Economist Articles on Iraq (8 April 2000)

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The Economist
8-14 April

 

LEADER

 

All wrong in Iraq
 
It’s time for Britain and America to rethink
 
SLOWLY, inexorably, a generation is being crushed in Iraq. Thousands are dying, thousands more are leading stunted lives, and storing up bitter hatreds for the future. No fair-minded person could doubt that the man ultimately responsible is Saddam Hussein: he could return his country to respectability tomorrow if he wished, and to relative prosperity the day after. But Mr Hussein is guileful as well as guilty, and the tormentor of Iraq has manipulated events so that the West, through its insistence on the continuance of the United Nations’ sanctions, has become the instrument of his countrymen’s torment. At some stage, the West must decide whether it is prepared to go on being used in this way. This, a moment of relative calm, presents an opportunity to reconsider a policy that is now almost ten years old.

 

The most notable success of the policy so far is that Mr Hussein has been forced to destroy most of his lethal armoury and is constrained in his ability to use the biological weapons he is surely developing. Any relaxation of the sanctions regime will almost certainly help him a bit, at least in his presumed ambitions to wage biological war. Since his record amply justifies the belief that he would, if he could, one day exploit any capability for belligerence, any gains the West might make from a change in policy must be set against the loss in letting him strengthen his armoury.

 

So is there scope for any relaxation at all? A complete lifting of all sanctions and constraints is out of the question. The aim, rather, should be to remove the burden of sanctions from Iraqis at large and direct it as much as possible at Mr Saddam and his henchmen. That is the intention behind the oil-for-food scheme, an arrangement that lets Iraq sell some of its oil, under UN supervision, in exchange for food and medicine. Unfortunately, as our article shows, it does not work. The economy is shattered, Iraqis scrabble for an ever-more-miserable living, hundreds of children die each week—and Mr Hussein is still in power.

 

Worse, he can go about most of his business, whether building palaces or making missiles, without any of the prying by the UN’s inspectors that did so much to destroy his weapons programme in the 1990s; after a split in the Security Council in 1998, and before a round of bombing, they pulled out. So, thanks to cheating and smuggling, Mr Hussein is slowly gathering his strength while his people languish and the West is blamed. That is the nub of the case for change.

 

One possible course of action would be to amend the oil-for-food scheme, making it easier for Iraq to import innocuous items needed to repair its infrastructure and oil industry, while trying to keep out the really dangerous imports and monitoring the items that may be used for benign or malign purposes. That, however, though fine in theory, has already been tried, without much success in practice. As long as the scheme exists, Mr Hussein can manipulate it to his ends.

 

So let Iraq export its own oil freely but keep the ban on all weapons-making wherewithal and check as many of Iraq’s suspicious imports as possible? The trouble with that idea is that, within Iraq’s borders, the monitors would at best be able to check on the use of approved machinery; they could not insist on entering any laboratory or other suspicious building at random. And checking imports before they entered Iraq would be laborious, and certainly not entirely effective. Meanwhile, Mr Hussein could get his hands on more money, and therefore on more components for missiles and weapons.

 

One last attempt

 

He is, however, getting those anyway, just as he is carrying on most of his activities largely uninspected. UN monitors do oversee the distribution of food and medicine and check that spare parts for the oil industry are properly used, but Iraq shows no sign being willing to readmit weapons inspectors. Under a British-American plan, accepted by the Security Council in December, a new inspection team is to present itself this month. Unfortunately, however, Iraq’s deputy prime minister, Tariq Aziz, has already condemned it as “stillborn” and “unworkable”.

 
If, against expectations, the plan succeeds, well and good. If it fails, America and Britain should continue to press for as much monitoring as possible but show themselves ready to abandon sanctions on oil sales in favour of dual-use inspections and import checks, coupled with an unequivocal warning that any evidence of cheating, let alone any threatening activity, will bring down prodigious retribution from the air. This would certainly not guarantee good behaviour from Mr Hussein. It would, however, throw the responsibility for the suffering of innocent Iraqis straight back at him.

 

If, year in, year out, the UN were systematically killing Iraqi children by air strikes, western governments would declare it intolerable, no matter how noble the intention. They should find their existing policy just as unacceptable. In democracies, the end does not justify the means.
 

 

SPECIAL
 
When sanctions don’t work
B A G H D A D 

 

Almost ten years of them have left Iraqis desperate and Saddam Hussein as defiant as ever
 
IT SEEMS a suicidal act: to climb into one of Baghdad’s ancient taxis and announce that you are an American. The odds are that the driver has lost a comfortable desk-job and is now hunting fares, in a vehicle held together with duct tape and cardboard, to make ends meet. It is likely that a close relative has died during either the Gulf war or the nine subsequent years of sanctions, or that American jets have just bombed some corner of Iraq. Your driver has no reason to love the United States.

