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NEWS SUPPLEMENT, 29/10-5/11/00 * Flights to Iraq Carry a Message to U.N. Sanctions: As more nations challenge embargo imposed after Kuwait invasion, even the U.S. is rethinking its stance. [Los Angeles Times with URLs for similar reflections in The Times and The Observer] * SAS top brass left us to die Bravo Two Zero survivor blames ex-commander [tales of the Gulf War] * US Troop Alert in S. Arabia, Kuwait [this is interesting on the need to smuggle the USS Cole back without passing through the Suez canal, where presumably, though this is not said in so many words, it would occasion much jubilation among the Egyptian people] * Will US attack Afghanistan ? [From a Pakistani perspective, indicating that it would not be easy] * Iraqi vendetta against dollar gives welcome boost to euro [Financial Times] * A discreet way of doing business with Iraq [Financial Times. Largely on US involvement in business with Iraq] * Cheney Broke His Word on Dealing With Iraq [an American Jewish comment on the above story] * Addressing Iraqi Sanctions [editorial from the Hartford Courant on a series of anti sanctions articles they have run. Links are given to help find the articles in question] * Guessing game about future US set-up [Pakistani view on the foreign policy personnel of each of the two candidates for the US presidency] http://www.latimes.com/news/front/20001030/t000103785.html * FLIGHTS TO IRAQ CARRY A MESSAGE TO U.N. Sanctions: As more nations challenge embargo imposed after Kuwait invasion, even the U.S. is rethinking its stance. by Maggie Farley, Los Angeles Times, Monday, October 30, 2000 UNITED NATIONS--After a decade-long U.N. embargo on air travel to Iraq, the Saddam International Airport has started to bustle again, with planes carrying few passengers but packed with political significance. On Sunday, a Palestinian Airlines flight became the 36th of a new breed of arrival to touch down in Baghdad since a Russian Yak-42 carrying oil executives first challenged the embargo in August. The flurry of flights from European and Arab nations has followed to show support for the Iraqi people, who these nations say have been unfairly hurt by the economic sanctions imposed by the U.N. after Iraq invaded Kuwait in 1990. "It is the beginning of the collapse of sanctions," Iraqi Deputy Prime Minister Tarik Aziz told reporters in Baghdad after a few aircraft had landed in the capital last month. "People all over the world are saying, 'Enough is enough.' " The challenges have grown increasingly brazen and bizarre. While some nations initially exploited a gray area of the sanctions by notifying the U.N. that they would be sending humanitarian delegations, groups such as the Palestine National Council are simply showing up in solidarity. And rather than bringing aid, Sunday's Palestinian flight landed with a number of Palestinians wounded in clashes with Israeli forces and took off again with five tons of medical supplies donated by President Saddam Hussein--the very provisions the Iraqi regime says its people are struggling without. France and Russia were the first countries to test the boundaries of the sanctions. Both are veto-wielding members of the U.N. Security Council who have long argued that broad sanctions are hurting Iraq's people, not the regime. And the effort has gotten off the ground at a time when looming national elections and high oil prices have made the U.S., Iraq's staunchest foe, reluctant to confront Baghdad. While the ban on flights has been only a small part of sweeping sanctions intended to isolate Iraq until Baghdad proves it has stopped making weapons of mass destruction, the show of solidarity to defy it may hasten changes to the sanctions, diplomats say. Even the hard-line U.S. is quietly moving toward what have become known as "smarter sanctions," in a more pragmatic approach to forcing change on the regime it once led a war against. With the notable exception of Yugoslavia, the U.S. experience in Iraq and elsewhere has provided evidence that broad, untargeted sanctions may be too blunt an instrument to compel change. A case-by-case study of sanctions released by the U.N. in April found that such restrictions are often ignored but that when they do strike home, it is often innocents who are hurt, not the rogue regimes the sanctions are aimed at. "We don't have a grand policy decision reorienting sanctions," said James Cunningham, who handles the Iraq issue for the U.S. mission at the United Nations. "But in general, we agree with the other members. We want to make sanctions as effective and targeted as possible." The opportunity to do that may come in December, when Resolution 1284--which mandated the sanctions--is up for its annual review. The time will be ripe politically for the outgoing Clinton administration to quietly explore different ways to compel change. The Security Council will have heard the recommendations of a U.N. panel due to report in late November on how to improve the effectiveness of sanctions while sparing civilians. That may mean tightening clamps on Iraqi leaders' air travel and bank accounts. Iraq, too, is anticipating change, with growing support from sympathizers and perhaps an incoming American president who may want to move policy in a new direction. Emboldened by an increasingly active black market and more visits from executives preparing to do business with Baghdad once sanctions are lifted, Aziz, the deputy prime minister, urged allies to break the embargo and resume trading with his country while he was at U.N. headquarters for the Millennium Summit in September. France, Russia and China hold the most contracts under the current oil-for-food program, which allows Iraq to buy nonmilitary supplies with oil revenues through the U.N. While French Foreign Minister Hubert Vedrine insists that his country's foreign policy is not swayed by commercial considerations, France tops the list with $2.61 billion in contracts, followed by Russia with $2.14 billion and China with $1.94 billion. France, Russia and China, however, are careful to point out that they still support the U.N.'s core demand: that Iraq must allow U.N. inspectors to verify that the country has no weapons of mass destruction. The current resolution requires Iraq to prove it has a clean slate before it can receive a temporary suspension of sanctions. But Baghdad has barred inspectors from returning since they left in December 1998 just before Western warplanes bombed the country in retaliation for its alleged obstruction of the inspections program. The country's people are suffering because of the stalemate, opponents of the sanctions say. Vedrine recently called them "cruel, outdated and economically absurd" and is pushing for a partial easing of the embargo in return for Iraq's gradual cooperation. For the U.S. and Britain, though, it's all or nothing. That's what led some members of the Security Council to begin chipping away at the edges of the policy, hoping to cause the whole enterprise to crumble. Last month, France, Russia and China pressured the U.S. and Britain to reduce the share of U.N.