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Report of the Secretary-General



On 22 February, the UN Secretary-General released his latest report on the
situation in Iraq and the oil-for-food programme. It can be found at
http://www.un.org/Depts/oip/reports/90day5.htm
Additionally, the comments of Benon V. Sevan, Executive Director of
the Iraq Programme, are informative, and can be found through
http://www.un.org/Depts/oip.
These reports cover the 90 day period up to 31 January 1999.
As these documents are a rather tedious and long read, but essential to
analyse the mis/information coming out of the UK & US governments (and
their mass media) which increasingly quote highly selective portions of
them, I'm including my summary below. I'm only commenting on south &
central Iraq, under central government control, where the humanitarian
problems have mostly been:

Both the S-G and Sevan identify the main problem as the lack of revenue
coming into Iraq, due to the decline in oil prices. The S-G writes:

"Indeed, the most serious issue facing the implementation of the
programme at present is the growing shortfall in revenues required to
implement the approved distribution plan. It may be recalled that despite
the increase in the volume of exports of oil, the financial target of the
$3.1 billion required for the implementation of the enhanced distribution
plan could not be met. In fact, even with the October 1998 revision
downwards of the funds allocated to various sectors, amounting to some
$2.2 billion, there was a shortfall of over $264 million. Owing to
insufficient phase IV revenues, approved applications worth approximately
$500 million could not be funded. Accordingly, the Office of the Iraq
Programme agreed to the Government¹s request to transfer selected phase IV
applications to phase V." (para 102; also see para 9).

That is, the Iraqi government did not raise enough money to pay for the 
supplies it planned for under the Fourth Distribution Plan (the six months
up to 24 November), by a lack of $500million.

Benon Sevan adds:
"The increasing shortfall in revenues required for the implementation of
the programme has become the greatest challenge which we have been facing
since the start of the previous phase. For the current phase ending on 25
May, gross oil revenues are anticipated to reach $2.9 billion, leaving
only about $1.8 billion for humanitarian supplies and oil spare parts and
equipment for the Iraqi oil industry, in contrast to the $2.7 billion
required for the implementation of the humanitarian programme."

That is, only 62% of the funds needed for the humanitarian programme were
raised through oil sales.

Sevan continues:
"Iraqi crude oil prices, however, are not expected to recover
significantly over the coming months from their current levels of between
$8 and $9 per barrel. We are therefore far from a position where we could
reach the target of the revenues authorized at $5.2 billion by resolution
1153 (1998). Accordingly, any suggestion to raise further the ceiling of
revenues is simply an academic exercise, unless bold, imaginative and
pragmatic alternatives for investment in Iraq¹s oil industry are
considered by the Council. There is no way, and can be no way for Iraq, to
increase its capacity to export additional oil to finance both the
humanitarian programme and to meet the demands for necessary spare parts
and equipment."

This is an implicit snub at the UK / US idea that the ceiling for oil
sales should be removed; as Sevan states, there is no way Iraq can pump
more oil than it does at the moment. Even with the oil spare parts now
coming into Iraq, the effects will be limited. The S-G, after welcoming
the increased rate of approval given to applications for parts by the
sanctions committee, writes:

"Nevertheless, I should like to point out to the Council that even with an
expeditious approval of all applications, it is unlikely, in the view of
Saybolt oil experts, that the approved spare parts and equipment requiring
a long delivery period will have a significant impact on the export
capacity of the Iraqi oil industry much before March 2000." (para 101)

No improvement before March2000. As far as other problems go, the problem
of distribution is a persistent theme running through the reports. These
points must be taken seriously, as this is where UK & US government will
place emphasis.

