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News for 19 June '00 to 25 June '00

Hello all:

Please note CASI's latest occasional briefing (in .pdf format) which can be
accessed from CASI's home page at:

Alternatively, you can download it directly from:

It's designed to help MPs prepare for Thursday's debate in the Commons.



News for 19 June '00 to 25 June '00

 Sources: AFP, AP, Forbes, Independent, National Post, Newsday, Reuters,
San Francisco Chronicle, Sydney Morning Herald, Wall Street Journal

 Italian Parliament Calls for Lifting of Iraq Sanctions (AFP)
 Iraq Has Sold Crude Worth Over 29 Billion Dollars Since December 1996
 Sanctions Could Keep Inspectors Out of Baghdad (Independent)
 Butler Fears Saddam Has Used Black-Out to Build Arms (Independent)
 Crude Facts -- Saddam is Winning Control of The Oil Markets (Wall Street
 That Was no War, it Was Homicide -- And Still Iraqis Die (Sydney Morning
 How Dictators Manage Their Billions (Forbes)
 One Family's Daily Despair (Newsday)
 Fatter in Lean Times -- Iraqi Elite Gets Richer From Illegal Smuggling
Ignored by U.S. (Newsday)
 Survival of Innocents -- How Iraqi Children Cope With Poverty and
Homelessness (Newsday)
 Rebuilding on Ruins -- Kurds Reclaim Homes Lost in War, But Iraq Still a
Threat (Newsday)
 US Top General Blames Saddam For Civilian Losses in Air Strikes (AFP)
 UN Urges Iraq on Kuwaiti Property (AP)
 Missing Kuwaitis Inquiry to Continue Without Iraq (Reuters)

Only links provided for the following reports:

 The West's Forgotten Conflict (Independent)
 In Iraqi Countryside, Allies' Forgotten War Inflicting Deep Wounds
Innocent Civilians Routinely Killed in Retaliatory Strikes (San Francisco
 Iraq Says Accepts New Oil Deal With U.N. (Reuters)
 The Man From UNSCOM Has a New Mission (San Francisco Chronicle)
 Iraq May Never Repay War Debt, Experts Say (National Post)
 Iran Says Forces Kill Seven Rebels on Iraq Border (Reuters)
 Iraq Says Iran Behind Bungled Car Bomb Attack (Reuters

 One Family's Daily Despair, Newsday, 18 June '00


Baghdad -- The washing machine sat in front of the rows of white plastic
chairs at the Sabalkh auction house. It was 10 years old, was made in China
and had a Japanese engine. Sometimes it broke down and when it did, Raed
Mohammed Abdul-Razak would fix it himself. He bought it three years ago. At
that point, the washing machine was already seven years old.

It was the last thing of any value Abdul-Razak owned and now he wanted to
get $40 for it at the Friday morning auction or he was finished. And so was
his uncle. And their families.

"Yesterday the landlord started to say he's going to lose his patience,"
Abdul-Razak said.

That's the landlord of the shop Abdul-Razak rented. Until recently,
Abdul-Razak sold stationery there but now that school was over for the
semester and demand for notebooks and pencils had dried up, he wanted to
turn the shop into a juice bar with his uncle, Hassan Abdul-Razak. But they
were already 18 days late on the rent for the month and their only chance at
continuing in business, in finding a few dinars to survive on, sat a few
yards away on the concrete floor waiting for a bidder.

>From different generations-Hassan is 45, Raed 26-the two men have
experienced the eradicating impact of the 10-year-old United Nations trade
sanctions on Iraq's formerly huge middle class at different stages in their
lives. A decade ago, Hassan had it all. Raed was a teenager without a care
in a country that has the second biggest oil reserves in the world. Until
the sanctions were imposed, the government made sure that its many employees
were paid well, that the country's health care and education systems worked
well, and that private businessmen could run small enterprises like Hassan's
tea shop. Baghdad used to be full of Egyptians, Filipinos and Indians
serving tea and cleaning offices and opening hotel doors for Iraqis. Now the
capital is full of Iraqi engineers who drive beaten up taxis, teachers who
sell car parts on the sidewalk and small businessmen who show up at the
numerous Friday auctions to sell their ropey settees and tired air
conditioners so they can pay their rent.

"The embargo has made this kind of business flourish," said Nazar Rashid Al
Sabalkh, the owner of the auction house. When the sanctions started, there
were four or five houses in town. Now there are more than 50.

Hassan, Raed and Hassan's 16-year-old son Ali came to Sabalkh's warehouse at
9:30 a.m. on May 19. For the second day running, a storm of russet dust
spiraled around Baghdad, floated in people's eyes and lungs, and formed a
film coating everything.

"I used to have a tea shop before the embargo," Hassan said, as he sat on a
white chair and waited for the auction to start. "Then, the tea bags were
cheap, the rent was cheap, the furniture, the salaries. After the embargo
all the costs went up. I worked day and night and ended up with very little.
I surrendered." He closed his tea shop, Casino Al Salaam, in 1991. Since
then he's been buying and selling just about anything he could work a deal
on. He and his wife have four children and the family has moved into a tiny
apartment. They survive off the food ration the government doles out to all
Iraqis each month. It's paid for by the money generated by the Oil for Food
program, which is monitored by the United Nations.

Hassan had his livelihood snatched away from him. His nephew Raed was
deprived of his future.

"I didn't think about the future because it was so safe," he said. Instead,
his teacher father paid for Raed's tae kwon do lessons, his pocket money,
his school books. And then the embargo started and Raed had to leave school
at 17 to help support the family. Now he has a wife and three children of
his own.

His wife had never in her life had to wash clothes by hand.

At noon, the auction started. The auctioneer, a round man in denim, held up
clocks, a cassette player, a Casio keyboard and he took a few bids here and
there for the equivalent of a dollar or two. Hassan, Ali and Raed sat
silently in their chairs.

"One washing machine," the auctioneer called out. "Do I hear 50,000 dinars
?" Silence, but for the dusty wind.

And that was it. Raed and Hassan walked out of the auction area and sat on
the couch of someone else in need of money.

Disappointment tied Raed's tongue and he stared out into the dust.

"Now I'm going to sell it in the street," Hassan said. "We'll never go home
until we sell it. My wife needs money, she needs food. I am responsible for

 Fatter in Lean Times -- Iraqi Elite Gets Richer From Illegal Smuggling
Ignored by U.S., Newsday, 19 June '00


Baghdad -- Back in 1990, before the sanctions started, Youssef Ahmed was the
only game in town. Now he has seven competitors, all angling for the
business of building private luxury pools in Baghdad.

In the first three months of this year, the Baghdad stock exchange index
rose more than 75 percent.

Behind three-meter-high walls in a part of central Baghdad, work finished
last year on a presidential palace the size of a small town.

Houses sell for the equivalent of a million dollars in the wealthy

Refrigerators, air conditioners, microwaves and all sorts of cheap
electronic goods from Korea fill dozens of shops all over the city. This is
the other side of the United Nations sanctions in Iraq.

As innocent babies die at unprecedented levels in part because of an
infrastructure crumbling under the weight of sanctions imposed in 1990, the
embargo on Iraq has also enriched a small cadre of Iraqi
businessmen-smugglers including, Newsday has learned, the immediate family
of Iraqi dictator Saddam Hussein, trading through a company called Asia. The
massive smuggling-some estimates reach $1 billion a year-is taking place
almost unhindered, with the acquiescence of the embargo's biggest proponent,
the United States, which has been loath to object because several
neighboring countries involved in the smuggling are U.S. allies.

"In the 1990s a new class of people was created," said Ahmed, explaining the
surge in demand for private pools. "Those people started building modern
houses...After the embargo started, the merchants and smugglers and traders,
their activities flourished more than before. Before, the government
provided our goods. Now smugglers and merchants do that." "The president and
his men are getting stronger and stronger," one diplomat said. "Look at [the
wealthy neighborhoods of] Arasat and Mansour. Look at the cars. Most people
are driving clunkers but every week I go down there and there are more
Mercedes and not just your baby Mercs but big S classes. These people are
getting richer and richer." In order to appease allies in the region, the
United States and its allies elsewhere make little effort to stem much of
this illegal trade, many diplomats and politicians in Iraq and analysts in
the United States say. American naval vessels patrol the Persian Gulf
looking for smugglers of oil and other goods.