 

Yet most of Baghdad’s taxi drivers seem more puzzled than angry. After asking for help to emigrate to Detroit, they invariably want to know how America, to their minds the embodiment of prosperity and opportunity, can wilfully reduce the people of Iraq to such misery.

 

In the corridors of the Pentagon and the State Department, American officials show equal bewilderment. After all, the villain of the piece is not America, but Saddam Hussein, Iraq’s dictatorial president. He could, they point out, bring the saga to an end tomorrow by surrendering his stash of illicit arms or accounting for their disappearance. Yet they acknowledge that the United Nations’ trade embargo, which was intended to pressure him to do so, has not had that effect. It has merely devastated the lives of ordinary Iraqis. Nor, they concede, has the humanitarian scheme that was designed to soften sanctions done as much good as had been hoped.

 

The embargo was imposed by the Security Council when the Iraqi army occupied Kuwait in 1990. It was meant to reduce Iraq to such ruin that Mr Hussein would have no choice but to withdraw his forces. Before matters got to that stage, the American-led coalition expelled Iraqi troops from Kuwait. Since Mr Hussein still possessed weapons of mass destruction, the sanctions were to be kept in place until he agreed to get rid of those weapons and show UN inspectors that he had done so.

 

Inspections were, at first, hugely successful: Mr Hussein was forced to scrap his nuclear programme. When the UN inspectors began closing in on the remains of his industrial-sized biological-weapons programme, however, Mr Hussein dug his heels in. After America and Britain bombed Iraq in 1998, he refused to readmit the inspectors or make any concession over his nastiest weapons. With the Security Council split over what to do next, the sanctions remained in place.

 

The original terms of the embargo banned all trade with Iraq and froze all Iraqi assets overseas. In theory, food and medicine were exempt; but without export earnings, Iraq could not pay for imports, so the gesture was meaningless. Trade (the sum of exports and imports) was equivalent to 44% of GDP in 1989. In 1991, according to the IMF, Iraq’s economy shrank by nearly two-thirds.

 

Even that figure understates the scale of the collapse. Every sector of the Iraqi economy depended to some extent on imports. The simplest of textile mills could not function without foreign-made parts; farmers needed imported pumps to run their irrigation systems; and the government could not mend the war-damaged telephone, electricity, road, water and sewerage networks without material from abroad. The impact of sanctions was intensified because Iraq’s infrastructure had already suffered damage and neglect during the country’s eight-year war with Iran; and because Mr Hussein, when he got money, preferred to spend it on defence and magnificence.

 

Factories and businesses began shutting down, pushing people out of work. Government employees remained on the job, but inflation reduced their salaries to a pittance. To this day, civil servants earn about 5,000 Iraqi dinars a month—$2.50 at the present exchange rate. Engineers, scientists and academics have abandoned their professions to hawk cigarettes, drive taxis or fish for a living. Prostitution and crime have increased so dramatically that the government has instituted the death penalty for pimping, solicitation and many categories of theft.

 

Every Iraqi town now boasts fleamarkets where down-at-heel members of the middle class can sell off the trappings of their former lives: dog-eared copies of Life magazine, broken transistor radios, jewellery, watches—even door knobs, plumbing fixtures and wiring stripped from their homes. Nine cars in ten have a cracked windscreen, because no one can afford to replace the glass.

 

Sanctions impinge on the lives of all Iraqis every moment of the day. In Basra, Iraq’s second city, power flickers on and off unpredictably in the hours it is available. It can take ten minutes to get a line for a local telephone call. Smoke from jerry-rigged generators and vehicles hangs over the town in a thick cloud. The tap-water causes diarrhoea, but few can afford the bottled sort. Because the sewers have broken down, pools of stinking muck have leached through to the surface all over town. That effluent, combined with pollution upstream, has killed most of the fish in the Shatt al-Arab river and has left the remainder unsafe to eat. The government can no longer spray for sand-flies or mosquitoes, so insects have proliferated, along with the diseases they carry.

 

Most of the once-elaborate array of government services have vanished. The archaeological service has taken to burying painstakingly excavated ruins for want of the proper preservative chemicals. The government-maintained irrigation and drainage network has crumbled, leaving much of Iraq’s prime agricultural land either too dry or too salty to cultivate. Sheep and cattle, no longer shielded by government vaccination programmes, have succumbed to pests and diseases by the hundreds of thousands. Many teachers in the state-run schools do not bother to show up for work any more. Those who do must teach listless, malnourished children, often without benefit of books, desks or even blackboards.

