Iraq pressed its creditors to cancel about $60 billion in debts at an international conference on Thursday, but two of its biggest lenders, Kuwait and Saudi Arabia, sent only junior representatives to hear the call.
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 was 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 5 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.
The foreign ministers of Saudi Arabia and Kuwait were not present at Thursday's conference. Instead, Riyadh sent a junior minister of state for foreign affairs and Kuwait dispatched an under-secretary responsible for international organisations. A member of the Iraqi delegation told Reuters they were disappointed by the foreign ministers' absence. Analysts say Sunni Arab countries have kept Iraq at arm's length, concerned at its close ties with neighbouring Shia majority Iran.
The US Congressional Research Service (CRS) said this month that the Gulf states, which supported Iraq during the 1980-88 Iran-Iraq war, were resisting writing off Iraq's debts. About $66.5 billion of Iraq's $120.2 billion foreign debt has been forgiven, according to US State Department estimates. More than half the remaining debt is owed to Gulf Arab states.
Saudi State Secretary for Foreign Affairs Nizar Madani told the conference his government was willing to consider "alleviating" Iraq's debt to Riyadh, which the CRS has put at $25 billion. Saudi pledges ahead of last year's Sharm el-Sheikh meeting to waive much of Iraq's debts came to nothing.
Maliki made a similar debt relief call at a conference of Iraq's neighbours in Kuwait in April. Kuwait said at the time it was willing to review the question of reducing Iraq's compensation payments but that a final decision rested with the UN Security Council, which set up the compensation scheme. US Secretary of State Condoleezza Rice urged the international community to engage with Iraq and called for its neighbours to reopen embassies. No ambassador from an Arab nation has been stationed permanently in Baghdad since 2005.
Opening the conference, United Nations Secretary-General Ban Ki-moon praised Iraq for "notable progress" in meeting economic, political and security targets set at last year's conference. "If we had to use one word to describe the situation in Iraq today I would choose ... hope," he said.
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