KUWAIT, 22 January 2004 — Kuwait told US Iraq debt envoy James Baker yesterday that it was willing to begin talks over reducing debts owed by Iraq and that the issue would need Parliament’s approval.

Prime Minister Sheikh Sabah Al-Ahmad Al-Sabah was quoted by KUNA as telling Baker that Kuwait will work with other countries to achieve a substantial reduction in Iraqi debts during this year “on condition that this is approved by constitutional institutions in the country.”

“Kuwait is willing to begin negotiations regarding this issue on condition that the results of these talks are accepted by an internationally-recognized Iraqi government,” Sheikh Sabah was also quoted by KUNA as saying. “Kuwait will work with creditor nations in this direction.”

A US official traveling with Baker told Reuters the envoy had “very successful and productive” talks with Sheikh Sabah. “We are very pleased that Kuwait has announced that it is committed to achieving substantial debt reduction for Iraq in 2004,” the official said. “Significantly, the Kuwaitis have also stated that they are ready to initiate negotiations promptly.”

Qatar and the United Arab Emirates said on Tuesday after talks with Baker they would waive most of the more than $7 billion Iraq owes them.

Sheikh Sabah said the reconstruction of Iraq is a critical issue for the whole world for the sake of security and stability in the region.

The US official said Kuwait’s commitment amounts to “the same commitment made by other major creditors” that Baker has met.

“Until today, Kuwait had made no commitment regarding debt reduction for Iraq, nor had it agreed to initiate negotiations,” the official said. “As recently as October, a Foreign Ministry spokesperson said Kuwait does not intend to forgo (any debts).”

In Kuwait, Baker met Iraqi Finance Minister Kamel Al-Keylani and Central Bank Governor Sinan Al-Shibibi who said they are pleased with the debt reduction commitments made to date by creditors in Europe, Asia and the Middle East.

Sheikh Sabah was quoted as saying that the issue of Iraqi debts was separate from that of billions of dollars in war reparations for damage Kuwait suffered during Iraq’s 1990 invasion.

In September, Kuwaiti parliamentarians reacted angrily to a US suggestion that Kuwait drop reparations demands. US civil administrator for Iraq Paul Bremer said then that out of Iraq’s total debt of $200 billion, Baghdad owned $98 billion in reparations to Kuwait and Saudi Arabia for losses during the 1990-91 occupation of Kuwait and the Gulf War.

A key MP told Reuters as Baker held his negotiations that any talk about dropping debts or compensation is premature since Iraq is ruled by an interim council not a fully elected government with constitutional accountability.

“Such a matter should be done through negotiations between governments, not between a government and an interim council that can be changed at any minute,” said Abdul Wahab Al-Haroun, who heads Parliament’s finance committee.

“How will Kuwait guarantee its legitimate rights ... and what will it get in return for waiving or rescheduling the Iraqi debts?”

Parliament’s Legal Committee late last year unanimously approved a draft law that bans the government from foregoing the compensation.