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Thu 22 Mar 2012 11:24 AM

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Iraq to pay US$408m owed to Egyptian workers

Move is the latest in Iraq’s efforts to clear its Gulf War-era debts

Iraq to pay US$408m owed to Egyptian workers
Iraq has been making reparations for its actions during the first Gulf War.

Iraq has agreed to pay US$408m
owed to Egyptian workers employed in the country in 1989 and 1990 as part of a broader effort to repay its Gulf War-era debts.

The cash will be repaid over a
two month period starting March 25, according to the Egyptian central bank, with around 637,000 recipients.

The cash will be wired through
four different banks to Egyptians who worked in Iraq from May
1989 to June 1990 and who were left unpaid after the outbreak of the first Gulf
War in August 1990.

The move comes after it was
announced last week Iraq has reached a US$500m agreement with Kuwait to resolve a
standoff over Gulf War-era debts that had prevented Iraqi Airways from flying
to destinations in the West.

Under the deal, Iraq will pay
Kuwait US$300m in cash and will invest another $200m in a joint Iraqi-Kuwaiti
airline venture, Iraqi president Nouri al-Maliki's media adviser Ali al-Moussawi told Reuters by
telephone from Kuwait where al-Maliki was on a visit.

In return, Kuwait would lift
legal actions against Iraqi Airways, he said. In 2010 Kuwait's lawyers tried to
seize an Iraqi Airways plane on its first flight to London more than 20 years.

The issue of Iraqi Airways debts
is one part of a long-running dispute between Iraq and Kuwait over billions of
dollars of reparations dating back to Iraqi leader Saddam Hussein's invasion of
Kuwait in 1990-91.

Saddam's forces seized aircraft
and parts during their occupation of Kuwait, before they were driven out in the
US-led Gulf War.

Iraqi Airways has regular flights
to Beirut, Dubai, Tehran and Amman, but legal cases have made it difficult to
start flights to European cities without risking its planes being confiscated.

Iraq is keen to resolve some of
its disputes with Kuwait ahead of a March 27-29 Arab League summit in Baghdad,
the first to be held there since before the 1990 invasion.

* With agencies