The most serious case is that of medicines. The S-G writes of:
"the slow pace of distribution from Kimadia central warehouses to the
governorate warehouses, and further to health centres. As of 31 January
1999, approximately $275 million worth of medicines and medical supplies
had accumulated in warehouses, which is more than half of all supplies
that arrived in the country for all phases. The quantity of medical
equipment in warehouses is alarmingly high. According to information
provided by United Nations observers, only 15 per cent of all medical
equipment received by the warehouses has been distributed. Follow-up
visits to sites receiving the equipment found that only 2 to 3 per cent
had actually been installed. As a consequence, stocks in warehouses have
exceeded their capacity." (para.30)

But there are complex  reasons for this. The S-G identifies in particular:
"the lack of modern managerial tools, poor working conditions within the
warehouses and the lack of transport for moving the supplies to health
centres... [additionally] the rigid hierarchy in the
Ministry of Health administration ... makes it difficult for
functionaries to approve deliveries without approval of superiors, and
this takes time. A variety of sources, including WHO, suggest that
stockpiling seems to have increased following September 1998, when
tensions mounted, and superiors may have deliberately withheld supplies in
anticipation of emergency needs." (para.31)

The other sector for which distribution problems are a major impediment is
the water & sanitation sector. Here, the problem of lack of loading
equipment is stressed:
"only 35 to 40 per cent of the supplies received in the country for the
water and sanitation sector have been brought to sewage stations or water
sites. The anticipation of emergency needs by stockpiling, in this sector
as in other sectors, appears to be a persistent problem, and this is one
of the factors contributing to the slow pace of delivery. UNICEF and the
United Nations Office of the Humanitarian Coordinator for Iraq have
repeatedly referred to the non-availability of cash funds as another
explanation for the delays in distributing and installing supplies. The
General Establishment for Water and Sewage (GEWS) central warehouse is
capable of unloading only one truck per day, and United Nations observers
report that, with the recently increased number of in-country arrivals,
trucks are lined up waiting to unload their freight. The recent increase
in arrivals has increased the pressure on storage facilities and reduced
handling efficiency, and this has contributed to delays in conveying
supplies to treatment sites." (para.38)

As a remedy, both the S-G and Sevan stress the need for coordination
between Iraq and the Security Council in improving transport & other
facilities. The S-G writes:
"It is also important for the Security Council Committee to acknowledge
that a humanitarian programme of such magnitude requires a commensurate
level of transport, communications and material-handling equipment and to
be ready to act favourably on requests for essential logistic support."
(para.106)

Sevan adds:
"few of these essential prerequisites [for transport & logistics]  have
been made available in an efficient and timely manner and as resolution
986 (1995) concentrates overwhelmingly on the provision of imported
commodities, it has not been able to guarantee the optimum utilisation of
goods supplied under the programme. I welcome the 661 Committee¹s
recognition that major engineering projects in the oil and electricity
sectors require the funding of service arrangements. This is a realistic
response to a very grave situation and the unavailability, locally, of all
necessary technical expertise and resources. However, many smaller
projects and activities seeking to utilise supplies delivered under the
programme also require similar assistance. A greater measure of
flexibility by all concerned would be welcome and the Panel on
Humanitarian Issues may wish to review the issues involved."

As that last sentence makes clear, blame cannot be placed on one party
alone. However, Iraqi distribution services also receive complements from
the S-G, for their actions when the bombs fall:
"Distributions continued regularly during the air strikes in mid-December
with only minor delays reported from two Baghdad warehouses. The
destruction of the storehouse in Tikrit, which contained 2,600 tons of
rice, did not affect December 1998 distributions to Salah Al Din
governorate, as immediate measures were taken by the Government to
transfer rice directly from points of entry to local food agents. In fact,
WFP observers noticed a slight improvement in the efficiency of food
distributions during the months of November and December 1998." (para.26)

Two other multi-sector problem are identified. Firstly, the sanctions
committee is still blocking essential goods. For example, the
cattle vaccine for foot and mouth disease is being blocked:
"A recent outbreak of foot and mouth disease, reported by the Department
of Animal Health and confirmed by FAO observation, has affected
approximately 1 million cattle and sheep and is causing high mortality
among offspring from infected mothers. Unchecked, the epidemic has the
capacity to substantially reduce animal productivity. Only two batches of
vaccines, ordered under phases I and IV have been made available,
amounting to approximately 500,000 doses. This is not enough to contain
the outbreak, and FAO¹s estimate of the cost for procuring sufficient
vaccines and facilities is in excess of 15 million." (para.44)

Similarly, the sanctions committee has put on hold 25 diesel generators
for the electricity sector, which are essential for rural wellbeing
(para.51). Sevan sums this problem up:
"We welcome the increasingly flexible approach taken by members of the 661
Committee in reducing substantially the holds placed on oil spare parts
and equipment. However, just as we welcome the decrease in numbers of
holds, we face additional holds placed on new applications. We hope that
after further reviews those holds will also be lifted."

