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[casi-analysis] casi-news digest, Vol 1 #30 - 4 msgs

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Today's Topics:

   1. Iraqi News (Hassan)
   2. Iraq's fear of the unknown (Mark Parkinson)
   3. Iraq oil (Muhamed Ali)
   4. Iraq economy shrank 56% in 1991 (Nicholas Gilby)


Message: 1
Date: Tue, 17 Feb 2004 05:37:34 -0800 (PST)
From: Hassan <>
Subject: Iraqi News
To: CASI newsclippings <>
Rendezvous with a secular ayatollah

Ibrahim al-Shawi* describes a revealing meeting with
Iraqi Ayatollah Ali Sistani
15 February 2004

Dear All,
Yesterday [7 February 2004], I went to visit Ayatollah
Ali Sistani.

Only six months ago, who would have believed that one
day I might go and visit any clergyman of any creed?
But there you are, the things one has to do for one's

The truth of the matter is that I, like everybody
else, have been following this gentleman's stand on
democracy and elections, and the whole thing had a
rather comic tone to it: here was this old religious
leader, supposedly living in the dark ages, making a
stand for democracy while the US, the champion of
democracy, was dragging it's feet.

The fact that members of our esteemed Governing
Council were not enthusiastic about democracy came as
no great shock to me: most of them would become a
laughing stock in any democratic elections, and they
know it!

On the other hand, some circles in the Sunni clergy
have started speaking against democracy. Now I found
this really sad. Some people have started circulating
the idea that Sistani was for democracy because the
Shi'is were a majority. Well, I never bought that, for
the simple reason that Shi'is are not a single
political block.

To cut a long story short, I put on two hats I hadn't
worn for a long time and am not usually fond of (one
of a Sunni and the other of a tribal chief) and joined
a small delegation representing Sunni tribes from the
Sunni hexagon (I don't see why we should have fewer
sides than the Pentagon!) and went to see Sistani. My
hats didn't fit, and they had holes in them; I felt
like a hypocrite, but I was not to be deterred.

It was a small delegation representing the Obaid
(yours truly), the Janabeyeen, the Azza and the
Kurdish Sorchi tribe. A few other "Shi'i" friends
tagged along for the honour of seeing "His Holiness".
So much for a rather long introduction!

We were an hour and a half late for the appointment
(the traffic jams were something I have never seen the
like of). Nevertheless, his staff, his son (and,
later, he himself) went out of their way to make us
feel welcome.

We sat on the floor of a sparsely furnished room (very
much like the reception room of a not-very-poor
peasant), were served tea, had a pleasant chat with
his son, a very bright (and obviously very ambitious)
courteous young man of around 30.

He [Ayatollah Sistani] came in a few minutes later,
didn't shake hands and squatted in the way only
clergymen know how. We were introduced one by one, his
eyes were alive and alert and very much like an
earthly man, examining each [one of us] closely!

Nazar Al-Khaizaran spoke first, saying that his
eminence was talking for all Iraqis when he wanted
elections. As Sunnis, we were fully with him on that.
Then he responded.

He had a heavy (and I mean really heavy) Persian
accent which he didn't (and couldn't) hide. He used
classical Arabic, but the structure of his sentences
was not perfect.

He talked a lot, a lot! His response to 30 seconds of
courteous pleasantries was a 10 minute monologue! That
was when I was shocked!

The man was secular! I have never heard a clergyman
saying the things that we lot take to represent our

In response to Nazar's statement, he went on and on
about Sunnis and Shi'is, saying that these were
doctrines differing on how to interpret Islam and they
were all decent and well-intentioned. They were
definitely no reason for bloody strife. He talked
about the ancient pillars of the Sunni doctrine and
praised them all in detail and said how he respected
them as men of faith and as scholars. The difference
between the Shi'ah and Sunnah, he believed, was far
less significant than the danger facing the Iraqi
nation at present.

Well, personally that put him on my right side!
Then Omar Sorchi sounded his fear that, through
democracy, the Shi'ah would dominate Iraq, and
consequently, the Kurds.

