Kuwait's Investment in Iraq

Kuwait is open to investing into Iraq some US$25 billion still owed it in reparations from the 1990-1991 Persian Gulf crisis, Iraq’s parliament speaker said while visiting Kuwait Wednesday. A United Nations commission has been deducting a percentage of Iraqi oil revenues to pay compensation to Kuwaitis and other nationals harmed by Saddam Hussein’s invasion of this close US ally in 1990. Iraq, struggling to rebuild after decades of sanctions, war, and foreign occupation has asked Kuwait to forgo the reparations or reduce them, but Kuwait has insisted they should be paid. “We tried to propose an alternative solution,” Iraqi parliament speaker Ayad al-Samarraie said at the end of a visit to Kuwait. “There would be an agreement between the two countries that the money paid to Kuwait as compensation would be reinvested in Iraq in one way or another.”

The speaker said there were “enormous opportunities” in his country where foreign investments have virtually stopped since 1980, at the start of an 8-year war with Iran. He said Kuwaiti officials he met during his four-day visit “didn’t object to the idea,” which still needs to be discussed further. Al-Samarraie’s counterpart, Jassem al-Khorafi, was quick to point out to reporters that such talks would first be taken up by the executive branches of government in both countries. Baghdad also wants Kuwait to forgive around $15 billion owed by Iraq from Saddam’s time. Kuwait says it is a matter for its parliament to decide. Many lawmakers have expressed strong objections saying Iraq is richer than Kuwait in natural resources and can afford to pay.


The latest figures from the World Bank estimate Kuwait has a per capita income of more than US$38,000 a year — one of the highest in the world — while Iraq’s was believed to be less than US$4,000. Ties between the two Arab neighbors were severed until the fall of Saddam in 2003. Kuwait was the launch pad for the US invasion that toppled the dictator. Asked to comment on the reaction of Kuwaiti officials to this proposal, Al-Samarrai stressed “some Kuwaiti government officials had earlier adopted the idea, but the issue is more serious now, especially since Kuwaiti officials have not expressed any objection to the proposal.” He admitted this issue “requires more detailed discussions as it is related to many executive aspects, considering it concerns a certain amount which will be transformed into investments. We cannot settle this issue in one sitting because we have to deliberate on details.”