-handled oil profits that Iraq pays to Persian Gulf War victims, from 30% to 25%, so the country can spend more of that money on its own people. At the same time, the number of countries eager to send symbolic aid flights to Iraq is taking off. Indonesia's president, Abdurrahman Wahid, has scheduled a visit to Baghdad in November. "The flights have a psychological effect," said Peter van Walsum, the Dutch ambassador to the U.N. and chairman of the Sanctions Committee. "But they also have an unfortunate effect of leading Iraq to think a revision of the entire sanction regime is coming. The council is united on [Resolution] 1284. That is clear." The ban on air travel is meant to politically isolate Baghdad and keep any money, equipment or technology that could be used for weapons from being smuggled into the country. The embargo has been so thorough that even Iraq's top ministers and foreign diplomats must enter and leave the country by traveling overland to the Jordanian capital, Amman, a 10-hour car ride from Baghdad. There have been exceptions to the no-flight rule. U.N. Secretary-General Kofi Annan landed at a military air base when he visited Hussein in 1998. And the pope would have been allowed to fly directly to Baghdad had his planned pilgrimage to holy sites in Iraq this year not been canceled. It was preparations for the pope's trip that uncovered the gray area in the resolution that the recent aid flights have exploited. The rules allow humanitarian flights as long as the cargo is inspected for contraband and the U.N. Sanctions Committee approves the journeys in advance--in part to prevent the passenger planes from being mistakenly shot at by U.S. and British military forces enforcing "no-fly" zones over Iraq. France and Russia both flouted the rules by notifying the committee but taking off before receiving its authorization. But as more flights arrive, fewer countries are even bothering with notification. As support for the continuing isolation of Iraq withers, the U.S. is trying to avoid being left alone in its Iraq policy. "Washington is losing the battle of public opinion, and people are beginning to consider alternatives," said Henri Barkey, chairman of the International Relations Department at Lehigh University in Pennsylvania and a former Iraq analyst at the State Department. "If the U.S. were to get out of the box, it would have to be part of a bigger deal," Barkey said. "Each side must trade something. Now they are exploring what are the parameters of that trade." OTHER SIMILAR MUSINGS ON THE UNRAVELLING OF SANCTIONS IN THE LIGHT OF THE BAGHDAD TRADE FAIR MAY BE FOUND AT: THE TIMES http://www.thetimes.co.uk/article/0,,29084,00.html * Foreigners flock in as Saddam mocks sanctions by Richard Beeston Diplomatic Editor, The Times, Thursday November 02 2000 and http://www.thetimes.co.uk/article/0,,28807,00.html * How Iraq broke out of sanctions The Times, Thursday November 02 2000 THE OBSERVER http://observer.co.uk/international/story/0,6903,392899,00.html * West treads a reckless path to embrace Saddam: Britain and America still take a hard line against Iraq, but other countries and large corporations can't keep away. by Peter Beaumont, The Observer, Sunday November 5, 2000 http://www.record-mail.co.uk/shtml/NEWS/P7S6.shtml * SAS TOP BRASS LEFT US TO DIE BRAVO TWO ZERO SURVIVOR BLAMES EX COMMANDER Daily Record, Tuesday, October 31, 2000 BLUNDERS by SAS chiefs left three Bravo Two Zero heroes dead in the Iraqi desert, a court heard yesterday. It was claimed that the crack unit's top brass then mounted a cover-up of the disastrous Gulf War mission - and even considered court-martialling the five survivors. The damning accusations were made by former SAS commando and patrol member Mike Coburn. Top of his list for criticism was the SAS commander at the time - who is now Director of UK Special Forces. Coburn took the stand on day five of his secrecy battle. The MoD want to stop him publishing a book - Soldier 5 - telling the "true story" of the ill-fated mission. He claimed: l Poor intelligence had placed the patrol "right next to a significant number of enemy forces when there should not have been any". l Key signals and other equipment had failed and the patrol were sent into a hostile area with the wrong radio frequencies. l A search-and-rescue mission for the patrol was delayed after their calls for help were deemed "premature". l The patrol were told by their CO that Scuds were more important than men, meaning they were expendable. Ex-corporal Coburn, 36, told a New Zealand court: "The majority of the reasons for Bravo Two Zero's failure lay not with the patrol but with the regimental hierarchy." The patrol were dropped 300 miles into Iraq to find and destroy Scud missiles but had to flee troops in the freezing desert when their cover was blown. Troopers Bob Consiglio and Steven "Legs" Lane were killed in the ensuing fire-fights and Sergeant Vince Phillips died of hypothermia. Coburn said: "Part of the ethos of the SAS was that no matter how much difficulty a patrol got into, the regiment would always take immediate, urgent steps to come and get you. "Sadly, this pillar of understanding was shattered with Bravo Two Zero." Coburn said it was the SAS's reluctance to admit, contemplate and learn from their errors that prompted him to leave the Army five years later. He claimed that when the Bravo Two Zero survivors returned to base after almost two months of captivity and torture, they were summoned in front of the CO who said he had decided not to order a court martial. Coburn said: "The reference to a court martial seemed incredible." He added: "As the commanding officer of the regiment during the Gulf is now the current Director of Special Forces, it is not too difficult to see