The visit by Kuwait prime minister to Iraq was the biggest step to improve relations between the two countries since Saddam Hussain's Iraq invaded Kuwait 21 years ago. And good relations between the two Arab neighbours are very important for the good of the two countries themselves and the region at large.

The two countries have important and almost intractable issues to sort out, but even if they take some time to move forward, the very fact that dialogue is underway at the highest levels is a cause for optimism. The Kuwaiti Prime Minister, Shaikh Nasser Mohammad Al Sabah, met with his Iraqi counterpart, Nouri Al Maliki, during a visit to Baghdad this week, and the two prime ministers agreed to form a committee to work on the issues from their troubled mutual past. It is also an important gesture of continuing normalisation that the Kuwaiti emir has said that he would attend the Arab summit due to be held in Baghdad in March.

Substantial progress has been made on sorting out the vexed and highly sensitive issue of the disputed border after a series of meetings last year, but what is still very much an issue is the huge debt of Dh79.7 billion ($21.7 billion ) that Iraq owes Kuwait in war reparations, according to the United Nations Compensation Commission.

A possible route forward has been suggested by Kuwait's prime minister when he said last year that Kuwait might forgive further billions in loans made to Iraq under Saddam Hussain's regime when it was at war with Iran, in return for better relations. Iraq will be anxious to pay off its reparation requirements, since payment is an essential condition for Iraq to escape from the remaining sanctions imposed under Chapter Seven of the UN charter.