28-07-04

Nearly a quarter of a century after diplomatic relations between Syria and Iraq were broken off, saw some historic changes, as the leaders of the two neighbours pledged to mend fences -- and boost economic co-operation.

"We are opening a new page with Syria," interim Iraqi Prime Minister Iyad Allawi said July 25 after meeting Syrian President Bashar al-Assad in Damascus. “It is clear that our visit is the beginning of a bright chapter in relations between our two brotherly peoples.”

Underscoring this new friendship was the signing of an oil co-operation and barter accord. Under this deal, signed by Syrian Oil Minister Ibrahim Haddad and his Iraqi counterpart Thamer al-Ghadban, Syria is to supply kerosene, petrol and liquefied gas in exchange for Iraqi crude oil. However, Allawi dismissed any suggestion that the US sanctions would negatively affect Iraq's relations with its eastern neighbour.

After the invasion last year though, US forces in Iraq had shut down a key oil pipeline to Syria,which had supplied a major boost to Syria's energy sector and overseas earnings. With the new mood of rapprochement, many observers were left wondering if this pipeline might soon be reopened -- and the deal signed on oil co-operation and barter does now provide for oil shipments from an Iraqi field near the Syrian frontier. In return, Syria is to supply Iraq with refined petroleum products.

It was also said Allawi's talks with Premier Hariri in Beirut had laid the groundwork for reopening that pipeline's stretch to Lebanon's northern port city of Tripoli. Meanwhile, Iraqi Oil Minister Thamer al-Ghadban moved to dash further speculation that Iraq might reopen the Mosul-Haifa pipeline, a route that ceased operating in 1948 following the creation of the state of Israel.

There is no pipeline anymore, he said. It was removed... We are not interested in setting up a pipeline with [Israel]. What we want is to co-operate with Syria and Lebanon. Another economic issue under discussion during Allawi's visit wasIraqi deposits in Syrian banks made by the previous regime.

According to the July 26 edition of the Beirut-based Daily Star, interim Iraqi Minister of State Adnan al-Janabi said the Syrian authorities had disclosed an account worth $ 750 mm at a Syrian bank and were allowing the Iraqi delegation to check for money deposited during Saddam Hussein's rule. With interest, this sum was said to be worth around $ 800 mm.

The minister reportedly added that Syria was to audit the account before repatriating the money. He also said that Iraqi deposits in Lebanon were estimated at around $ 500 mm and that Lebanon would repatriate the money in instalments.

Source: Naharnet