< Back to Iraqi Dinar in the News November 14th, 2008

Iraq hopes for deal with Kuwait on Gulf war reparations

Iraq hopes for deal with Kuwait on Gulf war reparations

BAGHDAD (AFP) — Iraq hopes to cut a deal to extend its timetable for paying war reparations to Kuwait for damage caused by Saddam Hussein's 1990 invasion of the country, the finance minister has said.

At present the United Nations takes five percent of the revenue from every barrel of oil Iraq exports and applies it to a fund to pay back countries that suffered during the invasion, principally Kuwait.

The small, oil-rich Gulf emirate has claimed damages from Iraq for the invasion and seven-month occupation by Saddam's forces, which were driven out in 1991 by a US-led coalition.

Iraqi Finance Minister Baqer Jabr Solagh told AFP in remarks on Wednesday that he has proposed reducing the cut to one percent, extending the timetable to pay the reparations.

"It is in total around 50 billion (dollars). We paid until now around 23 billion, because when we sell each barrel, the UN cuts five percent from our oil revenue," he said.

"We want to reduce the five precent to one percent. The Iraqi people hope the Kuwaitis will accept this offer," he said, adding that falling oil prices were making it hard for Iraq to fund its reconstruction after years of war.

Solagh took the offer to Kuwait during a visit in September but did not receive an official response.

Figures released at the time showed the UN compensation fund has received claims worth 354 billion dollars, but had approved just over 52 billion dollars, of which around 45 billion dollars are for Kuwait.

The fund has paid out more than 21 billion dollars, around 11 billion dollars of it to Kuwait.

Saddam was toppled during the 2003 US-led invasion of Iraq and executed in 2006 for crimes against humanity.