Iraq asks UN to cut reparations to Kuwait, others
Thu Jun 18, 2009 2:39pm EDT
* Iraq still owes $25.5 billion in war reparations
* Security Council takes no decision on Iraq's request
By Louis Charbonneau
UNITED NATIONS, June 18 (Reuters) - Iraq has asked the U.N. Security Council to reduce its war reparation payments to Kuwait and others, saying it needs more money for services and reconstruction projects, Iraq's U.N. envoy said on Thursday.
Speaking as the Security Council discussed Iraq, Baghdad's U.N. Ambassador Hamid al-Bayati said his country sent an official request to Secretary-General Ban Ki-moon and the 15-nation council requesting a decrease in reparation payments.
"Our official demand is to reduce the percentage" of Iraq's oil revenues that it must pay to Kuwait and other claimants, he told reporters, without giving details. Iraq pays 5 percent of its oil revenues as reparations.
Bayati added that Iraq and Kuwait were ready to start bilateral negotiations on the topic of war reparations.
Relations between Iraq and Kuwait have become increasingly tense in recent weeks, with lawmakers in both countries trading accusations over the Security Council-imposed reparations that Baghdad must make to its smaller neighbor, which Iraq invaded in 1990 under former leader Saddam Hussein.
Bayati told the council Iraq has been meeting its obligations but needs to reduce the reparation payments.
"Up until April 2009, Iraq has paid $27.1 billion of the total compensation," he said. "However, there are $25.5 billion still due which is a heavy burden on Iraq, which needs the money for services, reconstruction and development."
Of the $25.5 billion Iraq still owes, $24 billion are due to Kuwait alone, Bayati told reporters.
Iraq today, he said, is very different from the one that invaded Kuwait and expressed the hope that this would be officially recognized by taking it out from under U.N. "chapter seven" rules that require it to pay the reparations.
"We hope that the secretary-general and the Security Council will assist Iraq in returning to the international status it held before the invasion of Kuwait," he said.
The council did not take any decision regarding Iraq's chapter seven status or its request to reduce reparation payments. It also made no mention of the issue in a unanimously agreed statement it issued that expressed support for the Iraqi government and the U.N. mission there.
FALLING OIL PRICE HURTS
Kuwait wants Iraq to stay under chapter seven rules until issues such as border demarcation and compensation for Kuwaiti property lost or damaged during the 1990 invasion are resolved.
But the issue has also become a sensitive one for Iraq's majority and now dominant Shi'ite Muslims, who feel they were just as much victims of Saddam, a Sunni, as Kuwait was.
Iraq relies on oil revenues for almost all its income, and flagging output and a fall in oil prices from last year has hit its budget hard, exacerbating misgivings in paying reparations to Kuwait for an invasion conducted by their former leader.
U.N. diplomats say that the council is not planning to remove Iraq's chapter seven status immediately, though a decision could be taken toward the end of the year.
Bayati said Baghdad was reaching out to creditors to resolve its foreign debt. He said that Iraq had reached agreements with Greece and Tunisia to settle over $440 million of debt, as well as $470 million owed to trade creditors.
"In this regard, my government has renewed its invitation to Arab countries to cancel the debt owed by Iraq and to settle the issue as several ... friendly countries have done," he said.
(Editing by Eric Beech)
