Iraq awaits an economic recovery after ending Kuwait’s compensation and seeking to exit from Chapter VII
Kuwait’s compensation – which was costing Iraq more than two billion dollars annually – will be added to Iraq’s budget and block one of the exchange doors.
Iraq folded one of the most draining files on its economy, after paying all its dues in the Kuwait compensation file, amid optimism about an economic recovery and openness to global investment.
Adviser to the Prime Minister for Economic Affairs, Mazhar Muhammad Salih, said that Iraq had ended the file of compensation for the Kuwait war, noting that “in this way, Iraq paid all its obligations imposed on it under Chapter VII of the Charter of the United Nations and relevant Security Council resolutions in 1991.”
He added that the compensation file cost Iraq from the gross domestic product and the efforts of its economy about 52.4 billion dollars, explaining that this amount is not small, this amount is sufficient to build an electricity network system that revives Iraq for many years.
Saleh considered that closing the Kuwait compensation file is a new page in Iraq’s economic history.
He explained that “this file used to cost Iraq 6-7 million dollars a day,” noting that the value of these funds from Iraq’s current exports – which amount to more than two billion dollars annually – will be added to Iraq’s budget and block one of the exchange doors.
development and investment
Saleh expressed his hope that this money would go to development and be invested in projects that employ the workforce and produce income.
And Al-Kazemi’s advisor indicated that Iraq was imposed on it by the Security Council about 40 resolutions due to the Kuwait war and was completely shackled until the present time.
He pointed out that Iraq has great prospects for its integration into the global economy, explaining that the isolation it is experiencing is great, and the planes of many countries of the world still do not reach Baghdad Airport, which indicates that Iraq is still partially besieged, which results in considering it a war zone that makes insurance and shipping costs high. This hinders economic progress.
Saleh stressed the need for a 10-year development plan to benefit from oil imports, as infrastructure development begins and ends with income-generating projects, expecting 2022 to be a year of progress and prosperity for Iraq and positive indicators for its return to normal economic life and integration into the international community.
Restoring confidence in Iraq
While the economic expert Bassem Antoine stressed that closing the Kuwait compensation file will restore confidence in Iraq and its investments, in addition to improving its image and reputation among several countries and companies to serve the people of the country, as well as the confidence of foreigners in Iraq, pointing out that exit from Chapter VII will be followed by some procedures, and fall on the Central Bank. efforts at that.
And Antoine indicated that Iraqi banks will restore their dealings, such as using correspondents from abroad, to achieve great and wide achievements with these banks, such as Al-Rafidain Bank, which is mainly a giant bank, in addition to the need for intermediary banks with Iraq.
He stated that the percentage that was deducted from Iraqi oil sales in favor of Kuwait, will continue to be deducted, but this time in favor of a sovereign fund, similar to the Gulf countries.
For his part, the academic at Basra University, Nabil Jaafar, urged the government to demand the removal of Iraq from Chapter VII to VI, and to liberate its financial accounts, especially oil revenues that go to the US Federal Bank (the Central Bank) to deduct the share of compensation from it.
He explained that the compensation is over, and therefore the oil revenues – which are in foreign currency – should go directly to Iraq, stressing the need for Iraq to ask the Security Council to protect its funds deposited abroad.
He pointed out that the government’s approach after this file is to establish a sovereign fund in which the 3% of oil sales that used to go to Kuwait, which sometimes amounted to two billion dollars annually, will be deposited, to be invested at home and abroad, and be a kind of buffer against the international crises that befall Iraq as one of the countries rentier.
And economic analyst Tariq Al-Ansari stressed that Iraq has achieved gains from ending the file of compensation and reducing the burden on the budget, which will reflect positively on the country by investing the amounts that were paid in compensation – which are estimated at two and a half billion annually – in infrastructure, absorb unemployment and reduce inflation and poverty.
He stressed the need to put the Iraqi economy on the right track from a scientific and methodological point of view, and to restructure the economy with its monetary, financial, investment and oil policies, as mentioned in the “White Paper”.