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Re: escrow account

Dear all
The CASI conference clarified some of the issues around the escrow account, but serious questions of fact remain (as I pointed out some time back in response to the NYT editorial). One overriding problem remains inherent in the escrow account however - the decisive role of the US and UK.
Currently the escrow account functions both as a Deduction Mechanism (for compensation and for ringfencing a steady stream of funding for the Kurdish autonomous zone); as an Import Approval Mechanism.
The way that the latter currently functions means that Iraqi oil revenues never reach the government-controlled areas (well, that's the theory anyhow), but Iraq instead receives commodities, not cash. This hinders linkages between the public and private sectors and greatly harms the prospects for reviving the economy, as is required for the solving of the humanitarian crisis.
There are proposals, we now know, for
1) the account to be used simply as a Deduction Mechanism, so that cash would be forwarded to the Iraqi Central Bank as soon as the deductions had been made for compensation and Kurdistan; and
2) for the Import Approval Mechanism to be made much less problematic - if all civilian goods except those on the official 1051 'dual-use' list were pre-approved/green list.
What we do not know is how these different proposals for the continued use of the escrow account would affect the economy, and therefore what humanitarian impact they would have.
However, as I pointed out before, any system which gives the US and the UK a potential stranglehold on the Iraqi economy - and the continued existence of the escrow account would seem to offer them this opportunity, puts the fate of the Iraqi people into the hands of two great powers who have shown a systematic and brutal disregard for the welfare of ordinary people in Iraq over the last decade.

Milan Rai
Joint Coordinator
Voices in the Wilderness UK
National Office
16B Cherwell St, Oxford OX4 1BG
Personal contact details
29 Gensing Road, St Leonards-on-sea TN38 0HE
ph 0845 458 9571 (local rate) pager 07623 746 462

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