 

No sutures, no disinfectant
 

Hospitals display the effects of the embargo at their most tragic. Iraq’s health services, like its schools, were once the best in the region. Now most hospital lifts have ceased to function, so trauma patients have to be carried up and down the stairs. Cleaning staff often lack disinfectant to wash the floors. The director of Basra’s largest hospital says he must do without sutures and blood for transfusions for weeks at a time. Medicine, too, is rationed. Whole wards of children with leukaemia go unattended, since the different drugs needed to treat them are rarely available at the same time. The senior gynaecologist explains that 90% of the pregnant women he cares for are anaemic because of malnutrition. Diseases such as cholera and typhoid, which had been eradicated before 1990, have reappeared.

 

The Iraqi authorities, doubtless with an eye to the headlines, recently claimed that more than a million people had died as a result of the embargo. But the more cautious studies of foreign researchers show horrific rises in infant mortality, malnutrition and disease. An analysis of NGO health surveys conducted by Richard Garfield, a public-health expert at Columbia University, found that at least 100,000 (and probably as many as 227,000) children under five had died between 1991 and 1998 as a result of the Gulf war and sanctions. That works out at between 26 and 60 deaths every day among infants alone. A recent Unicef report estimated that, over the same period, some 500,000 under-fives had died.

 

At times, American officials have declared that such deaths are a regrettable but necessary feature of the effort to get Mr Hussein to behave. It is because he will not budge that his people have to suffer. But more often America, along with the other members of the Security Council, has acknowledged the need to relieve the burden innocent Iraqis bear for their leader’s intransigence. As early as 1991, the Security Council approved a plan to allow Iraq to export some oil in order to buy food and medicine under UN supervision. But Mr Hussein, presumably holding out for a complete lifting of sanctions, refused to co-operate for five years. So the oil-for-food scheme, as the plan is known, did not even get under way until December 1996.

 

Originally, the Security Council authorised Iraq to sell $1.32 billion-worth of oil every six months to cover humanitarian imports. Large as the sum sounds, it provided little more than a dollar a month to cover food and medicine for each Iraqi, not to mention repairs to infrastructure. The cumbersome bureaucracy imposed by the council and the inefficiency and recalcitrance of Iraqi officials made the system even less effective. Once oil started flowing, it took over three months for the first shipment of food to arrive in Iraq.

 

In 1998, faced with such obvious shortcomings, the council raised the limit on humanitarian purchases to $3.4 billion. The situation scarcely improved. Iraq’s oil pumps and pipelines had fallen into such disrepair that it could not export enough oil to meet its new allowance, despite having the world’s second-largest reserves. Although the council eventually allowed the import of spare parts to improve capacity, bringing these in proved even slower and more bureaucratic than importing food.

 

Iraq reached its export target in late 1999, thanks largely to rising oil prices. But the oil-for-food programme is not out of the woods yet. Since last December the flow of oil has fallen, at least in part because the oil-industry’s hardware has deteriorated further. At the urging of Kofi Annan, the UN secretary-general, the Security Council has just agreed to double Iraq’s budget for spare parts.

 

Even when a decent amount of money is coming in, oil-for-food does not work as well as it should. Goods take ages to get to Iraq; so far, only about half of what has been ordered has arrived (see chart). Then there are delays in distribution. The past two heads of the UN’s humanitarian mission in Iraq have resigned, along with several of their junior colleagues, complaining that the programme is hopelessly ineffective.

 

Whose fault?
 

America blames all these failures on Iraq, and with some reason. Mr Hussein has manipulated the programme, welcoming the fact that if money for food and medicine comes in from outside, he no longer needs to spend his own government’s money on such things—diverting it instead to rocket engines, or to comforts for himself and his henchmen. Under the programme, Iraqi officials place the orders: in one instance they did not bother to order nutritional supplements for children and pregnant mothers, although money had been set aside for them. Some of the items ordered (such as an MRI machine, a high-tech scanner used in medicine) are scandalous in a country that is short of aspirin and swabs.

 

However, UN officials insist that the glitches result not from malice as much as bureaucratic incompetence—and that they are sometimes deliberately misinterpreted. The State Department claims, for example, that the Iraqi regime left some $200m-worth of oil-for-food medicine simply sitting in warehouses. But the UN’s public reports clearly state that this had either just arrived, or had failed quality-control tests, or could not be used because of lack of complementary items. The Iraqi authorities held back only 15% of their usable stock as a buffer, rather than the 25% recommended by the World Health Organisation—a risky tactic, since oil-for-food is plagued by such frequent delays.

 

The State Department also cites the poor performance of the oil-for-food programme in the part of Iraq under Mr Hussein’s control, compared with its success in the Kurdish-run areas in the north of the country. American officials quote UN figures that show infant mortality declining in the north since the implementation of oil-for-food, but continuing to rise in the government’s territory. For this discrepancy, though, UN staff provide a host of reasonable explanations: the north has a healthier economy thanks to widespread smuggling, receives more aid from NGOs, gets more oil for food per person and does not depend, as the south does, on a crumbling irrigation system.