But on none of Iraq's borders does any country strictly enforce the embargo.

Several diplomats and UN officials say the United States and its key allies
turn a "blind eye" to Hussein's illegal trade, as shown by the long line of
trucks that cross at the Turkish border in Kurdish-controlled northern Iraq
24 hours a day.

"I brought in one ton of potatoes and I'm taking out 5,000 liters of
diesel," said Suleiman Mohammed Ali, 41, a Turkish Kurd who was waiting with
his truck at the Iraqi-Turkish border crossing on a recent evening. In front
and behind his truck were hundreds of others, all illegally carrying Iraqi
diesel, which the Kurdish authorities tax before allowing it to leave the

"The diesel goes to the Turkish government at a station across the valley
there," said Ali, who had slept in his cab for four days on this trip. "It
takes the oil and distributes it around Turkey." And where did the oil come
from? "This is Saddam Hussein's oil," Ali said.

According to diplomats and officials in Iraq, the United States has applied
no pressure on Turkey to curtail the trade, which boosts the economy of
southeastern Turkey and so provides stability to a region whose Kurdish
population has often rebelled against the government. On the Iraqi side,
most of the revenue goes to Hussein and to the Kurdish authorities who
currently control northern Iraq.

"Why do the Americans tolerate the trade?" said one Middle Eastern diplomat
here. "Because it creates revenue for the Kurds, not because they like the
Turks. It's one of the pillars of their foreign policy, to keep Saddam
limping, to keep him on his toes." A State Department official acknowledged
this was one reason why the trade continues: "The Kurds are getting a lot of
money through the oil trade and we like the Kurds." The United States also
tolerates the trade because it needs to use Incirlik, a Turkish base, to
operate its flights to maintain two no-fly zones over Iraq, said a Turkish
official. "If they say we must shut this door and have no contact with Iraq,
we would say OK, and now we'll discuss our entire relationship with the U.S.
Our cooperation is a package deal," he said.

The State Department official said the United States is trying to address
the illegal oil sales. "This trade is an issue of concern," the official
said. "To suggest that we tolerate it is not accurate. It's something we're
working on with the Turks to address. It's not an easy problem to solve."
Iraqi politicians are unabashed about the government's policy of conducting
illegal trade. "I am not going to allow myself to be choked to death simply
for a resolution that has no legitimacy," said Riyadh Al Qaysi, Iraq's
deputy minister of foreign affairs. "Every opportunity I get to survive I
will certainly take. In fact, I am duty bound to take it." A large
percentage of Iraq's illegal trade in oil and other goods is controlled by
Asia, Newsday learned from diplomatic and political sources in Iraq. The
company, owned by the Hussein family, manages the bulk of illegal trade with
neighboring nations.

Two sources separately said that the Kurdish party that controls the border
with Turkey is a partner with the Baghdad-based Asia, even though that
party, the Democratic Party of Kurdistan, claims to be an enemy of the Iraqi
government. Asia has an office in the DPK-controlled town of Zakho, one
Western diplomat said, and may have offices in neighboring countries like
Turkey and Jordan.

"Asia, it's the biggest racket here," the diplomat said. "It's a brokerage
company that trades between Turkey, Iraq, Iran and Syria." Other Iraqi
business owners are not shy to say how they get their goods. As he talked
about his work, Ahmed the pool contractor glanced down at the tiles, pumps
and other materials he needs to build pools lying on the floor. They were
from Germany, Lebanon, Italy, Spain, Britain and elsewhere.

"I started to go through Dubai and Jordan as transshipment points because of
the embargo," he said.

Across town, Faris Al-Hadi was also happy to explain how his Samsung
dealership manages to skirt the sanctions. From a well-known Baghdad family,
Al-Hadi is as respectable a businessman as they come. In the years before
the sanctions, Al-Hadi and his father had many business interests and were
agents for well-known Western watches, radios, typewriters, pens. Al-Hadi
owned a successful flower shop and a big nursery and factories for
retreading tires and processing nuts. He also owned a photo-developing lab
and a computer consulting group.

When the sanctions started, he said, "everything was messed up totally."
After the Gulf War, Al-Hadi began to nurture a relationship with the Korean
electronic goods manufacturer, Samsung, and together with a partner he
formed his current company, Qareeb Trading Agency. Two years ago he and
Samsung struck a deal. Al-Hadi would import some Samsung goods to Dubai, in
the United Arab Emirates south of Iraq on the Persian Gulf. Others would go
through a transfer company in Jordan and then across the Iraqi desert in
trucks to Baghdad.

Samsung's "concern was, 'we are afraid of the UN and the U.S.'-that they
might consider any direct dealing with Iraq as breaching the sanctions,"
Al-Hadi said.

James Chung, a spokesman for Samsung Electronics in Seoul, acknowledged that
Samsung goods are sold in Iraq. "We have sales offices in Amman and Saudi
Arabia but we don't have an official office in Iraq," he said. "Many local
distributors can get Samsung Electronics goods around the countries near
Iraq and they import these products through various channels and sell our
products in Baghdad." Chung said the company complies with the sanctions.
"Samsung Electronics wants to negotiate with the local distributors directly
but it is not possible because Iraq is under UN sanctions," he said. "So we
cannot make official relations with any distributor in Iraq. We are not
making any gains through sale of our products there." As an experienced and
upfront businessman, Al-Hadi finds it demeaning to have to import his goods
in this roundabout way. "It's almost like smuggling, you know?" he said.
According to international law, it is smuggling.

It's a perilous way to run a business. Once, one of the small boats his
company hires to bring the goods from Dubai caught fire and $60,000 worth of
music tapes were destroyed. Another time, a boat was caught by one of the
U.S. warships that sail the Gulf and act as the only physical deterrent to
smuggling on Iraq's perimeter. The boat was held for six weeks and fined.

But usually, the boats face no problems in the Gulf. "These boats are not in
international waters," Al-Hadi said. Those ships pass through the waters of
Saudi Arabia, Qatar and Kuwait with those governments' apparent knowledge.

"They are very close to the shore. They know when they can sail and when to
stop. They know what they're doing. They're smugglers." Business under these
conditions is difficult but Al-Hadi is doing well. Last year he had sales
worth $2 million. This year he expects that to double. But it's nothing
compared to the success of his businesses pre-embargo.

Samsung, which has heavy competition in Iraq, likes to be sure its products
are marketed properly, Al-Hadi said. "We receive a lot of Samsung staff," he

"They visit Iraq and check the market share and do a lot of work and see
their products here." Chung acknowledged that Samsung employes visit
Baghdad. "We hope to make some good relationship with Iraq after the
sanctions," he said. "It's possible that an employee met Mr. Al-Hadi some
day but that does not directly mean there is an official connection with
Samsung Electronics." Unashamed of the way he does business, Al-Hadi
nevertheless has harsh words for some Iraqi businessmen who he says have
taken advantage of the basic needs of the Iraqi people to make a fast buck.
This is the new, pool-building class that are Ahmed's clients.

"They are mainly engaged in the food business, the smuggling business in
general," he said. "They bring in low quality goods and the purchasing power
of people is very low so people buy this food. They cheat. Some food items
imported are expired or branded with a brand that's not true. You can see
Pepsi Cola in the marketplace from five different sources." In fact, Pepsi
is one of the 98 companies traded on the Baghdad stock exchange.

"Not the real Pepsi," noted Sabih Al-Dulaimi, director general of the

Al-Dulaimi echoed Al-Hadi in his explanation of the new wealthy class in

"It's a kind of exploitation of the situation," he said, noting that all of
the 98 companies on the exchange import goods illegally and are encouraged
to do so by the government. "We're still in a war. In a war, many people go
up and a lot go down."