why it is not in his interest for the details, as contained in the manuscript Soldier 5, to be subjected to further scrutiny." The hearing in Auckland continues. http://www.wn.com/?action=display&article=4210894&template=worldnews/search. txt&index=recent * US TROOP ALERT IN S. ARABIA, KUWAIT WASHINGTON (AP, 31 Oct 2000) U.S. forces in Saudi Arabia and Kuwait are on the highest state of alert following new indications of terrorist threats in those Persian Gulf countries, U.S. officials said Tuesday. Pentagon spokesman Kenneth Bacon cited ``credible threat information'' but declined to be more specific. U.S. officials also revealed that since the bombing of the USS Cole on Oct. 12 in Yemen, no American warships have used the Suez Canal the fastest, and normal, route from the eastern United States to the Gulf. The crippled Cole, with most of its crew still aboard in the Gulf of Aden, will take the long way home to the United States around the Cape of Good Hope on Africa's southern tip to avoid the Suez Canal, said defense officials who discussed the matter Tuesday on condition of anonymity. The defense officials said the Navy has been avoiding the Suez because of security concerns in light of escalating terrorist threats in the region. Bacon, however, denied there had been a decision to stop using the Suez. Meantime, sources close to the Yemeni government's investigation into the Cole bombing said the probe is focusing on four men believed to be the main plotters and is exploring possible links to Muslim militants in Yemen. The State Department's top anti-terrorism official, Michael A. Sheehan, declined Tuesday to divulge what investigators into the Cole attack may have found so far, saying, ``It's not clear what happened.'' But, he added, ``My guess is that it (the attack) was not state-sponsored.'' Bacon said it likely will be several more days before the Cole begins its journey home. The 505-foot destroyer was in the process of being secured atop the main deck of the Blue Marlin, a Norwegian-owned heavy-lift ship. To accomplish that, the Blue Marlin submerged its huge deck and positioned the Cole on top before starting to fasten it in place. The Navy originally had estimated this maneuver would take about 24 hours, but Bacon said extra time will be taken to test the stability of the destroyer on the Blue Marlin's deck. ``They just want to be very careful,'' Bacon said. At a Pentagon briefing, Bacon displayed U.S. Navy photographs of the operation, but none showed the Cole raised out of the water, where the full dimensions of the bomb crater in its hull could be seen, and Bacon said such photos might not be made public. Bacon said the only U.S. ship that had been scheduled to transit the Suez Canal since the Cole did so on Oct. 9 was the destroyer USS Donald Cook, which instead will accompany the Cole on its voyage home. He said it would be a matter of weeks before any other ships are scheduled to use the 101-mile canal that connects the Mediterranean Sea with the Red Sea, but he denied that reflected a change in plans. In the meantime, U.S. officials are consulting with the Egyptian government which operates the Suez Canal on security arrangements, Bacon said. Although the Persian Gulf region is generally considered more dangerous than many other parts of the world, concerns have escalated since the Cole bombing, which American officials believe was the work of terrorists, possibly with links to suspected terrorism mastermind Osama bin Laden. Last week the Pentagon disclosed that American forces in Bahrain and Qatar tiny Gulf states with friendly U.S. ties were placed on the highest state of alert, known as ``threat condition delta.'' This was in response to terrorist threats of unknown credibility against specific targets including an airfield in Bahrain used by American aircraft. Bacon said the roughly 5,000 U.S. forces in Saudi Arabia and 5,000 in Kuwait were placed on ``threat condition delta'' on Monday in response to credible threats against unspecified targets in those countries. Along with a Navy carrier battle group in the Gulf, the troops in Saudi Arabia and Kuwait form the bulk of the U.S. effort to contain Iraq's military. They include a U.S. Air Force contingent at Prince Sultan Air Base in central Saudi Arabia that helps patrol the ``no fly'' zone over southern Iraq. The American forces in Kuwait are mainly Army units at Camp Doha and include a Patriot air defense missile unit. Placing the troops on ``threat condition delta'' does not interfere with their normal operations but further restricts movements off the base and requires more onerous security checks of people entering the base. Security precautions in Saudi Arabia were increased in 1996 after a terrorist bomb struck the Khobar Towers housing complex near Dhahran, killing 19 U.S. Air Force members and injuring dozens. Meantime, Sheehan, coordinator of the State Department's counterterrorism office, urged Yemen to give U.S. investigators more access to witnesses, suspects and evidence in the Cole bombing investigation. While Yemen had the authority and responsibility to conduct the investigation, ``we would like to be privy'' to more of it, he said. State Department spokesman Richard Boucher said, ``We are working out the modalities of this kind of cooperation and we think we are making progress.'' http://www.dawn.com/2000/11/01/op.htm#1 * WILL US ATTACK AFGHANISTAN ? By Dr Ayesha Siddiqa, Dawn (Pakistan) 1st November AS the threat of another US attack on Afghanistan grows, the Pakistan foreign minister issued a statement aimed at discouraging American policy makers from embarking upon such a course of action. A decision on whether Afghanistan will be attacked depends on the outcome of the FBI investigator's findings in Yemen on the bombing of the USS Cole and the internal dynamics of policymaking in Washington. At this point it is worthwhile to understand what is currently taking place in American policy making circles. Soon after the terrorist attack on the American naval ship there was talk of Osama bin Laden's possible linkage with the incident. Indeed, certain Yemeni sources have also indicated that the bombing was instigated by bin Laden. The US government has pledged that in case a linkage is found,it would not spare the 'culprit' and will punish the aggressor. This means another attack on Afghanistan. There is also an understanding that another attack may be as fruitless as the first