US resumed cash shipments to Baghdad: Iraq govt spokesperson

BAGHDAD: The United States (US) has resumed cash shipments to Iraq after a delay, signalling its support for Prime Minister Ali al-Zaidi’s administration, with the premier expected in Washington later this month, a government spokesperson said Thursday.

Iraq’s revenues from oil exports are largely held at the Federal Reserve Bank in New York, under an arrangement reached after the 2003 US-led invasion that toppled former ruler Saddam Hussein.

Under the system, payments for oil are made into dollar-denominated accounts in the US which are then either used to pay for imports or flow to Iraq as cash.

Earlier this year, Washington suspended the cash transfers to Iraq as it piled pressure on Baghdad to disarm Iran-backed armed groups, which launched hundreds of attacks on US facilities in Iraq during the Middle East war.

Iraqi officials downplayed the issues, saying the dollar shipments had ceased due to the closure of airspace and the security situation.

Government spokesperson Haidar al-Aboudi told AFP that cash “shipments have resumed some time ago”.

“The resumption is a positive indicator” ahead of Zaidi’s visit to Washington, Aboudi said, adding “we look at it through the lens of cooperation, coordination, and partnership.”

Aboudi said that Zaidi’s top priority in Washington would be “the economic partnership with the United States”.

In May, a senior US State Department official, speaking on condition of anonymity, said the US was looking for “concrete actions” from Zaidi to distance the state from pro-Iran armed groups before resuming cash shipments and security aid to the country.

Zaidi, who only recently took office with the blessing of the United States, has vowed to ensure a state monopoly on weapons and urged armed groups to hand over their weapons to the state.

During his visit to Washington, the first since he took office in April, Zaidi hopes to attract more US investment to Iraq, which urgently needs to revive its economy, especially after revenue losses caused by the halt of oil exports during the Middle East war.

Like other Gulf oil producers, Iraq, a founding member of OPEC, was greatly affected by the war.

It is hugely dependent on oil exports, which make up about 90 percent of its budget revenues, while the vast majority of its crude travels via the Strait of Hormuz.