He replied that he didn't believe there was much
danger of that happening. The Shi'ah were not a single
political entity. Some are atheists, some are secular;
even religious Shi'ah did not all follow the same

He said that he firmly believed that the clergy should
not interfere with the running of people's lives, with
government or with administration. He had forbidden
his followers from putting their noses into the
state's affairs. He said that clearly and
categorically several times, to stress the point.

It was my turn and I said something like "As an Iraqi,
I am grateful for Your Eminence's honourable stand on
democracy and I think that the country is fortunate to
have you in this position in this particular instant
of history." (Yes I did. And I meant it!)

I then asked him why he had requested the UN to
examine the possibility of conducting elections. (I
was partly moved by some fear I still have that the
panel of UN experts may "conclude" that it is too soon
or too unstable to have elections at present. Then we
really would have a major problem on our hands.)

He denied that flatly and said that he never did and
that my information was probably based on media
reports (which was true). He said he did not feel
obliged to accept the UN ruling on elections. He
thought the Americans wanted the UN involved because
they were having difficulties. He was set on calling
for elections as the only possible way for Iraq to
regain its sovereignty.

Some of the other things he said included (this is a
rather loose translation):

"The most important thing at this time is unity.
Division of the people is treason! Even silence, in
these turbulent times, is evil."

"Give my regards to your tribes and to the Sunnah
clergy and tell them that Sistani 'kisses their hands'
and begs them to unite with all Iraqis - Shi'ah,
Kurds, Christian, Turkmen. You just unite, and count
on me to stand up to the Americans. The worst that
could happen is that I die! That doesn't worry me."

He mentioned the late De Mello of the UN and said he
was "a good man". [UN Special Envoy to Iraq Sergio
Vieira de Mello was killed in an attack on the UN
headquarters in Baghdad on 20 August 2003.]

He mentioned "the one who was killed in Najaf" and
said that he had "talked to him", meaning "advised
him". I took that to refer to al-Hakeem. This was the
only disguised statement he made in more than an hour
of talking.

He mentioned the "Arab nation" so many times! He
evidently viewed himself as an Arab. Being born
Persian did not affect the fact that he was a Sayyed.
He made that perfectly clear.

He does not believe in "Wilayat al-Faqeeh" as the
clergy in Iran do (as you know, this is the
cornerstone of Khomeini's doctrine). He repeatedly
stressed that religion has to be separated from

He was extremely humble in his talk, his attire and
his mannerisms.

He was much younger than I had thought; looked like
early seventies but quite agile and healthy-looking.
He talked so softly, almost in whispers, that I had to
really stress myself to hear what he was saying.
(Being the insolent person that I am, at one time
during the meeting I said I wasn't hearing him well.
There were only three people between us! There was
some space on either side of him which people left out
of respect, and he invited me to sit next to him,
which I did.)

He didn't use any of the rhetoric with which clergymen
usually wrap everything they say. He was quite plain
and direct. I found that really odd for a person in
his position!

We were late for our appointment. We stayed there for
about an hour and a half. Apparently, someone else was
waiting to see him. So, his son (who was, apparently,
managing the old man's schedule) was obviously
beginning to sweat, but was too polite to say
anything. We finally took the hint!

There you are! I felt that I should share this
experience with you and I have tried to reflect as
much as I could of it in its true spirit, wil Abbas
(non-Iraqis, this is a Shi'i oath).

I now believe that the American administration could
not have wished for a better person at the head of the
Shi'ah clergy hierarchy. Let's wait and see how they
handle him!


*Dr Ibrahim al-Shawi was educated in the UK and holds
a PhD in Mechanical Engineering. "If you were looking
for a leader in Iraq, you do not have to go far, he is
the one," is how one of his friends described him.

Yes, Minister!
Intelligence failure and Iraq's non-existent WMDs

Uri Avnery *
16 February 2004

In one of the episodes of the outstanding British TV
series "Yes, Minister!" the permanent undersecretary,
Sir Humphrey, teaches his minister how to use
commissions of inquiry:

Take an honorable retired judge, a doddering old fool,
and put him in charge of the inquiry, with a sizable
honorarium. Help him to arrive himself at the required
conclusions. Feed him the appropriate facts and hint
at a peerage. From there on, everything will work out
as desired.

