BAGHDAD — The United Nations Security Council (UNSC) has agreed to lift sanctions imposed on Iraq when the country invaded Kuwait 27 years ago.

The Iraqi Foreign Ministry said Dec. 9 the country had completed its obligations under the sanctions, which were imposed in 1990 when dictator Saddam Hussein invaded Kuwait. The UNSC levied the penalties after naming Iraq a threat to international security and ordered it to pay reparations to states and other parties that suffered as a result of the invasion.

Some 27 years later, Iraq is still suffering the effects of the invasion. Hisham al-Rukabi, the head of Vice President Nouri al-Maliki’s press office, told Al-Monitor that the Iraqi people welcomed the recent UN decision.

Saad al-Hadithi, the spokesman for Prime Minister Haider al-Abadi, said the move is “an important event in Iraq’s recent history and the closing of a painful [age] that lasted a long time, during which the Iraqi people suffered reduced sovereignty as well as political and economic sanctions that damaged the country’s institutions as well as individuals.”

Lifting the sanctions, he said, “will make Iraq more able to develop and achieve prosperity for its citizens, and restore the world’s trust so it can deal with Iraq as a fully sovereign nation.”

He predicted the decision will allow Iraq to play a greater political and economic role in the Middle East, experience an economic recovery and attract new investment.

Iraq has long suffered the consequences of the sanctions, which were enforced militarily any time Iraq posed a threat to international peace. The country was economically cut off from the world, and its sea, air, land and communications links were severed. Its diplomatic relations with other states were cut, and it lost control of its financial resources and oil exports, which were placed under UN supervision under the oil for food program. A significant proportion of its revenues were used to pay states harmed by its Kuwait invasion.

“Iraq paid reparations to the states that were environmentally and economically harmed by the war, including Israel and Jordan,” but its reparations stalled in 2014 because of the fall in oil prices, according to legal expert Tareq Harb. “The government’s deal with Kuwait to pay the remainder of reparations in the form of gas exported via Basra prompted Kuwait to report to the UN that Iraq was fulfilling its obligations, resulting in a resolution in Iraq’s favor.”

Kuwaiti Oil Minister Essam al-Marzouq said Dec. 10 that the 10-year deal with Iraq provides for imports of 50 million cubic feet of natural gas a day in the first stage, later rising to 200 million. The deal appears to have been the key factor that persuaded Kuwait to call for the UN to lift the sanctions.

Iraqi parliament member Jassem Mohammad Jaafar, who is close to Abadi, gave Al-Monitor more details on the deal. “Before the sanctions were lifted, Iraq was not even able to open foreign bank accounts in the name of the government, and its economic and financial contracts and commercial activities were conducted through intermediaries in order to avoid lawsuits. That cost the Iraqi treasury enormously,” he said.

“From now on, Iraq can manage the legal and technical aspects of its financial resources itself — along with everything relating to deposits and foreign real estate holdings — and dispose of its own affairs,” he said. “Other countries will no longer hesitate to invest in Iraq, and foreign firms will be encouraged, as Iraq is an oil-rich country and also has major gas reserves and swathes of agricultural land that could be very profitable.”

Iraqi writer and analyst Wathiq al-Jabari, a member of the Tanmiya Center, told Al-Monitor that the resolution will have “positive social effects.”

“All efforts to freeze Iraqi funds in international banks have ended, which will enhance Iraq’s financial standing and its creditworthiness,” he said.

The decision to lift sanctions coincided with Abadi’s announcement Dec. 9 that the fight against the Islamic State was over and security and stability had returned to Iraq. He also played up the country’s investment climate now that it can once again work with international firms and banks. With its vast oil reserves, Iraq can look forward to an economic revival, providing the government is able to bring stability and work fast to stamp out violence and terrorism.