"We have to recognize the Iraqi state, and that Kuwait is a different state," Ahmed Chalabi, a former president of the U.S.-appointed council, said at a meeting of the American Enterprise Institute, a Washington think tank.
The IRC had "the best possible relations with Kuwait," and Kuwaiti firms were investing heavily in Iraq. "Brotherhood and solidarity will come later," he said.
He said Iraq would continue to pay Kuwait reparations for Saddam Hussein's 1990-1991 invasion of its Gulf neighbor because "We are committed to U.N. resolutions."
Chalabi's comment came a day after the Kuwaiti government angrily rejected a suggestion from Washington and other countries that the Kuwaitis should forgive the war reparations to ease the burden of Iraq's economic recovery.
The U.N. Compensation Committee has so far awarded $48 billion in war reparations to be deducted from Iraqi oil revenues. To date, Iraq has paid $17 billion, mostly to the Kuwaiti government, business and institutions.
However, Chalabi said the United Nations had reduced the rate of payment from 25 percent of oil revenues to 5 percent.
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