one, however, this is a course of action that may as well be considered. According to one State Department official, despite the fact that there will be no military gains in attacking Afghanistan, it will at least be good for the morale of the US armed forces and the people. All of this is happening with elections in the US round the corner. This is a time when nerves are raw and each candidate tries to appear more strong and robust than the other. The mood is not likely to change even after the elections when the report on the bombing will become available. A decision is likely after January when the next president takes over. There are a number of experts in the State Department who can see the futility of attacking Afghanistan. However, the paranoia of threat posed by terrorism against the US, which is the only superpower in the world, and the fear of Islamic fundamentalism are currently far more overpowering factors. There will not be a substantial difference in the positions taken by either George W. Bush or Al Gore. Bush has made several statements regarding allocating more resources to defence and strengthening America militarily. His recipe is to acquire more hardware for the military. Bush will try to recreate the days of Ronald Reagan known for a set of policies that led to the defeat of the Soviet Union in Afghanistan and its final breakup. This formula does not take into account the fact that more military units would mean more targets. Would Gore be able to make a different decision? Probably not because going soft on US security is what his rival has accused him of. It is noteworthy that despite a better political and diplomatic acumen,President Clinton was always forthcoming in using military force wherever it was required. One cannot ignore the impact of public opinion on American policymaking. Besides the wrong technology that was used in Vietnam and Korea, what made America lose in these two countries was the opinion at home. The American people were not willing to let their boys die in foreign lands. Vietnam and Korea were a disappointment to the Americans who had been made to believe that with US's superior military technology and prowess,any war could be won without major human loss. This lesson was repeated during the Gulf War.The coalition of forces and modern military technology allowed the allies to overpower the rag-tag armed forces of Iraq most of whom did not even come out to fight. Unfortunately, what the American public is not being informed about is that insurgency operation or low-intensity conflict is a different ball game. People in the US policymaking circles realize the difference,nonetheless, this understanding has not been communicated to the people who will demand a strong action against whoever engineered the attack against the USS Cole. The only option left to whoever will be in the White House will be to use cruise missiles and bombers to launch an attack on Afghanistan. In the words of a State Department official: "at least it will make us feel better." This is not just a random cynical remark. It is also indicative of the failure of American policy as far as using its allies in fighting Washington's wars. There is the realization that Pakistan is not cooperating with the US in apprehending bin Laden. The standard response from Islamabad is that the Taliban are not under our control. It was, therefore, that Islamabad had arranged a direct meeting between the Talibaan and the US officials. The Taliban are eager to cooperate and project a positive image, but short of handing over bin Laden. The strategic relationship that has recently been struck between Bin Laden and Mullah Omar has changed the dynamics of the Taliban's response to the issue. It would be against the Afghan tribal code of honor to hand over or push out their son-in-law irrespective of whatever he may be costing them financially or diplomatically. The apparent campaign at rooting out poppy cultivation and burning narcotics manufacturing laboratories are some of the measures to project an image of being responsible actors. Nevertheless, they will not go beyond this. There is also sufficient realization in certain circles in Washington that another attack on Afghanistan will tend to convert more neutral people in Pakistan against the US and towards religious fundamentalism. Such an attack will also not help Islamabad's relations with the Taliban and the number of non-state actors in Afghanistan who are a crucial part of Pakistan's current military operational plans. Hence, no time was lost in communicating to the Americans that Islamabad will not allow any further attack on Afghanistan using Pakistani territory. It must be noted that, in case of an attack, Pakistan presents the only viable option. Equally noteworthy is that fact that the Pakistani military was not very pleased with the use of Pakistan's territorial waters by the US ships to launch the first attack. It was indeed a flagrant disregard of another nation's sovereignty. The action angered a military that was already irritated by the way Islamabad was dumped by Washington soon after the withdrawal of the Soviet troops from Afghanistan. The first attack took place under a civil government in Pakistan that made it easy for every one to accuse the political leadership for compromising the nation's sovereignty and interests. This could be used to convince the Taliban too of the military's innocence of any involvement in the affair. Unfortunately, with a military government in the seat of power such an excuse would not wash down well in convincing the forces in Afghanistan again. Also, with the relative strengthening of the jihadi forces in Pakistan, Islamabad seems to have closed all other option but to keep on the better side of the Taliban. For the present Pakistani government the comfort is that its nuclear capability and Washington's willingness to engage Pakistan in dealing with the problem of terrorism would stop the US from taking any drastic action like more sanctions against Pakistan. Furthermore, it is believed that Washington cannot afford to marginalize Islamabad. The question is how far can Pakistan depend on maintaining this status quo? For the moment, the US stands relatively alone in pursuing an aggressive policy against Afghanistan. Its allies in Europe appear more interested in talking to the Taliban in order to grab the financial opportunities that the country offers in terms of reaching the resources