Saudi Arabia will invest $3 billion in a new joint fund with Iraq to support private sector growth.
According to the Kingdom, the joint fund will be for the “benefit of the Saudi and Iraqi economies, with the participation of the private sector from both sides.”
Saudi Crown Prince Mohammed bin Salman met with Iraqi Prime Minister Mr. Mustafa Al Kadhimi during an official visit to strengthen relations and co-operation as Baghdad seeks to build closer ties to the Gulf.
Saudi Arabia’s investment in Iraq is forecasted to increase to $2.67 billion from just over $0.5 million now.
Mr. Al Kadhimi stated that “over the past few months relations with Saudi Arabia have accelerated in a positive direction. We succeeded in overcoming a lot of the challenges that were obstructing the progress of the relationship.”
The two have agreed to step up cooperation in the development of renewable energy and to work together to keep global oil markets stable. Iraq is the OPEC oil cartel’s second-largest producer, behind only Saudi Arabia.
The two countries have signed three new bilateral agreements, including a tax treaty to avoid double taxation, a growth planning agreement for economic diversification and private sector development, and a financing agreement for Saudi exports.
Mr. Al Kadhimi’s visit follows the reopening of the Arar land border crossing between the two countries in November, the first time since Riyadh severed diplomatic relations with Baghdad in 1990 when Iraqi ex-dictator Saddam Hussein invaded Kuwait.
Mr. Al Kadhimi is calling for closer relations with Riyadh, whose government has tried to speed up foreign investment, including Saudi funding for energy and agriculture.
Saudi-Iraqi security ties
Apart from investment and growth, the Iraqi prime minister said that he and his senior ministers discussed stability.
There was evidence that the 2019 Abqaiq refinery attack was carried out from Iraq, and earlier this year, the Righteous Promise Brigade, a relatively unknown militant group in Iraq that security analysts believe is a front for more entrenched Iran-backed militias, announced an attack on Riyadh.
But Mr. Al Kadhimi said that this was “not true. We will not allow any attack on the kingdom.”
Prime Minister added without elaborating “there have been attempts by some to disrupt relations” between Iraq and Saudi Arabia.