*EPF505 01/26/01
Fact Sheet: U.S. Department of State on Iraqi Underspending
(Regime fails to spend on behalf of Iraqi people) (780)

Following is the text of the Department of State Fact Sheet (billion equals 1,000 million):

(begin fact sheet)

January 26, 2001

United Nations letter shows extent of Iraqi mismanagement and waste in acquiring humanitarian supplies.

Ten years after Operation Desert Storm and the liberation of Kuwait by an international coalition of forces, Iraq remains under the rule of Saddam Hussein and his regime.

In recent weeks, Tariq Aziz has asserted that Kuwait "got what it deserved" when Iraq invaded in 1990. Saddam's son Uday, a member of Iraq's Parliament, called for a new parliamentary emblem showing Kuwait as part of Iraq. As Iraq has stepped up its threatening rhetoric, a January 17, 2001 letter to Iraq illustrated in stark detail the extent of Saddam Hussein's neglect of the welfare of his own people. The facts and figures from the United Nations deserve close attention, as they provide definitive proof that UN economic sanctions and international diplomatic isolation are not the causes of the plight of the Iraqi people. Against the unequivocal facts explained by the UN, Saddam Hussein and his regime stand exposed as the true authors of Iraq's misery.

In a stinging letter issued recently, the United Nations has pointed out the extent of Saddam Hussein's callous disregard for the welfare of his own people.
Baghdad has inexplicably delayed ordering sufficient supplies for health, education, water, sanitation and the oil sector under the UN-administered Oil-for-Food program. This program allows Iraq to sell oil in order to purchase supplies for the Iraqi people, to rebuild critical infrastructure and to ensure the continued production of oil. Using the considerable funds in this program, Iraq orders supplies every six months, and submits these orders to the UN for approval.

In the most recently completed six-month phase of the program (June to December, 2000), Saddam Hussein's dereliction in providing for the Iraqi people and the nation's economy is laid bare.

During this period, US$7.8 billion were available to Iraq for purchases during this period, yet Iraq submitted purchase applications worth only US$4.26 billion - barely 54 percent of the amount available for purchases to help the humanitarian needs of the Iraqi people.

In key sectors of the Iraqi economy, Saddam's regime's disregard for the welfare of the Iraqi people is made plain:

-- Despite the international concern for the health and nutritional needs of the Iraqi people, the total value of applications received in the health sector was only US$83.6 million. US$624.7 million are allocated by the UN for the Iraqi health sector, meaning that Saddam Hussein spent only 13 percent of funds available for health supplies it could have purchased

-- Iraq submitted only US$21.5 million in applications for educational supplies, barely six percent of the US$351.5 allocated for this purpose.

-- Iraq submitted only US$184.7 million in water and sanitation applications, out of US$551.1 million available.

-- Iraq requested only US$22.7 million in applications for spare parts and equipment for the oil sector, just three percent of the US$600 million allotted.

More than US$4 billion sit in a United Nations escrow account, available to the Iraqi government for the purchase of the humanitarian supplies the Iraqi people so desperately need, and which the Iraqi regime claims it cannot obtain due to economic sanctions.

Yet the list goes on of Saddam's maneuvers that continue to mire the Iraqi people in misery.

In December 2000, Iraq shut off and then slowed down its oil exports in an attempt to extort control of oil revenues. According to the United Nations, as of January 10, 2001, Iraq's reduced exports had already amounted to lost revenue totaling US$1.4 billion dollars.

Baghdad's recent insistence on selling its oil in Euros rather than US dollars, which is the worldwide industry standard, will likely result in Iraq losing US$250 to US$300 million yearly in conversion fees and lost interest.

Many countries in the world have made concessions and gestures aimed at reducing Iraq's international isolation. Saddam Hussein's inaction in the past six months shows that he cares little for these gestures, and cares even less for the Iraqi people. As long as Saddam Hussein blocks United Nations efforts to provide needed assistance to the Iraqi people and economy, he shows that his regime will continue to pose a threat to the region and remains the primary cause of suffering in Iraq.

(end fact sheet)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

Return to Washington File Main Page
Return to the Washington File Log