 UN Urges Iraq on Kuwaiti Property, AP, 19 June '00

By Edith M. Lederer
Associated Press Writer

UNITED NATIONS -- The Security Council urged Iraq Monday to return property
seized from Kuwait after its 1990 invasion and account for hundreds of
missing people, adding its weight to a similar demand from Secretary-General
Kofi Annan.

A council statement issued after a briefing by retired Russian ambassador
Yuli Vorontsov, who was appointed by Annan in February to try to resolve the
Kuwait-related issues left over from the 1991 Gulf War, stressed "the
importance of dialogue among parties."

A report last Thursday by Annan on missing Kuwaiti property called for
"understanding and goodwill" from Iraq in returning government archives,
museum pieces and military equipment.

The council said it agreed with Annan's conclusion "that understanding and
goodwill are of critical importance for the success of Mr. Vorontsov's

Iraq has withdrawn from an international committee set up to look into the
issue of persons who have been missing since the Gulf war. Baghdad claims
that the committee, which is scheduled to meet again in Geneva on June 21,
has not applied enough pressure on Kuwait.

. . . . .

The Security Council urged Iraq "to cooperate to ensure the repatriation or
the return of all Kuwaiti and third country nationals or their remains."

The council also echoed Annan's report last week that Iraq has returned "a
substantial quantity of property" but it still has an obligation to return
"many items, of fundamental importance for Kuwait"

Annan noted that in December 1998, his special envoy in Baghdad, Prakash
Shah, was told by Iraq's Deputy Prime Minister Tariq Aziz that the property
issue was not a major one and could be easily settled.

At a summit of developing nations in Havana, Cuba, in April, Annan said he
urged Iraq's Foreign Minister Mohammed Saeed al-Sahhaf to cooperate on the
return of Kuwaiti property and archives, and was told the issue should be
addressed under the 1991 Security Council resolution that ended the Gulf

The secretary-general said Vorontsov is prepared to go to Baghdad at the
earliest opportunity to facilitate the return to Kuwait of several small
items Iraq reported finding in local markets in 1997 and 1998, including a
green leather bag, a revolver, a hunting rifle and several decorated dishes.

 Iraq Has Sold Crude Worth Over 29 Billion Dollars Since December 1996,
AFP, 20 June '00

BAGHDAD -- Iraq has exported crude oil earning more than 29 billion dollars,
representing more than 1.8 billion barrels, since the start of the oil for
food programme at the end of 1996, the United Nations said.

"Since the inception of the (oil for food) programme on December 10 1996,
Iraq has exported nearly 1.845 billion barrels with a value of 29.36 billion
dollars," the UN office in Baghdad said.

"During the period June 10 to 16 Iraq exported 13.9 million barrels of oil
for revenue estimated around 342 million dollars," it added, referring to
the start of phase eight of the programme, which is aimed at easing the
effects of the embargo imposed on Iraq since 1990.

. . . . .

Iraqi Foreign Minister Mohamed Said al-Sahhaf said the country has accepted
the latest renewal of the six-month UN oil-for-food programme, according to
an Iraqi newspaper Tuesday.

"The renewal (of the programme) on each occasion is a matter of routine
which is accepted by both sides (Iraq and the UN), given that we have been
subjected to an embargo" since 1990, said Sahhaf, according to the Iraqi
weekly al-Rafidain.

"When the eighth stage of the programme takes effect, the Iraqi government
will seek to use the Iraqi funds (resulting from sales of crude), which are
not a gift, to answer the needs of the population in various areas," the
Iraqi minister added.

. . . . .

 Survival of Innocents -- How Iraqi Children Cope With Poverty and
Homelessness, Newsday, 20 June '00


Basra, Iraq -- School is over for Mohammed Al Ramahi-for good. From now on,
he's going to be selling vegetables in the market.

"There's no use going to school," said Mohammed, 13, who this month
completed what his father has decided will be the boy's last year of formal
education. "Life is so hard and I have to help my father. I don't feel so
happy about it but I must help." Mohammed stood behind a row of cucumbers at
his father's stall, his body language confident and adult, his voice still
unbroken. His father, Karim Al Ramahi, appeared out of the shopping crowd
and explained why he had taken his son out of school.

"I appreciate that learning is very important and he's still a kid but
things are so tough," said the father of five. "The embargo has created a
real crisis so everyone has to do his best to get through. I have to take
care of my family or they'll collapse." Mohammed is part of a generation of
young Iraqis who have grown up in a decade of increasing poverty and
continuing economic sanctions. Many his age are dropping out of school to
start work before they have started to shave. In Basra, Iraq's second
largest city and a place of perhaps unparalleled poverty in this formerly
wealthy country, there are many children like Mohammed. All over the town's
souk, or market, young boys push large barrows of potatoes or flour. They
call out the prices of car parts from stalls. They offer shoeshines. For the
first time in people's memory, children are sleeping on the streets of the
capital, Baghdad. The kids who do stay in school, teachers and aid workers
say, are becoming increasingly apathetic, hopeless and bitter about the
outside world that the children blame for their loss of opportunities and

Some aid workers and diplomats are worried that the Western countries like
the United States and Britain that insist on continuing the decade-old
embargo are helping to create a generation that is demoralized,
under-educated and developing a hatred of the West.

"If you look at the possibility of a whole generation not feeling that their
hopes and aspirations can be met, combined with this situation of isolation
by the international community and feeling to a great extent that the rest
of the world is responsible, you have to look at the ramifications for
peace," said Anupama Rao Singh, the head of the United Nation's children's
organization, UNICEF, in Iraq.

Abdul Razak Hashemi, a minister in the Iraqi government, was less
diplomatic: "God help the West for the hate growing up in Iraqi children." A
State Department official, who spoke on condition of anonymity, acknowledged
that the United States government is aware of the hostility to the West
among the younger generation in Iraq but said it is not a top priority.

"At this point, it's not a war for the hearts and minds," the official said.

"It's a question of the security of the region. At this point it's not a
popularity contest." Young Iraqis, the official said, are bound to feel
hostility toward the United States and its allies because the people of Iraq
do not have access to free information and are susceptible to President
Saddam Hussein's propaganda.

For many young people, however, daily survival is life's main concern.

It was past midnight on a recent night and the platforms of Baghdad's bus
station were dark and punctuated by the bodies of sleeping men. By the bare
electric light bulbs of the food stands that stay open all night, a boy sat
behind his shoe-shine box.

He can't read or write. Behind his bony chest are lungs that struggle with
asthma. His mother is long dead. He's a sweet boy, polite and a little
nervous and usually hungry. He left home more than a year ago because his
stepmother wanted him to beg in the streets and he hasn't been back since.

"Sometimes I sleep here," said the boy, Ibrahim, 15. "Well, every day."
Ibrahim makes 1,000 dinars, or 50 cents in a day, sometimes a quarter. What
he makes he has to split with the man who actually owns the box full of
brushes, rags and polish. He's a nice man, Ibrahim said. No one in the bus
station, the regulars, takes advantage of him. Even the police are

"Sometimes they even offer me food," he said.

Ibrahim is part of a growing number of homeless children in Baghdad, a fact
that the government is highly sensitive about. Although the government
minder who accompanies foreign journalists everywhere was quite willing to
take a journalist to see dying babies in Iraqi hospitals, it took several
days for Newsday to gain permission to interview homeless children. Requests
for access to Baghdad's only center for homeless children, Dar Al Rahma
(House of Mercy), were denied.

And the reason for the sensitivity is this: Iraqis, people with a history of
extended family responsibility and extensive government social welfare
programs, are simply embarrassed that families and society at large can no
longer guarantee a home for every Iraqi child. While dying children is a
crime against Iraq, to many Iraqis, the existence of homeless children is a
stain on the national honor.

Officials from the Iraqi Ministry of Labor and Social Affairs did not
respond to requests for interviews, but Singh said the Iraqi government is
beginning to address the problem.

