Asian countries. While in Kuwait, Baker discussed the progress in winning Iraqi debt relief with Iraq’s finance minister and its central bank governor.