February 10, 2010KUWAIT: Local political and economic experts have described Kuwaiti MPs' stance on the issue of Iraqi debts as being more "emotional" than rational.
The experts were speaking after a number of Kuwaiti MPs expressed their refusal to allow debts to be exchanged for investment privileges in Iraq, after an Iraqi parliamentary delegation held meetings with Kuwaiti MPs during their visit to the National Assembly. MPs Buramya, Mislem and Al-Khanfour said that Iraq's debt to Kuwait is a matter of Kuwaiti sovereignty and it is not the place of the government to decide to give it up.
Strategic expert Thafer Al-Ajmi said that Kuwait has a strong negotiating position on the issue of Iraqi debts, regardless of the fact that the US might be leaning more towards Iraq's view on this matter.
However, there are other facts to consider when it comes to taking a decision on this issue," said Al-Ajmi: "We need to ask ourselves whether it is wise for us to insist on receiving the debts and refuse investments?
Do we want to invest in the Iraqi people and open a new chapter with them? Do we want to raise two generations on both sides of the border who do not hate each other?
Al-Ajmi asserted that MPs' stances on the matter are more driven by public opinion than by consideration of Kuwait's long-term strategic interest. Nonetheless, the strategic expert said that it is in Kuwait's best interest to demand complete repayment of its debts in order to get a better final agreement regarding the investment.
Economic expert Hajjaj Bukhathour said that it would be better for Kuwait to negotiate investment deals with Iraq for a number of reasons.
"First of all it is not uncommon in the business world for a insolvent debtor, who is incapable of repaying his debt, at least in the short term, to exchange it for investments or property," he said, "and given the Iraqi capability to pay back the debts, I think the duration with which these debts can be paid back with could devalue the debts due to inflation.
Bukhathour added that there are numerous investment opportunities in Iraq right now. "There is the energy sector, whether it be oil or gas, there's great potential for water and agricultural investments and even in tourism in Iraq; all of these are options which Kuwait can actually benefit from investing in," he explained, "and the sooner the better, because some of these investment opportunities might not be available for long time, and we might eventually find ourselves obliged to settle for less attractive investment.
Kuwait does not have a liquidity problem, Bukhathour added, but it should be deploying the surplus assets in investment opportunities. He argued that the political cost of inflexibility on this issue could exceed the actual value of the debt. "I am saddened by the fact that everyone who is addressing this matter is not taking these things in consideration, be it from the NA or outside it," he concluded.
Kuwait times