 

Even if Iraqi officials are deliberately gumming up the oil-for-food programme, so are their American and British counterparts, by abusing their power to block suspicious imports. Oil-for-food contracts worth $1.7 billion—more than 10% of all orders placed—are currently in limbo, mainly because the goods in question might be used for military rather than humanitarian purposes. There is, of course, no reason to trust Mr Hussein an inch; he would not hesitate to smuggle dual-use items through the oil-for-food scheme. But among such supposedly threatening purchases was a shipment of ambulances, held up by America for fear the armed forces might appropriate them. Many contracts for pumps, tyres and even soap remain frozen to this day. Other restrictions seem hopelessly arbitrary: spare parts allowed at one oilfield are banned at another.

 

Despite countless pleas from the secretary-general to hurry contracts along, the value of goods placed on hold has risen since the beginning of the year. Some items, such as bulldozers and crop-dusters, certainly could be put to nefarious use. But instead of banning them outright, UN officials argue, America could settle for a monitoring scheme to guard against misuse. UN inspectors already oversee the distribution of food and medicine and check to make sure that Iraq is using the spare parts for its oil industry as intended. The same system could easily be extended to other suspect items. Since Iraq foots the bill for such supervision out of its oil sales, money is no object. But America’s representatives on the Security Council are dragging their feet.

 

Gaping loopholes
 

Although, in theory, no goods should leave or enter Iraq without the Security Council’s approval, the UN has not set up machinery to monitor what crosses its borders. So the Iraqi authorities are able to ship out tankers of oil through Turkey and Iran and import what they like with the proceeds, unhindered by committees or inspectors of any kind. For every legitimate load entering Iraq from Turkey, as many as 200 pass without permission. This clandestine trade may not be enough to raise the living standards of ordinary Iraqis, but it certainly puts soap and tyres within Mr Hussein’s reach, not to mention more luxurious or sinister items.

Indeed, while his country is in desperate straits, Mr Hussein shows no eagerness to spend on his own people the money he gets from illicit oil exports. Instead, he has built several new palaces for himself. He has also acquired, for his police force, a fleet of spanking new Hyundai patrol cars that certainly did not come in under oil-for-food. Friends of the regime have plenty of money to spend on computers with the latest Pentium III chips, which are sold at prohibitive prices in several shops in Baghdad. Yet, under sanctions, no computers with a Pentium chip of any sort may be imported for Iraqi schools lest they fall into the army’s hands.

 

American ships try to intercept the tankers that spirit out Iraqi oil through the Gulf. But the United States has made no attempt to stop the illegal trade with Turkey, in the hope of assuaging Turkish misgivings about America’s policy on Iraq. Indeed, to Turkey’s great satisfaction, the Security Council recently scrapped an Anglo-Dutch scheme to close this loophole. How can such nonchalance about what actually enters Iraq be squared with such zeal to dissect each contract that passes through the UN’s sanctions committee?

 

America has also resisted changes to the regulations that would allow the UN to spend cash in Iraq. At the moment, all oil-for-food goods come from outside the country, to avoid putting money in Mr Hussein’s hands. But that also means that UN food imports, for example, undercut Iraqi farmers, driving many of them to abandon their fields and so exacerbating the shortage of food. The UN also cannot spend money training Iraqi doctors or teachers—an obstacle no amount of imported medicines or textbooks can make up for.

 

To the extent that it works, the oil-for-food scheme has turned Iraq into a massive welfare scheme. The UN supervises the pumping of Iraq’s oil and the distribution of the proceeds, while suspending all other economic activity. Even with limitless resources and no interference from outside, a bunch of UN bureaucrats is no substitute for a working economy.

 

The programme has worked, up to a point. It has stopped Iraqis starving to death or succumbing to epidemics. To improve the humanitarian situation beyond that basic level, oil-for-food’s administrators have had to begin the much more controversial work of repairing Iraq’s infrastructure. That has brought them into conflict not only with the more hawkish members of the Security Council, but also with the very aim of the embargo. The UN’s own sanctions regime runs counter to the UN’s humanitarian programme to rebuild Iraq.

 

As Hans von Sponeck, the just-departed head of the UN’s humanitarian programme in Iraq, points out, the basic problem lies with tying ordinary Iraqis’ well-being to questions of disarmament. The Security Council has implicitly acknowledged the injustice of that link by creating the oil-for-food programme to mitigate its worst effects.

 

Sanctions remain the world’s only leverage over a ruthless and bellicose tyrant. Yet almost ten years into the embargo, they have not budged him. Instead of clinging to the forlorn hope that Mr Hussein will live up to his legal and moral responsibilities, perhaps America and Britain need to rethink a policy that has so embittered and impoverished his people.

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