At this moment, three parallel but separate
commissions of inquiry are at work: one American, one
British and one Israeli. All three are supposed to
find out why the intelligence community supplied the
government with false information about Saddam
Hussein's weapons of mass destruction (WMD).

Of course, the commissions are not really intended to
discover the truth. Their purpose is whitewash. In
order to understand what has happened, no honorable
judge, Lord, former senator or retired Mossad
operative is required. Simple common sense will do.

Clearly, he who appoints a commission of inquiry
decides in advance what the conclusions will be. When
a member of the Establishment is appointed to
investigate the Establishment , the conclusion will be
that the Establishment has committed no wrong.

In Israel, for example, we had the Agranat commission.
Shimon Agranat, a respected Supreme Court judge, was
appointed chairman of a commission and asked to
apportion blame for the fateful failures of the 1973
Yom Kippur [October 1973] war. The inquiry was limited
in advance to the first days of the war, so the events
leading up to the war (including government decisions)
were excluded. The result: the prime minister (Golda
Meir) and the minister of defence (Moshe Dayan) came
out white as snow. All the blame landed on some
military officers.

(The conclusions were so scandalous that the general
public rose up against them. The commission's report
was thrown into the waste basket, Golda and Dayan were
forced to resign.)

In the UK, Sir Humphrey's method still works. Lately,
an honorable etc. etc. judge was charged with the
investigation of whether the prime minister had
"sexed-up" an intelligence report in order to drag the
country into war. The honorable judge concluded, of
course, that the prime minister was completely
blameless, and that the hostile media (in this case
the BBC) were to blame for everything.

In Britain, unlike Israel, when a senior judge makes
his decision, everybody stands up and sings "God Save
the Queen". A few young people donned judges' wigs and
threw white paint at Downing Street buildings, in
order to suggest that the Lord judge's report was a
whitewash. But the prime minister was not forced to
resign. Instead, the chairman of the BBC did.

Now three commissions are at work. The Israeli one,
which was appointed in secret and works in secret,
will finish first. After that, it will be the turn of
the British one (which is required to investigate only
the intelligence community, after the honorable Lord
judge has investigated the political structure). In
the end, well after the election in the US, the
American commission will publish its report. All three
resemble each other: they were appointed by the
political leaders, they are forbidden to investigate
the political leadership and tasked with inquiring
only into the quality of the information supplied by
the intelligence agencies to the political leaders.

President George W. Bush dragged the United States
into war on the basis of the contention that Saddam
Hussein had WMD that endangered America. Saddam, he
said, would turn over such weapons to al-Qaida
terrorists, who would use them to cause mass slaughter
in American cities.

Prime Minister Tony Blair told his people that Saddam
could use WMD against British cities within 45 minutes
(Not 40, not 50, but exactly 45).

In Israel, the Sharon government distributed gas masks
to the population and created panic, saying that
Saddam would shower us with missiles carrying chemical

Well, the Americans and British occupied Iraq and no
WMD were found. No chemical, no biological, no
nuclear. None at all.

So, how come all these illustrious intelligence
agencies were wrong? What made them feed their
political leaders with false information and cause
Bush, Blair & Co. to start a war in which a country
was devastated and many human beings killed?

Common sense would say: Bush & Blair were "deceived"
because they wanted to be deceived. Bush and the
neo-conservatives who have taken over Washington had
decided from the beginning to attack Iraq, mainly in
order to control the oil, and the tales of WMD were
designed to provide a pretext that would frighten the

Did the political leaders explicitly demand that their
intelligence organizations supply them with mendacious
reports? Perish the thought! The commissions of
inquiry will affirm that no such thing happened. And
correctly so. The leaders did not ask for this,
because there was no need to ask. The American,
British and Israeli intelligence chiefs knew perfectly
well what was required of them and delivered the
goods. They knew on which side their bread was

Did the intelligence people deliberately falsify their
information to achieve this? There was no need. The
intelligence community collects enormous quantities of
information. From this huge pile they are supposed to
extract the items that they consider credible.
Surprisingly enough, the credible material is always
that which the political leaders desire.