in Central Asia. France, for instance, has begun discussions with the Taliban. The French have always insisted on having a policy independent of US interests and this should not be taken as an indication of breaking away from Washington. However, the fact is that Afghanistan is not another Iraq. A consensus on a joint military venture would be difficult to come about. The other options for Washington are not encouraging either. Although uncomfortable with Afghanistan's bid to fan religious fundamentalism in their countries, states like Uzbekistan, Turkmanistan, and Tajikistan are not in a position to assist an American sponsored military operation. Iran is another party interested in containing the Taliban,but cooperation with Washington is not currently on the cards. A joint operation with Iranian forces would require re-educating American people regarding Iran and carrying major changes in US's foreign policy. The US could also try to work out a secret alliance with Tehran in using Iran's assistance to carry out a massive commando operation in Afghanistan. This will be a reminder of the Iran-Contra scandal. Military experts in the US, in fact, consider a commando operation as a better option. It will indeed be a high-risk operation. The issue is: who will be the likely partner in such a venture: Iran or Pakistan? Aiding American commandos in such an operation would not be a favourite option with Pakistan's military government that cannot afford to lose its legitimacy. The Aimal Kansi case has not been completely forgotten. However, that case happened during the days of a political government that was sacked on the basis of its inability to guard the country's financial and strategic interests. Today, the jihadi groups and religious fundamentalist parties have gotten stronger and are capable of brewing unrest in the country against the present regime. Also worth considering is the question whether Pakistani military is in a position or has the will to challenge American ships. Making holes in American ships using American technology transferred to Pakistan in the 1980s is a possibility, but with serious ramifications. It may as well open a two-front situation for Islamabad that the Indians will probably love. Notwithstanding a final decision, Islamabad may even want to consider negotiating favourable terms for Pakistan. Politics is really a game of trade-off. It only depends on what the state's ultimate objective is. http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3VUZ740FC&liv e=true&useoverridetemplate=ZZZUGORQ00C&tagid=ZZZNSJCX70C&subheading=global * IRAQI VENDETTA AGAINST DOLLAR GIVES WELCOME BOOST TO EURO by Christopher Swann, Financial Times, 1st November The unloved euro has found an unlikely friend in the Iraqi leader Saddam Hussein. Late on Monday the United Nations agreed to Iraqi demands that it be paid for its oil in euros, as part of Mr Saddam's long-running campaign to undermine the global hegemony of the US dollar. Iraq had threatened to stop selling oil if the UN failed to agree to its demand by Wednesday. Dealers in the foreign exchange market have so far tended to view Iraq's vendetta against the dollar - a symbol of America's economic dominance - as an amusing sideshow. "The euro's fan club is growing by the day," said Michael Lewis, senior economist at Deutsche Bank in London. "It'll be Kim Jong-il next," he added, referring to the North Korean leader, another ideological foe of the US, despite a recent signs of a thaw in relations. But the effect on the euro is not to be sneezed at. The sixth largest oil producer in the world, Iraq pumps out about 2.3m barrels a day. With Brent crude trading at more than $30 a barrel, the Iraqi move means monthly demand for euros will increase by around E2bn ($1.7bn). This is equivalent to a reasonably sized merger and acquisition inflow into the euro-zone every month - helping to offset the haemorrhage of direct investment outflows that has undermined the euro since its inception last year. Mr Saddam could provide an even bigger boost to the euro by converting the revenues from previous oil sales into the European currency. Currently, the escrow account held in New York on Iraq's behalf is thought to contain around $10bn. Much is already committed to pay for contracts agreed as part of the oil-for-food programme after the 1991 Gulf war. No official request has yet been lodged but Iraq is thought to be keen to convert the rest into euros. Even if only half were to be converted, this would amount to roughly the same sum spent by the world's main central banks when they intervened to support the euro in September. On Monday, speculation that Iraq planned to convert the account helped the euro climb over a cent to above $0.85 for the first time in two weeks. "It is hilarious that Saddam Hussein appeared to have been almost as helpful to the euro as G7 intervention," said one foreign exchange analyst. But the significance of the Iraqi move, says Jim O'Neill, head of currency research at Goldman Sachs, goes beyond simply raising the demand for euros on the market. "Iraq's decision is a gentle reminder of the euro's potential," he said. "If others follow this will be very important." http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3TH1LV2FC&liv e=true&tagid=ZZZINS5VA0C&subheading=middle%20east%20and%20africa * A DISCREET WAY OF DOING BUSINESS WITH IRAQ By Carola Hoyos, United Nations correspondent Financial Times, 3rd November Millions of dollars of US oil business with Iraq are being channelled discreetly through European and other companies, in a practice that has highlighted the double standards now dominating relations between Baghdad and Washington after a decade of crippling sanctions. Though legal, leading US oil service companies such as Halliburton, Baker Hughes, Schlumberger, Flowserve, Fisher-Rosemount and others, have used subsidiaries and joint venture companies for this lucrative business, so as to avoid straining relations with Washington and jeopardising their ties with President Saddam Hussein's government in Baghdad. By submitting their contracts to the UN via mainly French subsidiaries, many of which do little more than lend their name to the transaction, the companies are treated as European, rather than US or Japanese, applicants. In 1998 the UN passed a resolution allowing Iraq, the world's sixth largest oil producer, to buy spare parts for its dilapidated oil industry. Since