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Iraq approves loans from Saudi Arabia, China

Iraqi PM-designate Mustafa al-Kadhimi who is at the parliament for vote of confidence in Baghdad, Iraq makes a speech on 6 May 2020. [Iraqi Parliament / Handout - Anadolu Agency]
Iraqi Prime Minister Mustafa Al-Kadhimi in Baghdad, Iraq on 6 May 2020 [Iraqi Parliament/Anadolu Agency]

Iraq's Cabinet has approved loans granted by Saudi Arabia and China this week, further deepening its relations with the two states.

In the weekly Iraqi cabinet meeting on Tuesday, chaired by Prime Minister Mustafa Al-Kadhimi, it was agreed to approve the financial conditions for two loans granted by the Saudi Fund for Development.

According to a statement by the cabinet, other authorisations were enacted and approved such as the permission given to a representative of the Ministry of Finance to sign contracts necessary for the construction of a facility to store wheat in the city of Al-Diwaniyah and the Saqlawiya Hospital in the province of Anbar.

The cabinet also approved terms of the loan granted by Chinato the Iraqi national electricity company – amounting to a total of $78,539,000– and authorised Minister of Finance Ali Abdul-Amir Allawi to sign the agreement.

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The three loans approved by the Iraqi cabinet mark increasingly close relations and cooperation between the three states, with relations between Iraq and Saudi Arabia being of particular importance in recent months.

Prime Minister Al-Kadhimi scheduled a visit to Riyadh on 20 July before cancelling it due to Saudi King Salman's illness. The two states also worked on projects to link Saudi and GCC power grids with Iraq's in order to supply electricity, and joint investment agreements were signed almost two months ago to increase cooperation in numerous sectors such as energy, health, and education.

The increasing bilateral relations are primarily seen as a much-needed boost for Iraq's economy and development of its infrastructure,while for Saudi Arabia it offers an opportunity for its neighbour to be less reliant on Iran and its influence.

Such ties, however, have worried the Iran-backed militias within Iraq – who operate under the Popular Mobilisation Forces (PMF) funded,backed, and trained by the Iranian Revolutionary Guards Corp (IRGC) – and the Iraqi cabinets approval of the Saudi loans will likely increase those concerns.One of those militias, Kataib Hezbollah, last month condemned the growing relations between the Iraqi government and the kingdom.

READ: How long will Lebanon and Iraq toleratemilitias which undermine national sovereignty?

Asia & AmericasChinaIraqMiddle EastNewsSaudi Arabia
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