The decisive function of every intelligence agency is
not the collecting of the information, but its
evaluation. How do the mosaic stones form a picture?
That is a matter of judgement and intuition, both
subject to a general "concept". This is a mental
pattern in the mind of the intelligence chief. And
since the intelligence chiefs are appointed by the
political leaders, no wonder that their concepts
almost always suit the concepts of the leaders.

I predict that all three commissions of inquiry, each
in its own country, will come to the conclusion (a)
that the political leaders did not ask the
intelligence people to falsify their reports and did
not exert any pressure on them, (b) that the
intelligence people acted honestly and supplied
intelligence evaluations according to their best
knowledge and abilities, (c) that everybody acted
according to the best information available at the
time and (d) that there was a lamentable professional

Neither of the three commissions will state the
obvious: that the intelligence agencies are under the
jurisdiction of the president (in the US) or the prime
minister (in the UK and Israel), and that these bear
the responsibility for their deeds and misdeeds. They
appoint the intelligence chiefs and are supposed to
supervise them. Therefore, in view of this colossal
intelligence failure, all three of them should resign.
That will not be said and will not happen.

If all the blame is laid at the door of the
intelligence people, they should be looked at. All
over the world, they are admired. The mystique that
envelops them creates an almost religious cult that
feeds a large flock of journalists and writers. The
intelligence operative pictured in their stories is a
superman like Smiley, John Le Carre's hero, a
brilliant man endowed with almost superhuman
intelligence, a cold-blooded, sophisticated genius who
weaves his nets with incredible patience.

Unfortunately, such a person does not exist. As one
says in English: "military intelligence" is an

How do I know? There are some simple tests which every
logical person can apply for himself.

First test: human quality. All intelligence people are
eventually pensioned off, and then they can be viewed
from close up, without censorship and the cover of
mystery. And what does one see? Among them there are
some highly intelligent people. There are also quite a
number of complete fools. But most of them are very
average, superficial people, with very ordinary,
conformist views. We would not rely on such people to
give us advice on our investments. It is quite
shocking to realize that these people have decided the
fate of nations.

In Israel this is especially obvious, because retired
intelligence people star as political commentators in
all our media. It appears that their average IQ is not
higher than that of Knesset members. And, since one
cannot assume that before that they were geniuses, and
only on retirement some mysterious neurological
process eliminated their mental superiority, there is
no escape from the conclusion that even before, their
IQ was average-minus.

In an apparatus in which such people dominate, an
intelligent person has to assimilate himself. He
adapts in order to survive.

Second test: results. By now it is banal to mention
the classic intelligence failures of World War II. The
Russians were surprised by the German attack on their
country, the Americans by the Japanese bombardment of
Pearl Harbour. American intelligence was surprised by
the collapse of the Soviet Union. American and Israeli
intelligence were totally surprised by the Khomeini
revolution in Iran. Israeli intelligence was surprised
by the Egyptian army concentrations in Sinai on the
eve of the 1967 "Six-day" war, by the Egyptian-Syrian
attack on Yom Kippur in 1973, by the advent of
Hizbullah in southern Lebanon, by the first and second
Intifadas and the Rabin assassination. American
intelligence did not even dream about the September 11
attack. The list is long.

The American, British and Israeli intelligence
agencies did not have the slightest idea about what
was happening in Iraq, and whether Saddam had WMD or
not. They guessed. And if one guesses, it is best to
guess what the government wants to hear.

"Does Saddam have weapons of mass destruction?"
"Yes, Prime Minister!"

* Uri Avnery is an Israeli journalist, writer and
peace activist.


'US knew Iraq was WMD free'
By Ahmed Janabi

Sunday 15 February 2004, 20:45 Makka Time, 17:45 GMT

Iraqi nuclear scientist Dr Imad Khadduri has told he does not believe any ''errors'' were
made regarding WMD intelligence.