"It's one of the areas we've had a lot of forward movement in the last two
years," she said. "Two or three years ago they weren't willing to discuss
the issue." Some are critical of the progress. According to aid workers who
have been there, the 18-month-old Dar Al Rahma center resembles a prison
more than a haven for homeless children. Armed guards surround the building,
which the children cannot leave. Street kids are mixed inside with young

There are no social workers to help the roughly 75 children inside-only a
sociologist and a psychologist. Still, inside the center the children can go
to school and learn crafts like carpentry, so things are getting better, aid
workers said.

But the news has spread on the streets that Dar Al Rahma is best avoided.

When the police do speak to Ibrahim, they tell him he should go home or find
the center. Home is where his drunken father and abusive stepmother are.

He won't go back there. And he said he hasn't made it to the center because
"I don't know the address." An Iraqi man listening to the conversation had
his own interpretation. "He knows where it is," the man said. "He just
doesn't want to go there." What are Ibrahim's dreams? An end to the
sanctions perhaps? A change of government in Iraq? "I hope one day I'll have
at least enough clothes and pocket money to survive," he said. "And I would
like to go to school." Some young Iraqis are more politically aware and have
complex, conflicted views of the West. They are bitter at what they perceive
as an unjust economic stranglehold that countries like the United States and
Britain support and yet they are attracted to the fruits and freedoms of the

Fahed Yousser Hamoud is 19 and hopes to go to medical school in September.

He lives in the old city of Basra, once a neighborhood of elegant homes and
canals that Iraqis called their Venice. Most of the houses are now on their
last legs and the canals are dried-up dribbles of sewage and trash.

On a recent afternoon, Hamoud was walking home after finishing his final
exams at high school. Many of his friends have dropped out of school,
knowing they can make more money in the souk or driving cabs than they could
as doctors or engineers. Hamoud is determined to push ahead with his
studies, hoping that by the time he is a fully qualified doctor, in eight
years, the sanctions might be over.

One of the things Hamoud most wants is access to the Internet-illegal in
Hussein's Iraq.

His Chicago Bulls T-shirt and Phoenix Suns baseball cap give a clue to the
country in the world he would most like to visit. "I would love to go to
America," he said. "I would love to see the countryside there. And Michael
Jordan." Even so, Hamoud strongly opposes the U.S.-backed sanctions against

"It's no use continuing the embargo on people," he said. "It's a crime to
join politics and this campaign against innocent people. It will just create

 US Top General Blames Saddam For Civilian Losses in Air Strikes, AFP, 20
June '00

ABU DHABI -- The commander of US forces in the Gulf, General Anthony Zinni,
blamed Iraq's President Saddam Hussein on Tuesday for any civilian
casualties in the almost daily US and British air strikes on his country.

"The Iraqis have made false claims. They fire at our planes indiscriminately
not caring where their own rounds go," said Zinni, who is on a farewell tour
of the Gulf two weeks before retirement.

He charged that Saddam was to blame for any civilian losses because Iraq's
air defences were being deployed around populated areas.

"We do not try to engage those kinds of targets that are around populated
areas," Zinni told a press conference in the Emirati capital. "We go out of
our way to ensure there is no civilian casualties or damage."

But according to Baghdad, a total of 299 people have been killed and 889
injured -- mainly civilians -- in US and British strikes since the two
allies waged an air war on Iraq in December 1998.

Iraqi artillery gunners clash regularly with US and British warplanes which
enforce "no-fly" zones in the north and south of Iraq, without any
casualties or damage reported on the side of the Western partners.

Zinni disputed the Iraqi toll.

"I don't accept that casualties are mainly civilian ... That is an
allegation that the Iraqis have made. It has not been validated," said
Zinni, chief of the US Central Command since 1997 and who directed the
"Desert Fox" air war in 1998.

He also insisted that US warplanes on patrol "do not ever engage the Iraqis
unless they fire at us".

. . . . .

Zinni also reasserted his opposition to a lifting of sanctions against Iraq,
which has been under UN embargo since its 1990 invasion of Kuwait, and held
Saddam responsible for the hardships of the Iraqi population of 22 million.

"I think someone like Saddam would use that (lifting of sanctions) to
rebuild his military," he said.

The US general, who has been decorated with medals on his Gulf tour, charged
that Saddam was denying his own people of aid under a UN humanitarian
programme and revenues from gasoil smuggled through Gulf waters.

"He could feed them now," said Zinni.

Turning to Iran, the Marine Corps general said it had earlier this year
started to deny access through its waters to sanctions-busting ships but
added that the current situation was not clear.

"Sometimes they do, sometimes they don't," he said. "We are not sure what's
happening now ... We are seeing ships again using Iranian waters."

 Missing Kuwaitis Inquiry to Continue Without Iraq, Reuters, 20 June '00

GENEVA -- Iraq will likely boycott a meeting in Geneva on Wednesday to try
to clarify the fate of some 610 Kuwaitis missing since Iraq's invasion of
Kuwait, its organisers said on Tuesday.

The International Committee of the Red Cross (ICRC) will host the meeting,
but only Kuwait and members of the U.S.-led Gulf War coalition (the United
States, Britain, France) are due to attend, they added.

Diplomats said that no substantive progress has been made since Iraq began
shunning the tripartite committee talks in February 1999, although the
Swiss-run ICRC continues to meet separately with an Iraqi delegation.

"Consultations will be held on Wednesday, but Iraq will not take part as its
position is the same. It will not participate in meetings as long as
countries which do not have missing persons take part," an ICRC spokeswoman
told Reuters.

"As long as there are people still missing, we will try to mobilise the
parties so things move ahead," she added. "Families have a right to
know...This is a humanitarian issue."

A Saudi diplomat told Reuters: "This is the fifth tripartite committee
meeting in a row in which Iraq has not participated."

The missing include about 24 Saudi nationals unaccounted for since the 1990
invasion and seven-month occupation.

Iraq, which says it has no Kuwaiti or Saudi prisoners, also claims that
1,150 Iraqis went missing during the period.

. . . . .

"Our hope is that Ambassador Vorontsov will be in a position to go to
Baghdad and the sooner the better. This is an important issue and the
Council is unanimous...that Iraq should cooperate," French ambassador
Jean-David Levitte, this month's Council president, told reporters in New
York on Monday.

 Italian Parliament Calls for Lifting of Iraq Sanctions, AFP, 21 June '00

ROME -- Italy's lower house of parliament on Wednesday called for a UN
embargo against Iraq, imposed after its 1990 invasion of Kuwait, to be

A parliament motion, backed by 302 deputies -- among them communists and the
Greens party as well as right-wing opposition deputies -- created a rift
between governing parties and the government but also among the opposition.

Ninety-five legislators voted against the motion presented by the last
leader of Italy's old communist party, Achille Occhetto, while 55 abstained.

It called on Prime Minister Giuliano Amato's center-left government to act
within the framework of the United Nations so sanctions can be lifted and
frozen Iraqi assets be unblocked.

The Italian embassy in Baghdad should be reopened by the end of the year and
a "sanitary airlift" be set up.

During the parliament debate, post-fascist deputy Alberto Simeone said Iraq
was "not this devilish regime as pictured by the official press but a regime
in which religious tolerance and therefore great democracy exist."

 Rebuilding on Ruins -- Kurds Reclaim Homes Lost in War, But Iraq Still a
Threat, Newsday, 21 June '00


Northern Iraq-"If we went over there, they would slice us in half," Lt.
Abboud said as he stared at the checkpoint a kilometer up the road. An Iraqi
army officer, Abboud stood at his roadblock looking north into a part of his
homeland he can no longer visit.

It was the pleasant beginning of a warm night, and he could see the green
mountains of the north and the evening lights of Kurdish villages and cars
traveling along single-track roads. Above the plain and the distant
mountains, the clouds turned quickly from purple to dark blue. Abboud had a
fine, broad view of a piece of sovereign Iraq that has not been under
President Saddam Hussein's control for nearly a decade.

