Gulf states pledge billions to rebuild Iraq after ISIS defeated

Wednesday , February 14, 2018 - 11:00 AM

Fiona MacDonald and Glen Carey

(c) 2018, Bloomberg.

Gulf nations pledged billions of dollars in financial support to help Iraq rebuild after its war to defeat Islamic State, in what may be an effort to weaken Iranian influence there.

The United Arab Emirates pledged investments of $5.5 billion in the private sector and $500 million for reconstruction, the country’s Minister of State for Foreign Affairs Anwar Gargash said. Saudi Arabia pledged $1.5 billion in assistance, Qatar $1 billion and Kuwait $2 billion, officials said.

“We are seeing a stronger Iraqi central government,” Saudi Foreign Minister Adel Al Jubeir said Wednesday at the conference in the opulent Bayan Palace south of Kuwait City. “We are seeing an Iraqi government that is asserting its authority over all parts of Iraq, and we encourage that.”

The economic challenges facing Iraq’s government are massive. It’s unlikely to receive the $88 billion in aid it requested, a Gulf official said at the conference. Iraq has so far received $10.5 billion in sovereign loans, $11.6 billion in non-sovereign credit, financing and project guarantees and about $1.7 billion from other sources, according to the official.

Gulf states wary of Iran’s growing power in the region, and specifically in Iraq, may see the financial support as a way to diminish that sway. During the three-and-half-year war, Iraq’s Shiite-dominated government was buoyed by assistance from neighboring Iran, which sent powerful militias to join the fight against the Sunni jihadists.

“It is clear they want to gain greater influence and counter Iran as it faces increasing uncertainty and pushback in Iraq and the region,” Paul Sullivan, a Middle East specialist at Georgetown University in Washington, said in response to emailed questions. “It could prove to be a smart move depending on what they end up directing the money towards, and what the people and power in Iraq see this as.”

The mainly Sunni Arab nations watched with anxiety as Iranian influence increased as power shifted from minority Sunnis to majority Shiites with ouster of Iraqi dictator Saddam Hussein in 2003 in a U.S.-led invasion. Saudi Arabia intervened military in Yemen in 2015 to prevent the Iranian-backed Shiite Houthis from taking over the country.

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With assistance from Zainab Fattah

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