Dr Khadduri, a former senior Iraqi nuclear scientist
who worked for the Iraqi nuclear programme from 1968
to 1998, said there was a deliberate media blackout of
evidence proving Iraq did not possess WMD, and that to
redress the balance he had written a book in English
to have his witness testimony made available to the

In 1997 Iraq delivered a report to UN weapons
inspectors stating that Iraq's civil and military
nuclear programme was brought to a halt. When UN
inspectors left Iraq in 1998 there was sufficient
evidence that Iraq was free from non-conventional
weapons, according to Dr Khadduri.

"I was one of the people involved in writing a
detailed report in 1997 about Iraq's civil and
military nuclear programme.

"We included in the report every detail needed by the
International Atomic Energy Agency (IAEA) to verify
that Iraq's nuclear programme was suspended," Khadduri

He said Iraq's chemical and biological weapons
capability and its nuclear weapons programme were
destroyed in the 1991 Gulf war.

"Following the defection of Hussein Kamil, the
godfather of Iraq's non-conventional weapons
programme, to Jordan in 1995, he made it clear to
Ralph Ekeus, head of the UN inspection team UNSCOM and
US officials, that stockpiles of Iraq's biological and
chemical weapons were destroyed on his orders,"
Khadduri said.

"They never revealed such information, because it did
not serve their war agenda."

Khadduri said even the UN Monitoring, Verification and
Inspection Commission (Unmovic) dismissed evidence
that clearly indicated Iraq was free from WMD.

"The Iraqi government allowed Iraqi officials and army
officials, who were in charge of destroying stockpiles
of WMD after the Gulf war in 1991, to give their
testimonies to Unmovic, but the UN inspectors simply
dismissed their evidence," he said.

Dr Khadduri said Iraq was free from WMD, but that
Western and Israeli intelligence communities were not
prepared to accept Iraq would have actually taken such
a step.

Intelligence errors

Dr Khadduri believes that the US was very particular
in who it listened to regardless of whether or not
they enjoyed any credibility.

"The US administration was keen to promote Khidhr
Hamza's allegations, nicknamed as the father of
Saddam's bomb by Western media... the truth is he was
fired from the nuclear programme in 1987, just months
after he was assigned to head an Iraqi team devoted to
planning a nuclear bomb.

"Hamza retired from the Iraqi Atomic Commission in
1989 and left Iraq for Libya in 1994. He simply knows

Khadduri said he tried to get his voice heard before
the war, to correct many misleading claims alleged by
the US administration and its Iraqi backers.

"I worked in the Iraqi nuclear programme for 30 years
until I left Iraq in 1998, and there are many honest
Iraqi scientists who lived outside Iraq years before
the war. They were not approached; no one listened to
them," he said.

"It was a deliberate marginalising of reliable
sources, of the people involved directly in Iraq's WMD

He said Iraqi ex-opposition figures have been silent
about information they provided before the war.

"Where are those Iraqis who bragged of delivering
valuable information about Iraq's WMD? Why don't they
just lead the US army in Iraq to the place where the
alleged WMD are hidden?"

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Message: 2
From: "Mark Parkinson" <>
Date: Tue, 17 Feb 2004 18:04:21 -0000
Subject: Iraq's fear of the unknown

This is a report seen through the normal BBC 'filter' eg everything
was SH's fault, no acknowledgement that Iraq was better off before we
bombed it in the first Gulf War, no mention of sanctions. What is
worrying is his view that things might be declining.

Iraq's fear of the unknown

By Stephen Sackur
BBC correspondent in Baghdad

It is eight months since I was last in Baghdad. Eight months is a
long time in this turbulent city.

Time enough for my friend Kase to buy a new car, a fine leather
jacket, a mobile phone that can do everything but brush his teeth -
oh, and a gun, a nine millimetre pistol made in Italy.

Iraqis must be helped to overcome the trauma of their recent past
Why the gun? Because Kase, a naturally optimistic young man who has
used his education and language skills to good effect in the new
freewheeling economy of occupied Iraq, is deeply uneasy.

Under Saddam, Kase says, there was constant cruelty and fear, but it
was controlled, it was disciplined.