The 3.5 million Kurds in the region have a name for the land of cool breezes
and oddly shaped mountains that Abboud looked out on. They call it
Kurdistan. The UN, on the other hand, calls it Northern Iraq. The government
of Iraq calls it Iraq.

Largely forgotten since the end of the Gulf War, when Hussein put down a
Kurdish rebellion and caused a million Kurds to flee into the Turkish
mountains, Northern Iraq has since become an unofficial but highly
precarious state within a state.

It was in late 1991 that the Iraqi army and government apparatus pulled out
of the region, leaving Iraq's northern garden in the hands of two
heavily-armed rival Kurdish parties and under the impermanent protection of
the United States and its allies. Aid workers poured into the region once
the Iraqi army and allied troops left. UN agencies took over the
revitalization of the region on behalf of the Iraqi government in 1997 after
the inception of the Oil for Food program in late 1996. What remains now is
a land whose future is hostage to the whims and political calculations of
many players: Hussein, Kurdish leaders, the UN, Iran, Turkey and the United
States and its allies.

For the people of the region, their greatest fear is that Hussein and his
troops will regain control of the region.

In the tiny village of Ashawa, only 25 families of the 170 who were cleared
out on a Friday in the spring of 1987 by uniformed Iraqi soldiers and their
yellow bulldozers have so far returned. Many still live in temporary camps
and in apartments in the nearby town of Dohuk.

Those who have returned are haunted by the memories of the day the Iraqi
president's men showed up at noon to tell them their boss had decided to
build one of his palaces where their homes then stood.

"I will never forget that feeling," said Ashrafi Suleiman, 50, who sat with
her daughter one recent afternoon making dozens of flat circles of
unleavened bread over a fire. One of Hussein's roughly 20 presidential
palaces stood 20 yards away, now a shell of a building full of rubble. The
shed that gave her shelter from the midday sun was built from Hussein's fine

"At that time, I had only one cow and no money," she said, as hot air
bubbled the thin, browning dough. "I had to sell that cow to get flour for
my kids. That's what Saddam Hussein wanted for us. We are still afraid that
maybe he will come back." As Suleiman spoke and helped prepare her family's
food for the day, the men of the village were down the road starting work on
the foundations of a mosque.

They plan to build it with manila sandstone blocks from another of Hussein's
palaces that sit in heaps of rubble. When they came back to Ashawa, the
villagers blew up the palaces with dynamite, shattering the president's
bedrooms and splintering the elaborate Moroccan plasterwork that adorned his
dining room.

"It's a sort of revenge because Saddam Hussein destroyed our village and
made us refugees for 11 years and occupied all our land," said a neighbor of
Suleiman's, Musla Ali Ibrahim, 27. He had put down the pickax he had been
swinging into the ground of Northern Iraq. "When we came back, we wanted to
destroy all the things Saddam left behind." Building in the ruins of
Hussein's palaces, Iraq's Kurds live with the knowledge that their fragile
peace and relative freedom could be over in a day.

"I am 99 percent sure that Saddam Hussein will not come back to the region,"
Ibrahim said, "because there are some decision-makers including the
Americans who will protect us." Ibrahim is banking his future on a promise
the American government has never directly made. The United States, from the
Incirlik airbase in Turkey, enforces a no-fly zone in Northern Iraq,
designed to protect the Kurds from Hussein's air force, but Iraqi ground
forces are not specifically forbidden to venture into the north.

"We've made it clear that if [Hussein] moves against the people of the
north, we're prepared to use force," said a State Department official who
requested anonymity. The official would not say whether the United States
would in fact use force to protect the Kurds. The Kurds are living with an
American threat, not a promise, of retaliation against Hussein should he
venture into Kurdistan. After the Gulf war, the U.S. did not intervene with
troops to support rebelling Kurds.

As for the UN, its role in the north of Iraq is purely humanitarian. There
are no UN troops there to keep the peace.

Armed though they are, the Kurdish militias would be no match for the Iraqi
army in a fight. However, Iraq's army appears weakened at the moment because
of the war and the sanctions, and to start a new war in the north of the
country to regain control over the region could jeopardize the key crutch of
the Hussein regime, the Iraqi military, most diplomats in Baghdad said. The
long-term aim of the Iraqi government, however, remains clear.

"The north part of Iraq is Iraq and is going to be part of Iraq," said Abdul
Razak Hashemi, a minister in the Iraqi government.

It is a beautiful land. While the north doesn't have the economic value that
so many patches of flat, yellow Iraqi desert do-those patches that conceal
huge lakes of oil below the surface-the north is Iraq's Arcadia. Rivers
tumble through the mountains towards valleys of apple orchards and vines. A
gentle wind will ripple the surface of a cornfield that follows the curve of
the rolling land. It's little wonder that Hussein wants to return to the
land that was once his vacation retreat.

That prospect terrifies the Kurds who live in thousands of villages with
newly rebuilt homes with flat, low roofs. In his earlier campaigns of the
1980s and early 1990s to suppress rebellions in the north, Hussein had his
army level villages by the thousand.

Millions were made refugees in their own land or fled over the northern
peaks to Turkey. Tens of thousands of people died. Hussein used chemical
weapons on a town called Halabja in 1988, killing 5,000 people and leaving a
legacy of birth defects, high cancer rates and fear.

Helping to heal the wounds of Kurdistan is a vast aid program administered
by the UN. The UN aid agencies are everywhere. Food, medication, water
facilities, sewage systems, agricultural programs, reconstruction-all of
these things are supervised and paid for by the UN.

"We're spending over a billion to a billion-and- a-half dollars a year,"
said John Almstrom, the head of UN operations in the north. "Some agencies
are spending more money here than they do in the rest of the world." All of
that money comes from the sale of Iraqi oil under the Oil for Food program,
not from the regular UN budget.

What the UN cannot spend money on, according to Security Council
resolutions, is the maintenance of the local governments run by the rival
Democratic Party of Kurdistan and the Patriotic Union of Kurdistan.
Supporting these authorities would mean a de facto recognition of a Kurdish
state and such a state could destabilize Iraq and possibly fuel Kurdish
separatist movements in neighboring Turkey and Iran.

Officially, then, the UN does not recognize the local authorities,
acknowledging only the Baghdad government. On the ground, it doesn't quite
work that way. The UN works with the Kurdish population and authorities so
they can become self-sufficient rather than reliant on the UN.

"When we get out of here, we have to try not to have left behind white
elephants," Almstrom said. "There's been no point if we walk out of here and
nobody knows how to run things." In Ashawa, the villagers are relearning how
to run things their own way.

They have received no help from either the UN or their local Kurdish

And they seem to like it that way. They survive by cultivating the land that
was once Hussein's garden. Small boys collect twisted bits of metal from the
ruins of the palaces in wheelbarrows and sell the scrap to passing truck
drivers. But in spite of the efforts they are making to rebuild their lives,
they face an insecurity born of experience with Hussein.

"If the world doesn't protect us when he next comes, we know what we will do
again," said Krait Hassan, 29, Ashrafi Suleiman's son. He pointed to the
Turkish mountains.

 That Was no War, it Was Homicide -- And Still Iraqis Die, Sydney Morning
Herald, 22 June '00

Behind the official version of Desert Storm lie awful secrets of a one-sided
slaughter, writes John Pilger.

The great American reporter Seymour Hersh is at war with the American
military over his report in The New Yorker that one of its most lauded
generals, now a member of President Bill Clinton's Cabinet, ordered his
troops to fire on retreating Iraqis on the eve of the Gulf War ceasefire in

Barry McCaffrey, commander of the 24th Infantry Division, has denied
accusations such as the machine-gunning of 350 disarmed Iraqi prisoners.
"Why are we shooting at these people when they are not shooting at us?" says
one of his men on a tape quoted by Hersh. "It's murder," says another.

The allegations against McCaffrey suggest he was a bad apple. But the
enduring secret of the 1991 Gulf War was that it was not a war at all,
rather an epic act of homicide. A great deal of propaganda has been devoted
to covering up this truth and promoting the precision of so-called smart
weapons, as if war has finally become a science.

