STOCKHOLM, 30 May 2008 — Saudi Arabia is willing to consider alleviating debts owed it by neighboring Iraq, Minister of State for Foreign Affairs Nizar Madani said at a meeting in Sweden yesterday.
Iraq and the United Nations are co-chairing a review of a strategy adopted for Iraq in Egypt a year ago.
Ahead of that conference in May 2007, Saudi Arabia said it was willing to waive 80 percent of the funds owed it by Iraq.
So far nothing has come of that pledge, but Madani told the assembled diplomats in Stockholm that the Saudi government might be prepared to rescind the entire debt.
“We are conscious that debt represents a burden on the economies of countries and in view of the circumstances facing Iraq we are ready to consider alleviating the Iraqi debts,” Madani said in remarks translated by an interpreter.
“In this regard we have submitted all the available information to the Iraqi counterpart and we would expect the responsible Iraqi authorities to find an appropriate solution to this matter.”
Iraq pressed its creditors to cancel about $60 billion in debts at the conference. The Iraqi delegation, led by Prime Minister Nuri Al-Maliki, basked in praise from international leaders lauding the country’s economic and political development five years after the United States invaded to topple Saddam Hussein.
The Stockholm conference is the first annual review of the International Compact with Iraq agreed in the Egyptian resort of Sharm El-Sheikh last year, which committed Iraq to implement reforms in exchange for greater international support.
Maliki said the large debts — some of which date back almost 30 years — along with compensation payments for Saddam’s invasion of Kuwait in 1990, were shackling the economy. Iraq is obliged to set aside five percent of its oil revenues as compensation payments, amounting to $3.5 billion this year, according to the Iraqi government.
“Iraq is not a poor country. It possesses tremendous human and material resources, but the debts of Iraq ... which we inherited from the dictator, hamper the reconstruction process,” Maliki told the conference.
“We are looking forward to the brother countries writing off its (Iraq’s) debts, which are a burden on the Iraqi government,” he said, a pointed reference to Gulf states such as Kuwait and Saudi Arabia, which are Iraq’s biggest Arab creditors.
A member of the Iraqi delegation told Reuters they were disappointed by the absence foreign ministers from Saudi Arabia and Kuwait. A recent report to the US Congress said the Gulf states were resisting writing off Iraq’s debts.