Now everything is uncertain. No-one knows who is really in charge
today, still less who will be running this long-suffering country

In Baghdad itself there is a poisonous whiff of gangsterism in the

One of the translators in the BBC office here spent a recent night in
a vain search for a close friend who had simply vanished.

He assumes the disappearance is linked to a recent spate of
kidnappings, but who is responsible and why? No-one knows.

There is an edginess about people that I did not feel so intensely in
the first months after the fall of Saddam's tyrannical regime.

On two consecutive days this week I saw street confrontations
escalate from shouting and wild gesticulation to gunfire in seconds.

One involved an altercation at a bus stop; another a misunderstanding
at a check point.

The bullets were designed to intimidate not to kill. Nonetheless,
this is a city living on its nerves.

Post-war reality

There is some good news here. Food is in plentiful supply, Iraqis now
joke about being crushed under the weight of cheap bananas being
imported courtesy of Uncle Sam.

There are twice as many cars on the road as there were before the
war; which may not be good for this city's acrid air - still less for
the crumbling roads - but it does at least point to a much improved
supply of fuel.

Rebuilding is beginning and many fat contracts have been handed out.

There is hope here, plenty of it, but there is a new kind of fear
too. Under Saddam it was a fear of the known, now it is a fear of the

Kase and the lucky few can now use their mobile phones in Baghdad.
Goodness, you can even buy a wide screen plasma TV just down the
street - but whatever you do, do not forget to buy a generator as
well because mains electricity here is still off almost as much as it
is on.

And that is the post-war reality here. Remaking this broken country
is a massive task which will require not just years but decades of
sustained effort.

I spent a recent afternoon in Sadr city, Saddam City as it used to be
called. The sprawling dust coated quarter of Baghdad has long been
home to more than a million mostly poor Shia Iraqis.

In the heart of the neighbourhood is the Qadisiyah hospital, a place
I have come to know well over the years.

Last time I visited, I found appalling shortages of even the most
basic drugs. Wards were filled way beyond their capacity with cases
of typhoid and gastroenteritis.

Eight months on? Well, Qadisiyah still feels like a hospital barely
able to cope.

The failing sewer system, the piles of stinking rubbish on every
neighbourhood street means they are still battling with diseases that
thrive on dirty water and communal filth; and there is still a
desperate shortage of specialist drugs.

America's obligation

I met one tiny little girl, Fatima, who looked barely four years old.
In fact she was nine, but the doctors here have run out of the growth
hormone she needs.

Fatima's impoverished family were told they would have to travel to
Jordan if they wanted to continue her treatment. They might as well
have suggested a trip to the moon.

The shops are filling up, but some necessities are still in short
supply. "Look around you," said Doctor Hussan, my guide around
Qadisiyah. "The place has been painted since you were last here, but
what else has changed?"

Please do not interpret his words or mine here as a tacit
acknowledgement that life under Saddam was better than this. Doctor
Hussan is a Shia Iraqi who lives with the memory of what that fallen
dictator did to his people in 1991 - mass murder on an unimaginable

But Iraq has to overcome the trauma of its recent past.

The Americans - who chose to occupy this damaged land - have a duty
and obligation to lay the foundations for a stable future.

Maybe I have been jaundiced by the events of this particular week.

Two dreadful suicide bomb attacks on Iraqis who were prepared to work
alongside the US-led coalition - and the dark warnings of civil
strife, ethnic and religious feuding if the Americans do not hand
over power soon, or even if they do.

At the end of this, my first week back in Iraq since last May, my
confidence in Iraq's future is faltering.

