Improved relations spur Iraq-Kuwait trade deal; Agreement will benefit the economies of both countries
January 23rd, 2012 12:12 pm · Posted in NEWS (Iraq & World Currency)
In a continuing effort to improve relations, Iraq and Kuwait signed a first-of-its-kind memorandum of understanding on trade on Tuesday (January 3rd), which allows companies and businessmen to travel between both countries without visas.
Officials and trade experts in both countries welcomed the initiative that seeks to expand trade and stimulate economic co-operation.
The memorandum is renewable after three years.
Zuhair al-Dujaili, the head of the Kuwaiti-Iraqi Friendship Association, which was formed last January to discuss outstanding issues like debt and reparations, told Al-Shorfa that Kuwait has recently taken many steps toward normalising relationswith Iraq.
“The trade memorandum will be followed up next week with the inaugural Kuwait-Iraq Media Forum, which will be attended by 50 leading media professionals from both countries and aims to heal the wounds of the past history of both Kuwait and Iraq,” he said.
Signing the memorandum serves to “put Iraq back on the Arab map” said al-Dujaili, adding that it will also help open up trade between the neighbours and give Iraq a gateway to the Gulf States and the greater Arab market, “from which it has been absent for far too long”.
“Kuwait is Iraq’s ideal first trade partner because the costs of the goods that traders will distribute to both markets would be relatively small, and there are already four large Kuwaiti-owned commercial projects in Iraq in the fields of telecommunication, aviation, and heavy industries, whose resumption requires continuous traffic between the two countries,” al-Dujaili said.
The memorandum of understanding will also encourage businessmen on both sides to launch more projects, he added, which will in turn stimulate capital investment and revitalise economic activity.
Agreement comes into force soon
Walid Abawi, Undersecretary of Iraq’s Ministry of Foreign Affairs, said the agreement will enter into force within a few days.
“The Kuwaiti Ambassador informed us of the authorities’ approval of the entry of fifty Iraqi merchants to Kuwait as a first step, pending Kuwait’s finalisation of the agreement’s legal and administrative requirements,” Abawi said.
Kuwaiti economist Hajjaj Bukhdur said, “The signing of the memorandum of understanding is the main contributing factor for the removal of political tension between the two countries, as trade helps [people] look past the negatives and focus on the positives that bind the two countries together.”
Bukhdur said that Kuwait has tremendous economic and commercial capabilities to help Iraq build its infrastructure properly and stimulate capital investment in the education and health sectors.
“And Iraq has a large labour pool, which would help business people realise considerable savings by not having to bring in workers from abroad,” he added.
“Without a doubt, commerce will be revitalised in all sectors, be it the oil, agricultural, chemical or manufacturing sectors,” Bukhdur said. “However, the retail sector will be the most revitalised due to the proximity of the two countries, and this will open new markets for Iraq in the Gulf States, from which it can then catapult to other Arab countries.”
Haitham al-Jubouri, Deputy Chairman of the Iraq’s Foreign Relations Committee, said Iraq is seeking to resolve all differences with Kuwait, adding that “the agreement is the start of a special relationship that will translate [to action] on the ground in the coming period through the [Joint Iraqi-Kuwaiti] Committee that was formed early last year.”
“Iraqis consider Kuwait to be a friendly country,” al-Jubouri said. “Relations must be developed for the benefit of the people of both countries.”