*EPF206 03/13/01
Iraqi People Suffer Despite Lucrative U.N. "Oil-for-Food" Plan
(Kofi Annan's report to the U.N. Security Council) (1040)
By Jane A. Morse
Washington File Staff Writer
Huge revenues could be generated by an international "oil-for-food" program for Iraq, but the people it is designed to help are not seeing the benefits that they should, says a United Nations report.
Oil-rich Iraq has been under a U.N. sanctions regime since the early 1990s for its aggression against Kuwait and its refusal to comply with international demands that U.N. inspectors be allowed to examine suspected weapons of mass destruction production facilities. Nonetheless, the Iraqi government has been authorized to export "unlimited amounts of oil and to import a wide range of goods to meet the humanitarian needs of its population and to rehabilitate its civilian infrastructure," says U.N. Secretary-General Kofi Annan in a report released March 2 to the U.N. Security Council.
With the increased revenues now available for the implementation of the program, "the Government of Iraq is indeed in a position to reduce current malnutrition levels and improve the health status of the Iraqi people," says the U.N. Secretary-General.
But since December 2000, there has been "a substantial drop" in oil exports from Iraq under the program, the report says.
"Although no major breakdown in the oil facilities has been either observed or reported," the report says, the export of petroleum from Iraq has proceeded "very unevenly."
"By 31 January 2001, Iraq had already lost about 2 billion euros in revenue," the report says.
The U.N. Secretary-General urges Iraq to increase its daily average rate of oil exports, given "its proven capacity" demonstrated in the past, and he emphasizes that the Iraqi people "must receive all the assistance that they direly need and deserve." Iraq's reduction in oil exports since December 2000 has cost the oil-for-food program $2.5 billion in lost revenue.
Of special concern to the U.N. Secretary-General are "widespread reports of additional charges imposed on buyers of Iraqi crude oil." In an effort to end any system of kickbacks, the U.N. Security Council Committee directed oil overseers to advise buyers of Iraqi crude oil that the Committee had not approved a surcharge of any kind on Iraqi oil and that buyers should not pay any sort of surcharge to Iraq. It further stipulated that payments for purchasing Iraqi crude oil could not be made to a non-United Nations account.
The U.N. Secretary-General reports that an expert mission will be visiting Iraq this month to discuss arrangements for the utilization of 600 million euros for the oil sector. Its goal is "to formulate modalities acceptable to all parties concerned to support the use of cash in meeting program requirements."
There is a shortfall as well in contracts in areas other than the oil sector, according to the report. For the water and sanitation sector, only $214 million in contracts were received for a $551 million budget. For the health sector, only $135 million in contracts were received for a $625 million budget, while for an education budget of $352 million, the Iraqi government put forward only $34 million in contracts.
In regard to the Iraqi oil sector, the secretary-general's report stated that only $35 million in contracts were received for a $600 million budget--only 5.8% of the total budget.
The U.N. Secretary-General calls for the Government of Iraq to "expedite its contracting and utilization of funds available...in order to minimize such inordinate delays in the submission of applications...much to the detriment of program implementation."
The report also expresses concern about "inordinate delays" by the Iraqi government in issuing visas to U.N. personnel who help carry out the program. "Such delays have been adversely affecting the effective implementation of the program...and have also resulted in considerable financial losses," the report says.
Despite these and other problems, the "oil-for-food" program has enjoyed considerable success, according to the report.
"Over the past four years, the program has contributed to arresting the decline in, and in some areas improving, the living conditions of the average Iraqi," the report says. Since December 1996, over $10 billion in supplies were delivered to Iraq, including $562 million worth of oil spare parts and equipment, it says.
According to the report, the "oil-for-food" program has helped in providing adequate nutrition for the Iraqi population, although chronic malnutrition has actually increased in some rural areas.
"The poorer strata of society," the report notes, "are often forced to barter what they receive through the food basket in order to procure other basic necessities. The purchasing power has steadily declined, and while food items are readily available to markets, they are unaffordable to the average Iraqi citizen. Thus, even though Iraq has a surfeit of vegetables, fruits and animal products, the majority of Iraqis cannot afford to buy them."
U.N. observers have found that Iraqi health facilities lack adequate computer capacity to track and manage supplies, the report says. The provision of appropriate computer systems, it says, would "facilitate tracking of the arrival, distribution and expiration of drugs."
Because of shortages and poor drug management policies, medicines are still being rationed to outpatients, the report says. "One of the serious health risks of this practice," it says, "is the potential development of resistant bacterial strains during the treatment of infectious diseases where less than the full course of antibacterial agents is provided to patients."
Citing the expansion of the "oil-for-food" program's humanitarian benefits into sectors such as education, transport and food handling, and water and sanitation, the U.N. Secretary-General says "the time has come to review the validity of applying procedures and practices, originally designed to cover food and medicine, to a vastly more expanded and more complex array of activities and equipment."
A "more targeted and results-oriented plan, with a clear statement of objectives to be achieved" is essential, the U.N. Secretary-General says, and he calls for "all parties to take concerted measures to alleviate the plight of the Iraqi people."
The full report of the U.N. Secretary General can be viewed at the UN website at
http://www.un.org/Docs/sc/reports/2001/186e.pdf
(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Web site: usinfo.state.gov)
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