Yes there is hope here, plenty of it, but there is a new kind of fear
too. Under Saddam it was a fear of the known, now it is a fear of the

Mark Parkinson


Message: 3
Subject: Iraq oil
Date: Wed, 18 Feb 2004 11:48:30 -0000
From: "Muhamed Ali" <>
To: <>

[ Presenting plain-text part of multi-format email ]

Special investigation


Iraq oil cash funded MPs' campaigns

Businessmen handed on money illicitly siphoned from UN deals to pressure
groups run by George Galloway and Tam Dalyell

David Leigh and David Pallister
Tuesday February 17, 2004
The Guardian <>,3605,1149785,00.html

Special investigation


10 cents a barrel: how Iraqi oil fuelled UK campaigns

Secret commissions paid to pro-Saddam middlemen by western oil firms
found their way into George Galloway's anti-sanctions drives

David Leigh, David Pallister, Brian Whitaker, Owen Bowcott, Rory
McCarthy in Baghdad, Nick Paton Walsh in Moscow, Jon Henley in Paris
Tuesday February 17, 2004
The Guardian <>,3605,1149548,00.html

Was I wrong about Iraq?

Talk about it <>

David Aaronovitch
Tuesday February 17, 2004
The Guardian <>,3604,1149663,00.html

Was I wrong about Iraq? Not as wrong as many of my Iraqi colleagues, if
that is any consolation to non-Iraqi colleagues.




Message: 4
Subject: Iraq economy shrank 56% in 1991
Date: Wed, 18 Feb 2004 13:05:55 -0000
From: "Nicholas Gilby" <>
To: <>

[ Presenting plain-text part of multi-format email ]

INTERVIEW-Iraq data shows economy shrank 56 pct in 1991
Tuesday February 17, 12:54 pm ET
By Khaled Yacoub Oweis

BAGHDAD, Feb 17 (Reuters) - Iraq's gross domestic product fell 56
percent in 1991, the year after U.N sanctions were imposed on Iraq for
its invasion of Kuwait, according to official figures.

Iraq's central bank published official statistics for the first time in
26 years on Tuesday that showed the extent of the economic damage
inflicted by Ba'ath party rule and by United Nations sanctions in the

The figures were shown only to Saddam Hussein and his aides as they
revealed the regime's vulnerability.

Sanctions remained in force until May of last year.

The economy grew 10 percent in 2001 as Iraq started to flout sanctions,
exported more oil and goods flowed in from countries like Syria. The
central bank is working to publish figures that cover the period after

"This is the first central bank bulletin since time immemorial. The
information we produced before was secret," Mudhir Kasim, the bank's
chief economist, told Reuters in an interview.

"This is the starting point of regular publications of reports on the
economy of the new Iraq."

Iraq ran deficits during the past decade, that reached 790 billion
dinars ($409 million) in 2001. The 2003 post-Saddam budget was balanced,
but Iraq's U.S.-led administration projects deficits in the next few

"The government printed money to finance the public debt and pay
salaries. This stopped after the regime fell. The monetary authorities
are no longer a tool at the disposal of the government," Kasim said.

He said the central bank is planning a treasury bill auction to sell
public debt, similar to the auction it set up last year to sell dollars
from the country's oil revenues to strengthen the dinar.


The exchange rate fell from 10 dinars to the dollar in 1991 to 3,500
just before Baghdad fell to U.S. forces in April 2003, according to the
central bank data.

The dinar has been improving since the last year's auction, trading
around 1,400 to the dollar on Tuesday.

"We are satisfied with the present exchange rate. Reaching the 1,500
dinar to the dollar mark was important psychologically," Kasim said.

Inflation soared in the 1990s from the combined effect of U.N. sanctions
and the government's printing money. The consumer price index rose from
18 points in 1991 to 5,197 points in 2002.

Kasim said publishing the data would make it difficult for future
governments to manipulate monetary policy and would help attract
investment, especially to a banking sector undermined by sanctions and
the former regime.

Private bank deposits were 1.24 trillion dinars at the end of 2002
compared with 1.52 trillion dinars in government deposits. Banks' credit
to the private sector was 312 billion dinars.

Abbas al-Bayati, general manager of the private sector Investment Bank,
said the data ushered an era of transparency.

"This is part of general liberalisation," Bayati said. "It will reflect
positively on the work of the banking sector."

Nicholas Gilby
Senior Research Executive
MORI Social Research Institute
Tel: 020 7347 3000
Fax: 020 7347 3803

MORI's Report on 2003, covering politics, public services, the economy,
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