then, only two of the 3,058 contracts for oil industry parts that have been submitted to the UN have officially come from US companies. But the facts behind these figures tell a very different story. US companies have in fact submitted contracts worth at least $100m to the UN for approval to supply Iraq with oil industry spare parts, through their foreign subsidiaries. Some informed estimates put that value as high as $170m. They have used, or allowed, associated companies, mainly in France, but also in Belgium, Germany, India, Switzerland, Bahrain, Egypt and the Netherlands, to put the contracts through. "It is a wonderful example of how ludicrous sanctions have become," says Raad Alkadiri, analyst at the Petroleum Finance Company, a Washington-based consulting firm. "On the one hand you have the Americans, who do not want to be seen trading with Iraq, despite the fact that it is above board and legitimate, because that would contradict their image of being tough towards Iraq. On the other hand you have the Iraqis, who on the technocratic level would like to buy the best stuff on the market - in many cases that comes from the US - but politically have to be able to say they are refusing to deal with US companies," he said. Halliburton, the largest US oil services company, is among a significant number of US companies that have sold oil industry equipment to Iraq since the UN relaxed sanctions two years ago. >From 1995 until August this year Halliburton's chief executive officer was Dick Cheney, US secretary of defence during the Gulf war and now Republican vice-presidential running mate of George W.Bush. >From September 1998 until it sold its stake last February, Halliburton owned 51 per cent of Dresser-Rand. It also owned 49 per cent of Ingersoll-Dresser Pump, until its sale in December 1999. During the time of the joint ventures, Dresser-Rand and Ingersoll-Dresser Pump submitted more than $23.8m worth of contracts for the sale of oil industry parts and equipment to Iraq. Their combined total amounted to more than any other US company; the vast majority was approved by the sanctions committee. Mr Cheney is not the only Washington heavyweight to have been affiliated with a company trading with Iraq. John Deutch, a former director of the Central Intelligence Agency, is a member of the board of Schlumberger, the second largest US oil services company. Schlumberger has submitted at least three contracts for well-logging equipment and geological software via a French subsidiary, Services Petroliers Schlumberger, and through Schlumberger Gulf Services of Bahrain. Some of the companies, such as General Electric and Dresser-Rand, say that not only political considerations shape their decision to do business through their European offices. "It is customary for GE to do its business for the Middle East out of its European offices," says Louise Binns, a GE spokeswoman, who acknowledged that GE does business with Iraq. Other companies the FT contacted admitted doing business with Iraq, either directly or through their subsidiaries. US companies that use foreign associates can also reduce the risk of their contracts being blocked by France and Russia in retaliation for blocks by the US. The US is behind nearly all the $289m of contracts delayed by the sanctions committee, which has received $1.7bn of contracts. These delays were ostensibly intended to prevent transfer to Iraq of dual-use technology that could be adapted for military purposes. "Washington doesn't want to enable the Iraqi economy to recover, therefore it keeps the infrastructure very weak," a UN diplomat said. However, Iraq is the US's second biggest Middle Eastern oil supplier after Saudi Arabia, making Washington uneasily dependent on Iraq's steady oil flow. Using this influence as an oil provider, as well as the ties it has developed with US business, Iraq has tried to acquire lobbying power in the US. Despite the US business ties to Iraq, however, fear of official US disapproval of contacts with Baghdad has also prompted one US ally - Japan - to do its trade through third parties. Tomen, the Japanese company supplying industrial transport equipment to Iraq, submits its contracts through its French subsidiary, Tomen France. US companies have themselves been among those which have suffered from the US practice of blocking contracts. But they have an edge when it comes to arguing for the approval of their contracts, diplomats say. By temporarily dropping their guise as European companies, they have managed to reverse the blocks by going directly to US officials, rather than having their case argued by the European mission on behalf of their subsidiary. At least two US companies have recently managed to reverse Washington's objections over their contracts. In an exchange of letters between company officials and one UN mission, seen by the FT, it became clear the US companies had resolved its case directly with Washington. Few non-US companies have been able to exercise similar influence. THIS IS A REACTION TO THE ABOVE STORY PB: http://biz.yahoo.com/prnews/001103/dc_njdc_on.html * CHENEY BROKE HIS WORD ON DEALING WITH IRAQ WASHINGTON, Nov. 3 /PRNewswire/ -- An article appearing yesterday on the Financial Times Internet site indicates that between September 1998 and last winter, GOP Vice Presidential candidate Dick Cheney -- as CEO of Halliburton, a leading oil service company -- oversaw $23.8 million of business contracts that were submitted for United Nations approval for the sale of parts and equipment to Iraq through two Halliburton subsidiaries, Dresser-Rand and Ingersoll-Dresser Pump. The article reports that the value of the contracts with Iraq by Halliburton's subsidiaries totaled more than any other US company, and that the ``vast majority'' of the contracts were approved by the UN sanctions committee. Although Halliburton sold its stake in Dresser-Rand in February 2000 and in Ingersoll Dresser Pump in December 1999, Mr. Cheney told ABC's This Week program in August that his company had no dealings with Iraq during this period, through subsidiaries or otherwise. On Sunday, August 6th, 2000, Mr. Cheney had the following exchange with ABC's Sam Donaldson: Donaldson: I'm told and correct me if I'm wrong, that Halliburton, through subsidiary companies, was actually trying to do business with Iraq? Mr. CHENEY: No. No. I had a firm policy that I wouldn't do anything in Iraq even -- even arrangements that were supposedly