Abu Dhabi: Kuwaiti lawmaker Dr. Abdul Karim Al Kandari has put up a questin to the Minister of Foreign Affairs and the Minister of Finance, about reports that Iraq requested to postpone its financial obligations and debts to Kuwait, Kuwaiti media reported.
Al Kandari asked about the government’s position on this request, if it is true.
Reports said Iraq turned to neighbors to ease economic strains, seeking debt relief from Kuwait and moving to bolster commercial links with Saudi Arabia.
Under pressure from low oil prices, Iraq is seeking billions of dollars in debt relief from Kuwait and moving to bolster ties with Saudi Arabia, as the coronavirus pandemic compels Baghdad to court allies that could help it stave off an economic crisis, reported the Wall Street Journal.
Finance Minister Ali Allawi, who is also deputy prime minister and acting oil minister, reportedly told the paper he was proposing that Kuwait delay or cancel some $3 billion that Iraq owes in reparations for the 1990-91 Gulf War, when Saddam Hussein burned Kuwaiti oil fields.
Iraq had stopped making payments in 2014 during the war against ISIS, who controlled a third of the country but resumed in 2018, and now, 3% of oil export revenues go to Kuwait, which is also suffering from low oil prices.
Allawi reportedly said, “This will help the flow of liquidity significantly, in addition to other measures that would help stabilise the situation.”
Allawi met the Saudi finance, energy and foreign ministers in Riyadh, and appealed to them “for urgent financial support for Iraq so that the government can fulfill its pledges to its employees,” and he also met with a number of officials in Kuwait and the UAE.