The bombing of the Al-Amiriya bunker in Baghdad in February 1991,
incinerating more than 300 people, mostly women and children, was
immediately blamed on Saddam Hussein. The bunker, we were told, was a
"military facility".

Although the lie was exposed by several reporters, the taint of "Iraqi
reporting restrictions" remained. Britain's Independent Television News said
it was censoring its report because the material was "too distressing".

Six months later, the unedited CNN and World Television News "feeds" of
footage of the bunker were obtained by the Columbia Journalism Review. "They
showed scenes of incredible carnage," wrote the reporter who viewed them.
"Rescue workers were collapsing in grief, vomiting from the stench, dropping
blackened corpses."

The atrocity was passed over quickly, and the "coverage" returned to its
main theme of a sanitised, scientific war. Unknown to reporters corralled in
Saudi Arabia, less than 7 per cent of the weapons used in the Gulf War were
"smart"; most were old-fashioned "dump" bombs. Seventy per cent of the
88,500 tonnes dropped on Iraq and Kuwait - the equivalent of more than seven
Hiroshimas - hit no military targets and fell in populated areas.

Paul Roberts, one of the few journalists to escape the "pool" system,
travelled with Bedouins. "I experienced bombing in Cambodia, but it was
nothing like that ..." he said. "There were three waves every night. After
20 minutes of this carpet bombing there would be a silence and you would
hear a screaming of children and people. [The survivors] were walking around
like zombies."

This was never published in the mainstream media, nor was the overwhelming
evidence that - as in Vietnam and last year in Serbia and Kosovo - civilians
were not mistakenly killed, but targeted. Cluster bombs, still killing and
maiming children in Kosovo, are, as the label says, "anti-personnel".

As the ceasefire was being negotiated with Iraq, columns of retreating other
nationalities who had been trapped in Kuwait, mostly guest workers, were
attacked by American carrier-based aircraft. They used cluster bombs and
napalm B, the type that sticks to the skin while continuing to burn.
Returning pilots bragged about a "duck shoot" and a "turkey shoot". Others
likened it to "shooting fish in a barrel".

Unknown to journalists in the pool system, in the two days before the
ceasefire (when the McCaffrey atrocities allegedly happened), American
armoured bulldozers were deployed, mostly at night, burying Iraqis alive in
their trenches.

Six months later, the New York Newsday reported that three brigades of the
1st Mechanised Infantry Division used snow ploughs mounted on tanks and
combat earthmovers to bury thousands of Iraqi soldiers - some still alive -
in more than 110 kilometres of trenches.

A brigade commander, Colonel Anthony Moreno, said: "For all I know, we could
have killed thousands." To my knowledge, the only images of this shown in
the West included a few fleeting pictures on the BBC.

The policy of the American commander, General Norman Schwarzkopf, was that
Iraqi dead were not to be counted. One of his senior officers boasted: "This
is the first war in modern times where every screwdriver, every nail, is
accounted for."

As for human beings, he added: "I don't think anybody is going to be able to
come up with an accurate count for the Iraqi dead."

The London Independent rejoiced in the "miraculously light casualties". In
the US, there was some attempt to root out the truth. However, this was
confined to very few newspapers, such as Newsday, and samizdat publications
such as Z magazine, which publishes Noam Chomsky.

Shortly before Christmas 1991 the Medical Educational Trust in London
published a comprehensive study of casualties. Up to 250,000 men, women and
children were killed or died as a direct result of the American-led attack
on Iraq. A one-sided slaughter.

In evidence before the House of Commons Foreign Affairs Select Committee,
the major international relief agencies reported that 1.8million people had
been made homeless, and Iraq's electricity, water, sewerage, communications,
health, agriculture and industrial infrastructure had been "substantially
destroyed", producing "conditions for famine and

Most of this was not reported, or was tucked away. In the most covered war
in history, almost everybody had missed the story.

It is hardly surprising that, in the nine years since, the death of half a
million children due to economic sanctions, and the continuing bombing of
populated areas in Iraq by American and British aircraft, are not news. "The
thought that the state is punishing so many innocent people," wrote
playwright Arthur Miller, "is intolerable. And so the evidence has to be
internally denied."

 How Dictators Manage Their Billions, Forbes, 22 June '00

By Arik Hesseldahl

For a guy who the world is more or less forbidden to do business with,
Saddam Hussein seems to be doing pretty well.

According to this year's Forbes list of the World's Working Rich, Saddam's
personal wealth has grown from about $5 billion in 1997 to $7 billion this
year. Not bad for a dictator whose country has been the subject of
international trade sanctions since 1991.

With the recent death of Syrian President Hafez al-Assad, Hussein is the
only member of the Forbes list of Kings, Queens and Dictators whose power
does not derive from being royal born. In power now for 21 years, Hussein's
continued presence on the list is a testament to his staying power and the
way he uses his wealth to inspire continued loyalty among his closest
cronies and family members.

The source of his money is clear: smuggling oil out of Iraq. And while
American and allied naval forces have done their best to keep illicit
shipping in check, observers like Jonathan Mendilow, a professor of
political science and a Middle East expert at Rider University in
Lawrenceville, N.J., say that for every one ship that is stopped or turned
back, five or six make their smuggling runs successfully.

By one estimate, smugglers will ship more smuggled oil this year than they
have in the previous four years combined. According to people familiar with
Iraq's practices, these ships, disguised to blend in with other maritime
traffic in the region, will typically carry less than a thousand barrels at
a time.

How much Iraq makes per barrel of smuggled oil is unknown, but it has no
doubt increased as international crude oil prices have grown in recent
years. Assuming a spot price of $33 per barrel and 700 barrels per ship,
Saddam would stand to make more than $23,000 per shipment.

Of course Saddam doesn't pocket it all. He has to pay shipping costs and
middlemen, such as the Iranian army, which is thought to take a cut of
shipments that traverse Iranian territorial waters, legally out of reach of
U.S. Naval forces. But every oil-smuggling ship that does make it,
personally benefits Saddam financially.

Iraq has been allowed to sell some $29 billion worth of oil under the United
Nations' oil-for-food program at an average price of $19.23 a barrel,
according to the United Nations.

In addition to maritime shipping, thousands of trucks smuggle Iraqi oil,
diesel fuel and other goods into Turkey and Jordan.

So what does the world's most disreputable billionaire do with his
ill-gotten gains? That was the question investigators from Kroll-O'Gara
(nasdaq: KROG) set out to answer on behalf of the government of Kuwait in
1992. Norb Garrett, now head of Kroll's business intelligence and
investigations unit, was involved with the project.

"We were asked to find out where Saddam and his clique might be quietly
investing his money around the world. And we found that he has pretty good
financial advice," Garrett says.

And lots of help from people who really don't have a choice. It turns out
that Saddam, through the use of front organizations and individuals working
on his behalf or on his order, has in the past invested in several
legitimate businesses around the world, including the French publishing
company Hachette, and other companies with subsidiaries in the U.S.

"He might have a finance person in, say, Switzerland tell him to open an
account in his own name and how much money it will have in it and exactly
what he wants done with that money," says Nick Peck, another Kroll
investigator who worked on the firm's Iraq investigation and now heads
Kroll's office in Johannesburg, South Africa. "That person's family will
typically be in Baghdad, and he'll know that they'll be hurt if anything
were to go wrong with that money."

One of the most notable of Saddam's foreign investments uncovered by Kroll
was a stake in the French magazine publisher Hachette. At one point, Kroll
investigators estimated that a Panamanian front corporation called Montana
Management owned 8.4% of Hachette's publicly traded stock, accumulated since
1981. At the time, Hachette said Montana wasn't represented on the board of
directors and had no influence on corporate affairs.

In another case, the U.S. Treasury Department said in 1991 that an Iraqi
businessman living in the Los Angeles area used some $4 million in Iraqi
funds to set up a London-based company called Technology and Development
Group. That company went on to acquire Matrix Churchill, a British tool
company with a subsidiary in Ohio.