legal. What we do with respect with Iran and Libya is done through foreign subsidiaries totally in compliance with US law. DONALDSON: It's a way around US law. Mr. CHENEY: No. No. It's provided for us specifically with respect to Iran and Libya. Iraq's different, but we've not done any business in Iraq since the sanctions were imposed and - and I had a standing policy that I wouldn't do that. On August 27th, Mr. Donaldson again asked Mr. Cheney on This Week, ``All right. So you -- you continue to say that you had not dealt with Iraq while you were CEO of Halliburton, is that correct?'' Mr. Cheney replied, ``That's correct,'' but then added to the contrary, ``When we took over Dresser, we inherited two joint ventures with Ingersoll-Rand that were selling some parts into Iraq ...'' ``The Financial Times article indicates that Mr. Cheney was either lying to ABC on August 6th about doing business with Iraq, or the burden is on him to make the difficult argument that he was unaware that he was doing major business with Iraq,'' said Ira N. Forman, Executive Director of the National Jewish Democratic Council. ``Either way, it is unthinkable that Mr. Cheney would have been profiting from doing business with a pariah nation like Iraq, which repeatedly hurled Scud missiles at Israel. It makes a damning statement about either Mr. Cheney's veracity or his character that when it comes to doing business with Iraq, he would just proceed with business as usual. This entire episode raises serious questions about Mr. Cheney's priorities and his truthfulness.'' SOURCE: National Jewish Democratic Council http://www.ctnow.com/scripts/editorial.dll?bfromind=479&eeid=3372605&eetype= article&render=y&ck=&userid=206553684&userpw=.&uh=206553684,2,&ver=2.11 * ADDRESSING IRAQI SANCTIONS Hartford Courant Editorial , November 03, 2000 At the very least, The Hartford Courant's recent four-part report examining the impact of economic sanctions on different facets of Iraqi life provided a disquieting picture. The series presented a tableau of destitution, disease and death. Its horrifying images of children, women and men caught in the tragic trap of sanctions cannot be easily ignored. Sanctions have not had the desired effect, which is to undermine Mr. Hussein's regime by making the suffering Iraqi people rise up against him. To the contrary, the tyrant has used the sanctions, as has Fidel Castro in Cuba, to convince compatriots that America is the cause of their suffering. Various international organizations have long argued that Iraqi citizens, especially women, children and the elderly, are bearing the brunt of the sanctions. Malnutrition and disease are having a devastating impact. Infant-mortality rates have soared. Economic and diplomatic sanctions imposed by the United Nations work only if governments abide by them. This is no longer the case with the U.N. embargo of Iraq. Government after government has been bypassing the sanctions, the latest being Aeroflot, the Russian airline, which will soon resume flights to Baghdad. So will airlines from European countries and many Arab and Muslim countries. Before long, trade links are likely to be established as well. After all, the United States already buys about $1 billion of Iraqi oil a year. Saddam Hussein's regime is allowed to export a limited amount of petroleum. The regime is supposed to use the income to buy food and medicine for Iraqis. Given the unintended tragic effects of the sanctions, the case for maintaining the status quo is difficult to make. The Clinton administration has championed retaining the embargo, which started a decade ago. Whoever wins the presidential election Tuesday is likely to stick with the same old policy, even while the rest of the world continues to open links with Iraq. Recognizing reality does not mean that the United States has reversed its dislike of Mr. Hussein's policies. But there is more than one way to pursue a policy of persuading Iraqis to liberate themselves from Mr. Hussein. Intelligence agencies have myriad ways to monitor Iraq's arms production, stockpiling and deployment. Keeping a careful eye on Mr. Hussein should not hinge on having inspectors on the ground looking into every building and under every rock. Unless Mr. Clinton and his successor are willing to remove Mr. Hussein by force, they should stop punishing the Iraqi people for the transgressions of the despotic leader. Sooner or later Mr. Hussein will get his comeuppance, as most dictators do. The sooner the embargo ends, the sooner Iraqis will feel the liberating winds of trade and commerce, and give Mr. Hussein the Milosevic treatment. [LIST MEMBERS HAVE ALREADY BEEN GIVEN DETAILS OF THE HARTFORD COURANT ARTICLES, BY "IRIS-AUTHOR" WHPO GIVES AS REFERENCES: Iraq Resource Information Site http://www.geocities.com/iraqinfo American Intifada http://www.egroups.com/group/American_Intifada Here are some further details: http://www.ctnow.com/scripts/editorial.dll?recid=1951&action=Preview&breques t=index&mstatus=0&ck=&userid=206553684&userpw=.&uh=206553684,2,&ver=2.11 BETWEEN SANCTIONS AND SADDAM A four-part series that looks at the showdown between the United States and Iraq, its disastrous effect on the Iraqi people, and where the escalating tensions may lead. STORIES BY MATTHEW HAY BROWN PHOTOGRAPHS BY BRAD CLIFT GRAPHICS BY GREG HARMEL * The Iraq Timebomb - 10/25/00 As he rides out his final months in office, President Clinton appears ready to leave Iraq much as he found it: with its people suffering, its neighbors fearful and its leadership defiant. The next president will inherit one of Clinton's most vexing foreign policy dilemmas. * U.N. Realizing Sanctions Not So Humane After All - 10/25/00 When the founding delegates to the United Nations met after World War II to draw up rules for the new international body, they envisioned economic sanctions as a humane alternative to military intervention for encouraging better behavior from recalcitrant governments. * Standoff Over Inspections Leaves Revamped U.N. Team In Limbo - 10/25/00 The United Nations team of disarmament experts is ready to resume inspections of Iraq's weapons programs, the destruction of which is a condition for the end of the U.N. embargo. But the government of Iraq, which says it no longer has nuclear, chemical or biological weapons or prohibited missiles, has barred inspectors from entering the country. * Stray Missiles, Shattered Lives - 10/24/00 Abdul-Rezak Jasim was