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Baghdad Slashes Government Budget
By Leon Barkho, Associated Press Writer, Wednesday, May 26, 1999; 4:47 p.m. EDT
BAGHDAD, Iraq (AP) -- In a bid to halt the decline of the local currency, the Iraqi government has decided to slash its budget by 10 percent and to scrap restrictions on the possession of hard currency.
The measures, publicized Wednesday in most state-run dailies, came as the Iraqi dinar tumbled to lows unseen in the past three years. Its slump is hurting Iraq's domestic and external trade, Baghdad businessmen said on customary condition of anonymity.
In the past three months, the dinar has lost almost 28 percent of its value against the dollar. Earlier this week, it nosedived to 2,240 to the dollar. On Wednesday, it was exchanging at 2,220 to the dollar.
The gyration, though almost negligible in dollar terms, affects trading as most goods in Iraq are priced according to the dinar-dollar ratio at time of selling.
The papers said the slash in the budget was decided at a cabinet meeting chaired by President Saddam Hussein late Tuesday. The papers did not say when the 10 percent cut would take effect. The government usually refuses to give figures or estimates of expenditures, but the slash could be billions of dinars.
Nonetheless, the cuts have not touched the meager wages of millions of state employees who earn an average monthly salary of 5,000 dinars, or $2. Reducing government spending has been a priority since 1995 when the dinar slipped to almost 3,000 to the dollar -- its all-time low.
Since then, the government has frozen wages but raised the number of services given away for free.
Rates for water, electricity, as well as telephone and postal services, have increased several times since 1995. The dinar was officially worth about $3 before the United Nations slapped trade sanctions on Iraq for its 1990 invasion of Kuwait.
But the world body bypassed the sanctions when it allowed Iraq, in December 1996, to export no more than $5.2 billion worth of oil a year under the so-called oil-for-food deal. The oil program injects billions of dollars into the Iraqi economy every year in the form of food, medicine and other essential supplies. But apparently both the oil deal and the government's austerity measures have failed to check the dinar's decline.
In an unprecedented step, Finance Minister Hikmat Mizban Ibrahim urged Iraqis this week to deposit their dollars in Iraqi banks in return for ``suitable interest.'' He said the government has removed all curbs on the possession of hard cash, and Iraqis were now allowed to ``buy, sell and open bank accounts'' in foreign currency. Ibrahim said he hoped the move would end speculation by unlicensed money changers whom he blamed for the dinar's fall.
Iraq's Crop Harvest Down by Half
By Leon Barkho, Associated Press Writer, Tuesday, May 25, 1999; 7:44 a.m. EDT
BAGHDAD, Iraq (AP) -- The worst drought on record in Iraq has cut crop yields to half of last year's totals, a U.N. report released today said. The Iraqi government usually refuses to give figures or estimates on agriculture, making the U.N. report particularly significant. ``The Tigris Basin has seen the lowest water flow rate ever recorded,'' the report said. ``All indications point to a wheat and barley crop failure.''
The U.N. report predicts feed will become more expensive, adversely affecting livestock and poultry production. It also expected further increases in consumer prices of dairy and meat products.
``The drought could cause crop losses estimated at 37 percent of wheat and 63 percent of barley'' this year, according to the report submitted last week to the U.N. Security Council.
Last year, Iraqi government granaries collected 1.2 million tons of wheat and 859,000 tons of barley.
The government has admitted that the country is facing the worst drought ever recorded. State-run newspapers said last week Irrigation Minister Mahmoud Diab al-Ahmed was scheduled to brief parliament later this month on the situation.
Before the United Nations imposed trade sanctions on Iraq for its 1990 invasion of Kuwait, Iraq imported about 70 percent of its food needs -- including at least 3 million tons of wheat, mainly from the United States and Australia.
Iraq's inability to raise hard cash to finance food imports led to serious shortages during the six years before it started exporting limited amounts of oil in exchange for food and medicine in December 1996.
The oil deal approved by the United Nations allows Iraq to sell $5.2 billion in oil each six months to purchase relief supplies.
Iraq has been using local produce for an additional food rationing program covering about 5 million low-income government employees. The government has suspended those rations, a step many see as a direct outcome of the drought.
Iraqi Official to Visit France
PARIS (AFP) -- Iraqi Foreign Ministry under-secretary Riyadh Al-Qaysi was expected in Paris Monday for talks on the nine-year-old UN sanctions imposed on Baghdad after its invasion of Kuwait, the French foreign ministry announced Friday.
His visit, part of a tour of UN Security Council member states, comes amid difficult negotiations between the five permanent members of the council on prospects for lifting the UN sanctions.
Several French diplomats were in Washington Friday to discuss differences among the permanent members on the politically-sensitive issue.
France, along with China, favors a Russian draft resolution calling for the UN oil embargo to be suspended once UN weapons inspectors resume long-term monitoring work in Iraq.
The United States, however, remains firmly opposed to any moves towards lifting the sanctions on the ground that Iraqi disarmament has not been completed.
UN resolutions stipulate that the oil embargo can only be raised when the council is satisfied that all Iraqi nuclear, chemical and biological weapons have been dismantled.
Washington backs a rival draft resolution put forward by Britain and non-permanent member the Netherlands which provides for foreign investment in Iraq if the weapons inspectors are allowed to return.
But Baghdad has repeatedly said that it would never allow the UN inspectors back on its soil as long as the sanctions remain.
Iraqi opposition asked for, US denied establishment of land banned zone in
The Iraqi opposition delegation currently visiting the US which has met with
with high-ranking officials in the US administration and legislature has called
upon the Clinton administration to give more guarantees to protect the
"Iraqi civilians" from the current Iraqi government, especially in the
southern and northern parts of the country.
Report: Iraqi Dissidents Kill 7
Wednesday, May 26, 1999; 7:03 p.m. EDT
CAIRO, Egypt (AP) -- Iraqi dissidents claimed to have killed seven security and ruling Baath Party officials last week and wounded 27 others in hit-and-run attacks, an opposition group said Wednesday.
The Iran-based Supreme Council for the Islamic Revolution in Iraq said that on May 16, its men attacked a security headquarters in the Washash district of Baghdad, killing four people and wounding six others. The attackers also destroyed two vehicles and damaged the building, the group said in a statement faxed to The Associated Press in Cairo.
Another group of SCIRI dissidents killed a member of President Saddam Hussein's ruling Baath Party and wounded 20 others who were meeting inside the party headquarters in Baghdad's posh residential area of al-Sullaikh, the group said. It did not mention when the attack took place, but said the attackers used light weapons and hand grenades.
The group also said the chief of security of the mainly Muslim Shiite district of Kadhimiya was wounded in an assassination attempt when his car came under fire on May 17. The statement identified the security chief only by his first name, Majed. It said the man's bodyguard and driver were killed in the attack.
The reports could not be independently confirmed.