From Sevan's annex, we see that the number of holds in the non-oil
sector has decreased only from 33 (20Nov98) to 27 (24Feb99). Each 'hold'
placed is often of a large order amounting to many millions of dollars
worth of supplies.

The second problem is poor Iraqi ordering in certain sectors. The S-G's
criticisms here seem more muted than in previous reports. Some problems
are attributed to inefficiency (for medicines, slow contracting is blamed
on computer problems and lack of computer expertise: para.29). However,
targetted nutrition programmes still warrant special attention:

"In order to implement a targeted nutrition programme, the enhanced
distribution plan provides for $8 million worth of high protein biscuits
for pregnant and lactating women, as well as for 1,500 tons of therapeutic
milk, valued at about $8.7 million, for malnourished children under five
years of age. As at 31 January, the Ministry of Health, after considerable
delay, and numerous reminders from the Office of the Iraq Programme, had
signed contracts for only $1,692,100 worth of high protein biscuits. These
contracts have not yet been submitted to the Secretariat. As at 31 January
1999, contracts for only 260 tons of therapeutic milk, valued at about
$1.5 million, had been submitted." (para.34)

Briefly, on specific sectors:
Food. The Iraqi government aimed to provide a 2,200 kcal foodbasket to
each person every day. However, insufficient stocks meant that the
foodbasket varied between 1,955 & 2,002 kcal per person per day (para.25)

Medicine. There are still great shortages. The S-G writes: "Drugs continue
to be rationed for outpatients and health centres, however, and while the
drugs delivered to health facilities may last longer, WHO reports that the
quantities delivered to health centres are still only one third of the
overall quantity required to meet real needs. Antibacterial drugs rarely
last more than half of the time between deliveries to health centres."
(para.28). Repeat, only 1/3rd of the necessary medicines are received.

Malnutrition is still a sever problem. The S-G writes: "General
malnutrition among children under five in the centre/south was found to
occur in 23.4 per cent of children in 1996, in 24.7 per cent of children
in 1997 and in 22.8 per cent of children in the most recent survey of
March 1998. While there has been no significant reduction in general
malnutrition among infants or among children under five, previously
rising prevalence rates have stabilized, albeit at an unacceptably high
level." (para.33) That is, 'stabilisation' at almost a  quarter of the
infant population of a country.

Water supplies are still poor, and "has not improved to any extent"
(para.39). "United Nations observers report large amounts of raw sewage
being discharged into rivers as filters and pipes are clogged. The
treatment plants visited by United Nations observers and UNICEF are
reported to function well below internationally accepted standards, and
because of the lack of sufficient supplies, they are expected to
deteriorate further." (para.40)

Agriculture is declining in certain sectors. As the FAO estimated, there
is a 30% drop in crop production (para.43).

Electricity. Both the S-G and Sevan highlight the problem of electricity.
Power cuts have increased nationally, often by considerable amounts; in
Baghdad, for example, there is no electricity for 10 hours a day
(para.48). This has considerably affecting humanitarian supplies, eg
preventing effective cold storage for vaccines (para.50).

Education. There is a general lack of information here. However, one
pertinent estimate is reported by the S-G: "United Nations observers
surveyed 54 schools, equally distributed throughout nine governorates, and
reported that 83 per cent of the schools visited required rehabilitation.
....The United Nations observer survey reported that 30 per
cent of the schools visited required plumbing repairs, 53 per cent did not
have enough desks and 80 per cent of them had no staff furniture. The one
common feature of the two surveys is the indication of the urgent
requirement for desks." (para.55)

Finally, one point to note. Out of the money earned through the
oil-for-food programme, $2.95 billion has gone to the UN Compensation Fund
(compared with $4.94 billion for humanitarian supplies: figures in S-G's 
annex I). The operating expenses of the compensation commission itself has
taken up $125 million (ie lawyers fees, court rooms &c). If this money had
been used for the Iraqi people, rather than for Western companies who lost
money in Kuwait & their lawyers, there could have been 59% more
humanitarian goods getting to the people.

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