sorting through the tomatoes, onions and potatoes, the only food available that day at the small market in this dusty desert hamlet 20 miles south of Basra, when he heard the sky rip open and felt the thud of the impact 100 yards away. * A Cat-And-Mouse Game, With Deadly Serious Rules - 10/24/00 Navy Lt. William Burns sits strapped into the cockpit of his F/A-18 Hornet, latched to the hydraulic shuttle that runs the length of the flight deck, and waits for the signal from the shooter. * Without Medicine And Supplies, The Children Die - 10/23/00 The cranky ring of the old telephone startles Dr. Faris Abdul Abbas awake. He glances at his watch. It's just past midnight, the dark beginning to a new day at Basra Maternity and Pediatrics Hospital. * After Desert Storm: Cancer In The Garden Of Eden - 10/23/00 Athel Ahmed Ali was playing soccer for her middle school team here in the Garden of Eden when she first felt the soreness in her legs. * A Society Savaged - 10/22/00 The wide-ranging economic embargo intended to force Iraqi President Saddam Hussein to comply with weapons inspections has reduced a once-vibrant nation of 24 million to a daily struggle to survive. While the United Nations and Saddam exchange blame, sanctions are bleeding the life from Iraq. * 'Butcher of Baghdad' Gets Richer, Stronger - 10/22/00 More than a decade after the United States began working to oust him, Saddam is still standing, still defiant, still threatening his neighbors. * Not Enough To Halt Malnutrition, Disease And Death - 10/22/00 The U.N. oil-for-food program is a lifeline for millions of families in Iraq, where more than half the population has dropped below the poverty line, but it's still not enough to prevent widespread malnutrition, disease and death. http://www.dawn.com/2000/11/04/top18.htm * GUESSING GAME ABOUT FUTURE US SET-UP by Tahir Mirza, Dawn (Pakistan), 04 November 2000 WASHINGTON, Nov 3: A guessing game is going in Washington's diplomatic community as to the possible US foreign policy and security council set-up, in the next US administration. Republican candidate, Texas Governor George Bush, already has a fairly identifiable foreign policy team-in-waiting, but his Democratic opponent, Vice-President Gore, has been relying so far on his own experience in foreign affairs, with advisers largely kept in the background. The key foreign policy figures in a future Bush administration are not in doubt; speculation is largely centred on who will be what. The betting is strongly in favour of retired General Colin Powell as Bush's Secretary of State with another African-American, Dr Condolezza Rice, a former Stanford University academic, as the National Security Adviser. However, it is doubtful if Mr Bush will want two African-Americans occupying the two critical foreign policy slots, and if elected president, he may, therefore, fill in one of the posts from among his other advisers. Among these are said to be Paul Wolfowitz, a former assistant secretary of state, Richard Armitage, former secretary of defence, and Steve Hadley, a former assistant secretary of defence, one of whom may also become defence secretary in a Bush administration. Mr Hadley was in defence when Mr Bush's running mate, Mr Richard Cheney, was defence secretary, and the latter himself will no doubt figure prominently in foreign affairs and defence in a Bush administration. Mr Bush has also been getting advice from such heavyweights as Henry Kissinger and George P. Shultz. The Gore campaign has reportedly been drawing heavily upon input from the present US ambassador to the UN, Richard Holbrooke, who could easily become secretary of state if the vice-president gets elected. Mr Gore has also been getting regular briefings from an array of academics and think-tankers. Among the names mentioned in this context are those of former senator George Mitchell, former senator Sam Nunn, former Congressman Lee Hamilton, ex-US envoy to China James Sasser and Laura Tyson, previously head of the National Economic Council. But the person to watch may be Leon Fuerth, the present national security adviser to the vice-president, who has been close to Mr Gore for over two decades. Mr Fuerth is described as a non-proliferation-wallah, a low-profile career civil service official. Mr Holbrook, on the other hand, has often sought to hog the limelight and has never been averse to seeking or getting publicity. For his secretary of defence, Mr Gore may select former secretary of the navy Richard Danzig, current deputy secretary of defence Rudy DeLeon or Representative Norman Dicks. Several persons advising the Gore and Bush campaigns have experience of working with Pakistan and have a close understanding of South Asian issues. But it will be wrong to put too much emphasis on a change of course if Mr Bush wins: the United States has a history of consistency and continuity in its foreign policy in major areas of American strategic doctrine. However, nuances can and do change. For instance, the Republicans have been advocating a less-interventionist role abroad and may be less concerned with the domestic politics of other countries. Mr Gore, on the other hand, is a keen advocate of "nation-building" and linking foreign policy to human rights and democracy. The Republicans have been opposed to signing the CTBT, and if they win the White House, the pressure on this account on Pakistan (and India) may ease or the issue may, for the time being, become an irrelevant factor in US-South Asia ties. A bemused diplomat points out that on the CTBT, there is an apparent convergence of views between the Republican right wing and Pakistani rightists. Arab diplomatic circles recall that Governor Bush's father, the senior Bush, had close ties with "moderate" Arab states, and this policy may be continued in a second Bush presidency. Mr Gore could follow the recent example of President Clinton and might be more openly on the side of Israel. However, it is often conveniently forgotten here that it was the senior Mr Bush who had first helped President Saddam Hussein during Iraq's war of attrition against Iran, and then later ordered US troops into battle against the same Iraqi leader. -- ----------------------------------------------------------------------- This is a discussion list run by the Campaign Against Sanctions on Iraq For removal from list, email email@example.com Full details of CASI's various lists can be found on the CASI website: http://www.casi.org.uk