Samson: Iraqi optimism about economic gains after exiting from Chapter VII
25th February, 2022 Muayyad Al-Terfi (an Iraqi reporter)
Iraq succeeded in turning the last page of the UN Security Council resolutions related to the invasion of Kuwait in August 1990, which consisted in closing the compensation file and removing it from Chapter VII of the United Nations Charter after paying more than 52 billion dollars
Removing Iraq from the list of Item VII represents an important step for the return of the Iraqi file to Iraqi sovereignty again after it was subject to the United Nations and the international community in managing its financial revenues, in addition to starting soon to cancel the procedures for freezing Iraqi funds, whether they were seized after the invasion of Kuwait or after the fall of the regime. Saddam Hussein
The Central Bank had announced in December of 2021 that the last remaining installment of the State of Kuwait’s compensation, amounting to 44 million dollars, had been paid, so that Iraq would complete the payment of the full amount of compensation approved by the United Nations Compensation Committee of the UN Security Council, pursuant to Resolution 687 of 1991
Resolution No. 705 obliges Baghdad to pay $52.4 billion to individuals, companies, governmental organizations and others, who have suffered direct losses as a result of the invasion and occupation of Kuwait, and by paying this amount, Iraq fulfilled its most important international obligations that qualify it to exit from Chapter VII of the Charter of the United Nations, which stipulates taking Coercive measures” in the event that peace is threatened, ranging from economic sanctions to resorting to force, and Chapter VII allows exerting pressure on a country to compel it to abide by the goals set by the Security Council, before coercive measures are applied
Exit after 31 years
Iraqi Foreign Minister Fouad Hussein announced his country’s exit from Chapter VII procedures, after paying all of its financial obligations, and confirmed that Iraq is no longer required to pay any additional financial sums in the future.
United Compensation said, “Iraq today turns an important page of its history that lasted more than 30 years,” noting that “Iraq seeks to strengthen cooperation frameworks with the international community,” and Hussein added that “Iraq has paid the last payment in accordance with its financial obligations and paid the full amount of compensation.” obligatory,” stressing that “it is no longer required to pay any additional sums of money in the future,” and explained that “the government considers the full fulfillment of its international obligations towards the international community and the sisterly State of Kuwait as a major development,” noting that “Iraq sought to complete this unique model to remove Iraq from Chapter VII procedures
Fulfilled his obligations
Adviser to the Prime Minister for Economic Affairs, Mazhar Muhammad Salih, said, “Iraq has ended the file of compensation for the Kuwait war,” noting that “with this, 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,” Salih 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, and it cost the Iraqi daily from six to seven million dollars,” and Saleh pointed out that “the value of these funds from Iraq’s exports. The current amount of more than two billion dollars annually will be added to the budget of the Republic of Iraq and will block one of the exchange doors
For his part, the researcher in political affairs, Aziz Jabr, said that Iraq’s fulfillment of its obligations towards the United Nations resolutions to compensate Kuwait helped to remove Iraq from Chapter VII, which would bring political and economic benefits to Iraq and would cancel the international trusteeship of its money, and Jabr added that as a result of a commitment Iraq pays compensation, it was removed from Chapter VII, as the state that is within this charter is weak towards the international community and has no value, pointing out that the sovereignty of states under Chapter VII is broken and at any time someone can claim that he has been subjected to some kind of pressure and aggression
Jabr indicated that Iraq’s fulfillment of its obligations to Kuwait’s compensation and its exit from the penalty of the seventh country will mean a better future for relations with the countries of the world, in which there is a kind of equality and mutual respect, pointing out that this matter opens wide doors for investment and the development of Iraq’s international status, and the Iraqi passport will enjoy an advanced sequence, and he added that the decision the UN was issued with the cooperation of three powers: Iraq, Kuwait, and the United Nations, and it is an exemplary cooperation, and therefore the money that was placed in the Kuwait Compensation Fund can be invested inside Iraq, and this will be the responsibility of the government, stressing that the UN resolution has cut off all claims for new compensation
The head of the “Future” Foundation for Economic Studies, Manar Al-Obaidi, pointed out that Iraq will reap the fruits of ending its international obligations in liberalizing the restrictions of Iraqi banks. From the cause of the seventh item,” pointing out that Iraq has debts estimated at $28 billion, part of which was in the eighties of the last century and other new debts, including in 2014, as well as bonds due for payment in 2023, and Al-Obaidi explained that Iraq’s exit from the seventh item will have clear results in the recovery of the banking sector after the lifting of sanctions on this sector, which will lead to the stability of the monetary situation, especially in light of the high reserves and banking transactions with foreign banks, pointing out that dealing with these banks will be easier, which will contribute to the development of the banking sector, and thus the development of the economic sector
The assets of the Central Bank of Iraq until the end of 2021, according to a report by the bank, amounted to more than 150 trillion Iraqi dinars, up to (100 billion dollars), including the cash reserve, which amounted to about 64 billion dollars, an increase of 19 percent compared to the end of 2020. The highest central bank since 2005, rising from 30 trillion Iraqi dinars in 2005 to 150 trillion Iraqi dinars at the end of 2021
Al-Obaidi added that the cash for selling oil will be transferred through Iraqi banks instead of the US Federal Bank, and since the launch of the Oil-for-Food Program in 1997, Iraqi oil revenues have been subject to international monitoring before this monitoring was lifted after the fall of the previous regime and placed in an account with the US Federal Bank. He is protected by the US administration from continuous compensation claims from various parties that talk about its damages due to the invasion of Kuwait LINK
MilitiaMan: Samson your find is awesome and much appreciated. Petra’s keen eye pointed out to me that the key point in this article is the underlined above.
How are they going to transfer through Iraqi Banks instead of the USD? Is it possible they are able to do so at program rate?
Approximately 90% of all oil trades are in the USD.. Iraq’s money supply would have to be increased and we all know that they have been reducing the note counts in the M figures over the last 2 years.
The IMF wants the Multi currency Practices (MCPs) to cease… And we see they are from the reduced auctions of late.
So, from the looks of it they apparently are now looking to be forced to make an exchange rate change or blow up everything they have worked on for the last two years.
It is also looking like they will have to de peg from the USD and likely to be with an immediate urgency, ioo..
Chapter VII being lifted has it’s consequences that will require immediate decisions specific to the international treatment with respect to the use of the Iraqi Dinar.. ioo ~ MM