Though Peck hasn't tracked Saddam's financial dealings for several years, he
says he is unaware of any reason to believe that Saddam's changed the way he
does business.

"The names may have changed, but it's a fair assumption that it's business
as usual for Saddam and for Iraq," Peck says.

But Saddam, like all mobsters, has to spend a fair amount of money to
maintain his grip on power. Big expenses include more than 50 royal palaces
around the country and payoffs to family members and his closest aides.

So how does Saddam stay in power? By spending large amounts of money to care
for those around him, from his immediate family to those in his extended
family from his hometown of Tikrit to those charged with protecting him and
his regime.

"The privileges of power are very costly," says Edward P. Djerejian, a
former U.S. ambassador to Syria and Israel who is now director at the James
A. Baker III Institute for Public Policy at Rice University in Houston. "The
substantial amounts of money that come in through the black market finance
the elaborate security apparatus that surrounds him. And that means not only
outfitting them militarily, but also taking care of people. That's one of
the ways that he assures loyalty."

Those closest to Saddam are sure to have their pick of houses and smuggled
material goods. See a Mercedes or BMW tooling through the streets of
Baghdad, and a Saddam crony is likely at the wheel.

What he doesn't spend on loyalty or the construction of lavish palaces is
saved for a rainy day, says Mendilow of Rider University.

Much of Saddam's wealth was generated after a secret 1972 decision by Iraq's
ruling Baath party to set aside 5% of the country's oil revenue for
unspecified eventualities. That helped build up much of the nest egg that
the dictator has salted away in various places around the globe, most of
which is believed to be stashed away in European banks.

At the time Saddam, still rising within the ranks of the party, was one of
three people given authority over that money. Once he came to power, he was
the only one of those three left alive. One of the others was executed, and
the other died in a helicopter crash.

"This is a person who knows that if his regime falls he is dead," says
Mendilow. "When you take care of your family, you take care of yourself, and
that way he personally can save himself."

Should the regime fall in some sort of violent upheaval, something
considered extremely unlikely in the foreseeable future, Saddam would
probably have arrangements in place to spirit himself out of Iraq, most
likely by ship through the port of Basra. From there, he would move on to
another country--such as Afghanistan or one in Africa--that would quietly
take him in for a large payment of cash, Mendilow says.

And while Saddam may be well entrenched in Iraq, the forces of history may
not be on his side. The examples of billionaire dictators whose wealth
outlasted their regimes are many.

. . . . .

 Sanctions Could Keep Inspectors Out of Baghdad, Independent, 23 June '00

Iraq: UN commission chief says he cannot secure co-operation, while his
predecessor warns that the Iraqi leader may have rebuilt his arsenal

By David Usborne in New York

Hans Blix, the chairman of the new UN commission for inspecting arms in
Iraq, has warned that, even as he prepares to send inspectors back into the
country, Baghdad may block him because of its fury over sanctions and the
bombing of its territory by Britain and America.

Mr Blix, who was appointed earlier this year to run the new body, called
Unmovic, voiced his concerns to The Independent as he completes recruitment
of a new team of inspectors. He expects to be ready to deploy them - if the
UN gets the co-operation of Iraqi President Saddam Hussein - towards the end
of August.

About 40 of the new inspectors, experts in nuclear, chemical and biological
weapons, will come to New York next month for four weeks of training. To
answer Iraqi complaints that the predecessor arms body, Unscom, adopted a
"cowboy" approach to its work, the inspectors will receive training on
issues such as Iraqi culture and religion.

While he claims to be "optimistic" that Iraqi resistance to the resumption
of UN inspections will be overcome, Mr Blix concedes that there are issues
beyond his control that mean Baghdad may never let in the new inspectors.
They include the near daily bombing of targets in the north and south of

"Most of those things fall outside my remit, like when they talk about
stopping of bombing, when they talk about the no-fly zone and when they talk
about stopping of sanctions," said Mr Blix, a former head of the
International Atomic Energy Agency. "These are things I can do nothing

It has already been 18 months since the old Unscom folded and inspections in
Iraq ceased, after the launch by the US and Britain of Operation Desert Fox
in December 1998. Mr Blix conceded that while satellite surveillance has
never stopped, he has no way of knowing what Iraq may have done to rebuild
its arsenals in that time. "Satellites don't see through roofs," he noted.

Mr Blix occupies a corner room in a suite of offices on the 31st floor of UN
headquarters that used to be the buzzing command centre of Unscom. With new
plaques identifying it as the home today of Unmovic - the UN Monitoring,
Verification and Inspection Commission - the offices, that spread also to
the floor below, are half empty. Only a small staff remains, preparing for
next month's training courses.

The place is filled, meanwhile, with artefacts testifying to the death of
Unscom, the agency that was reviled by Iraq. There is a clumsy-looking light
table, for instance, for studying aerial surveillance photographs, idle
since its two operators were fired over six months ago.

Stacked in corridors and against the walls of the so-called bunker, a room
where advisers would gather during each of Unscom's many crises, are scores
of tin and wooden crates that inspectors seized from a farm just outside
Baghdad in 1995. Most remain stuffed with the documents, diagrams and
computer diskettes that proved invaluable in demonstrating the extent of
Iraq's weapons programmes.

In theory, it will not be long before the place is buzzing again. However,
critics, including the former chairman of Unscom, Richard Butler, already
charge that Unmovic will never get off the ground. And even if Saddam
Hussein does let them in, they add, the new body will be toothless.

Mr Blix bases his optimism on the content of Resolution 1284, which created
Unmovic last December. Crucially, it promises a suspension of economic
sanctions, in place since 1991, if Iraq demonstrates cooperation "in all
respects" with the inspectors. Previously, those sanctions were to remain in
place until the complete elimination of all weapons of mass destruction
inside Iraq had been proven.

"So that is a totally new ballgame and I hope it is a ballgame that the
Iraqis will play," Mr Blix said. "My assessment is that they would stand to
gain from this." He takes seriously the earlier complaints by Baghdad about
some of Unscom's practices.

His new inspectors, he says, "should know about the shrines in Iraq because
many of them were not knowledgeable about this in the past. There was a
perception that the inspectors came from outer space before and they perhaps
did not always appreciate that a mosque was a mosque - that sort of thing."
But he denied the notion that Unmovic will be a pale and ineffectual
stepchild of Unscom.

"We are young and kicking. There is nothing in the resolution to say that we
will have less power than our predecessor body. There is no reduction of
power," he said.

"We shall not have cosy relations with the Iraqis but they should be
correct," he added. "We shall not undertake activities that are intended to
be harassing or humiliating or provocative".

 Butler Fears Saddam Has Used Black-Out to Build Arms, Independent, 23 June

By Anne Penketh

Richard Butler, the outspoken Australian who led UN efforts to strip Iraq of
its weapons of mass destruction after the Gulf War, says he fears that Iraq
has used the 18 months without UN monitors to rearm.

Iraq has been under sanctions since the 1990 invasion of Kuwait, but, in an
interview with The Independent, Mr Butler said that Iraq had exploited
divisions among the UN Security Council's five permanent members - Britain,
China, France, Russia and the US.

Russia has even ensured that "Saddam has a veto at the Council table" by
insisting that Iraq must approve of the future inspection procedures. "The
absence from Iraq of such [disarmament] work should be a source of grave
concern," Mr Butler said.

If the Big Five UN members are united, then military action should not be
necessary to enforce international law, he said.

Mr Butler, who has just published a book, Saddam Defiant, on his own
frustrating experience as top weapons inspector, said: "The world will never
be the same" if a missile loaded with nerve gas were to hit Tel Aviv, a
single canister of VX nerve gas were released into the New York City
subways, or a single nuclear explosion hollowed out central London.

Britain is faced with a tough policy decision on Iraq in the coming weeks
when the new disarmament body prepares to test President Saddam Hussein's
willingness to allow intrusive inspections.

