By John Lee.
Iraq’s Cabinet has agreed to allocate $500 million to resolve the long-running dispute with Kuwait over the debts of Iraqi Airways, according to Bloomberg.
The Cabinet asked parliament to approve the allocation of $300 million from the 2012 budget and another $200 million in 2013, , State Minister Ali al-Dabbagh said on Wednesday.
Prime Minister Nouri al-Maliki announced an agreement with Kuwait to end the dispute in March.
State-run Kuwait Airways Corp. has been seeking $1.2 billion in compensation for 10 aircraft taken during former Iraqi President Saddam Hussein’s invasion of Kuwait in 1990. Maliki agreed to pay $300 million in compensation to the carrier and another $200 million to establish a joint airline with Kuwait, which will contribute a similar amount.
Iraq still owes Kuwait about $20 billion as a result of that invasion. It is paying into a United Nations compensation fund even as its economy tries to recover from decades of conflict, sanctions and sabotage, nine years after the U.S.-led invasion that ousted Hussein.