If Iraq defies UN provisions by refusing entry to the UN inspectors, the
Security Council, will have to decide whether to take military action to
force the sanctions-hit country to comply.

Iraq's last refusal to co-operate with Unscom inspectors led by Mr Butler
prompted the US and Britain to launch Operation Desert Fox in December 1998.
The two countries have kept up a low-level bombing campaign in
allied-patrolled "no-fly" zones since then.

"There will be a crunch in August," Mr Butler predicted. That is when
Unmovic, the new organisation that he describes as the "sickly son of
Unscom," will have recruited and trained its politically and geographically
correct team of experts.

They were mandated by the Security Council last December to complete the
elimination of Iraqi nuclear, biological and chemical weapons, and
long-range missiles capable of striking Iraq's neighbours.

Unscom fell apart in the aftermath of Desert Fox, which split the Security
Council, amid accusations that it was being used by the US and Israel for
spying purposes, and was disturbing Iraqi sensibilities through its "cowboy"

Iraq, backed by Russia and China, continues to insist that it has already
complied with UN disarmament requirements and that sanctions should be
lifted forthwith. Baghdad has also warned that it will not cooperate with

Once the Unmovic teams, now led by Hans Blix, a former chief of the
International Atomic Energy Agency, are operating at the end of August, the
Security Council will have to decide whether to force the issue by
attempting to send them back to Baghdad.

Mr Butler, who is now diplomat in residence at the Council for Foreign
Relations in New York, said that Britain will come under pressure in the
Security Council from the Russians and Chinese. "Russia, China and France
say first lift the sanctions on the promise to let the monitors in. The
choice for the West is: will they take Iraq's word for it?

"And then the Council will have been conned," he added.

Noting that August is only three months ahead of the US presidential
election, Mr Butler said that the attitude of the other hardliner on Iraq
cannot be predicted. Washington seems somewhat disengaged on Iraq at
present, according to UN diplomats. Some said that Mr. Butler may be
premature in predicting a new crisis in August, and that the Security
Council may sit on its hands when presented with the new-look inspectors.

 Crude Facts -- Saddam is Winning Control of The Oil Markets, Wall Street
Journal (Europe), 23 June '00

By Malcolm Wallop and George Yates.

Mr. Wallop, a former U.S. Senator from Wyoming, served as ranking minority
member of the Senate Energy and Natural Resources Committee. George Yates,
an independent oil producer from New Mexico, has served as chairman of the
Independent Petroleum Association of America.

It's been nearly 10 years since the West went to war against Saddam Hussein.
A brilliant military campaign expelled his army from Kuwait in a little over
a month. A sustained eight-year inspections regime curbed the Iraqi
dictator's attempts to acquire weapons of mass destruction. But a nine-year
UN sanctions policy designed to strangle his regime economically has not
only failed to accomplish its objectives - it has actually helped Saddam
accomplish his. Consider this week's meeting in Vienna of the Organisation
of Petroleum Exporting Countries, where oil ministers voted to raise their
production ceiling by 700,000 barrels a day, to 25.4 million barrels a day.
Alas, increased output is not likely to bring down the price of oil. Many of
OPEC's members are now at full capacity.

Indeed, the spot price of crude oil for August delivery actually rose by 72
cents after the results of the conference were announced. Clearly traders
believe that oil supplies are tight. Meanwhile Iraq, which does not
participate in these conferences, has increased its output to a post-Gulf
War high of 2.9 million barrels a day, up 26% since March. That makes Iraq
the world's third largest oil exporter. And it gives Saddam the clout to
throw the oil markets into chaos, particularly if he chooses dramatically to
scale back production. Saddam is once again a force to be reckoned with in
the world economy. How did we come to this? UN sanctions were supposed to
allow Iraq to export just enough oil to purchase urgently needed food and
medicine. But the fine print of the agreement was much more generous to
Baghdad than most people ever realised. By 1998, the value of oil Iraq could
sell on the open market was capped at a little over $5 billion every 180
days - a sum so high that Iraq could not even reach it during the period of
low oil prices in 1998 and early 1999. Perversely, that ceiling allowed
Saddam to more than triple his export capacity in 1998 alone. Additional
volumes, unreported to the UN, are also believed to have been dumped on the
market through Russian trading companies, sold to Jordan, or smuggled
through Iran to Turkey. Then, in December 1999, the UN lifted its ceiling
entirely on arguable humanitarian grounds, without considering the effect on
the oil market.

The flaw in UN sanctions policy should have been apparent from day one. The
policy created a disincentive for Iraq to conserve resources, maximise
price, or otherwise conduct affairs based on normal commercial
considerations. Because the sanctions were based on a dollar and not a
barrel ceiling, low prices made little difference to Saddam. He could create
an oil glut without having to face the consequences, even if the glut had
very serious consequences to the rest of the oil-producing world. Not
surprisingly, it is Saddam who is largely responsible for the collapse in
oil prices in 1998 and 1999.

That collapse devastated the oil industry and resulted in the reduction of
worldwide supplies. Approximately 560,000 daily barrels of oil production
were lost in the U.S. alone. At the same time, non-OPEC production declined
for the first time in decades. Even OPEC countries felt the pain, as they
were unable to maintain existing reserves, much less drill for new supplies.
Shutting down the upstream industry for two investment cycles has had
serious implications for spare capacity - that is, capacity that could be
produced within two months time. While no one has perfect knowledge of spare
capacity, we do know that today's spare capacity is small relative to the
current 77 million-barrel-a-day market. Measuring this capacity against the
needs of a growing market, the natural depletion of oil wells, and various
transportation and supply infrastructure bottlenecks, worldwide oil supplies
are tenuous. Few realise that the world needs enough spare capacity to
ensure a stable supply of oil.

And this failure has created a potent gift for Saddam Hussein. We have made
it possible for him to become a swing producer - able to set the world price
of oil. He can and probably will use this economic weapon. A few months ago,
Iraqi Oil Minister Amer Rasheed said that Iraq planned to ramp up production
by another million barrels a day by the end of the year. Ominously, Mr.
Rasheed also threatened to curtail exports if the U.S. doesn't compromise on
sanctions. Is this an idle threat? Almost certainly not. Saddam has now
achieved what the allies thought they had prevented by forcing him out of
Kuwait - control of the oil market. He can use this leverage to set oil
prices or undermine sanctions. As fuel supply is relatively inelastic in the
short term, very high prices would be the obvious result of any export
curtailment until the world's oil industry can respond. Finding and
developing supply requires a substantial lead-time. Oil production is not a
"just-in-time" business. Obviously, the world has a problem. Can it be
solved without bowing to Saddam's demands?

Fortunately, the answer is yes. We absolutely must maintain surplus capacity
worldwide and support the process that is necessary for the maintenance of
that capacity. We also need an information system that gives us more
accurate data on excess capacity and production worldwide than we have at
present. Western countries that don't have policies to encourage indigenous
production of oil and gas need to adopt them. In the short term, our only
recourse to respond to an oil shortage and maintain necessary sanctions on
Iraq may well be using the world-wide strategic petroleum reserves created
after the OPEC oil embargo - a system that so far has never been used.
Whether Saddam will ultimately wrestle control of the oil market remains an
open question. But he's never been in a stronger position to do so. It's
time the West starts playing its cards more wisely.

Only links provided for the following reports:

 The Man From UNSCOM Has a New Mission, San Francisco Chronicle, 16 June

 Iraq Says Accepts New Oil Deal With U.N., Reuters, 20 June '00

 Iraq May Never Repay War Debt, Experts Say, National Post, 22 June '00

 Iran Says Forces Kill Seven Rebels on Iraq Border, Reuters, 22 June '00

 Iraq Says Iran Behind Bungled Car Bomb Attack, Reuters, 22 June '00

 The West's Forgotten Conflict, Independent, 23 June '00

 In Iraqi Countryside, Allies' Forgotten War Inflicting Deep Wounds
Innocent Civilians Routinely Killed in Retaliatory Strikes, San Francisco
Chronicle, 23 June '00

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