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News, 3­9/6/01 (1)



News, 3­9/6/01 (1)

The following compilation brings us up to date, though there may be another
blip when I go off again on my travels in a couple of weeks time.

The most interesting thing in the present mailing seems to me to be the
behaviour of Turkey, Syria and Jordan. These are the targets of the present
US policy (or US and British policy if we wish out of politeness to pretend
that Britain has a policy).

The intention of Œsmart sanctionsı is to ensure that as much as possible of
Iraqıs income should pass through the escrow account, which Iraq is steadily
escaping with the help of its neighbours.  The co-operation of Turkey, Syria
and Jordan is essential to the US plan.

In this news mailing, however, we learn that Syria has declared that it will
not co-operate (even if it is embodied in a UNSC resolution?); and that
Jordan has formally instituted regular flights to Iraq (which already
existed informally) without waiting for the formal permission the new
proposals would have given it. But most interesting is Turkey. At the very
moment when they are receiving the Visitation of D. Rumsfield, they announce
their intention to open a new land passage with Iraq, which would bypass the
Kurdish north (and we learn that, now that the Kurdish Workers Party seem to
be defeated, they no longer need the Iraqi Kurds. So much for the Iraqi Kurd
policy, so much encouraged by the British, of sedulously co-operating with
the Turks against their own Turkish Kurd brothers)

Of course, all this may turn out to be just a matter of upping the price for
an eventual co operation. But I think there is something in Jim Hoaglandıs
argument given in our last mailing. They sense (and it doesnıt take a great
deal of sensitivity) that America wants off the hook, and why should they
risk Saddamıs displeasure if the Americans canıt be trusted, and all the
signs are that they canıt, to back them?


SANCTIONS REFORM

*  UN Council approves extension of Iraq oil-for-food [Most of the
information youıve already seen but it is reasonable summary of the story so
far ...]
*  Russia Questioning Premise of New Iraqi Proposals
*  Saddam Expecting Military Response

OIL POLITICS

*  Iraq says oil suspension to last one month
*  'Iraq can live without the oil-for-food deal'
*  Iraq to resume oil exports after defeat of "smart" sanctions
*  Russian oilman sees Iraqi ban on exports as bonus for Russia
*  Iraq's refusal to export oil rattles Opec's solidarity [Stratfor.com
makes point that the Iraqi stoppage is aimed not at the west but at the
countries nearest to it who will have to demand a high price for complicity
in the western scheme]
*  Iraqi oil trade flourishes, sanction-busting spans several countries
*  Saudi minister blames West for inflation

IRAQI/MIDDLE EAST AND ARAB WORLD RELATIONS

*  Saudis want Iraq match to be moved to Bahrain
*  First Omani minister to visit Baghdad since 10 years
*  Inter differences in the Baath party in Jordan
*  Group of Kuwaitis to file against [satellite TV station] Al-Jazeera
*  Saudis accuse Iraq of border incursion
*  Syria and the sanctions on Iraq [seems to be a formal declaration on the
part of Syria that they wonıt co-operate with the US/UK scheme]
*  Iraq Signs Free-Trade Agreement [yet another one. This time with Egypt,
Syria and Libya]
*  Iraq is not interested in better ties, says Iran
*  Iraqi Kurds expected for talks in Ankara soon
*  US rethinks containment of Saddam [excerpt from Stratfor.com on
likelihood of US turning towards Iran]
*  Jordan Resumes 2 Flights to Iraq [this time it seems to be formal]
*  Turkey to Open Second Border With Iraq
*  Turkish President Vows to Improve Ties with Iraq
*  Iran's voters give Khatami wide margin

AND, sent separately in News, 3-9/6/01

IRAQI/INTERNATIONAL RELATIONS

*  Nizar Hamdoun appointed at Iraq's new ambassador in Austria
*  S.Africa relief mission to Iraq coincides with diplomatic visit
*  Russia and Iraq sign emergencies pact
*  Pakistan emerges on wheat export map: Loading for Iraq begins today
[readers may remember that this follows on a series of stories about India
supplying Iraq then Iraq expressing dissatusfaction with the quality of the
wheat. Is there more to it than meets the eye?]

NO FLY ZONES

*  Rumsfeld: US Planes Face Bigger Danger in Iraq [Rumsfield in Turkey, an
odd place and an odd time to announce that theyıre running scared]
*  Coalition forces strike site in Iraqi no-fly zone
*  Iraq gains NATO military secrets [or more realistically, Iraq might have
gained some NATO military secrets from the Serbs. But on the other hand,
they might not ...]

INSIDE IRAQ

*  Human rights group expresses concern for journalists in Iraq

GENERAL COMMENT

*  The Worst Terrorist Is Still in His Palace [not G.Bush, but S.Hussein,
who might have been behind the Khobar Towers bombing in Saudi Arabia. On the
other hand, he might not. Interesting to note that energetic anti-Saddam
campaigner Laurie Mylroie Œwas Bill Clinton's advisor on Iraq during the
1992 presidential campaignı. She feels Bill let her down. As lots of people
are beginning to feel George is letting them down]
*  Bombers cite Iraq sanctions [Ramsay Clark testifying at the trial over
the 1998 US Embassy bombing in Kenya]
*  An appropriate welcome for Powell at Wits [University in South Africa.
Gives a list of reasons why Africans shouldnıt like the US]
*  Robert Fisk: All these cruel Muslim regimes abuse the people of the
Middle East [ŒIn Arab and Iranian homes, Muslim families exhibit infinitely
more compassion and love than Westerners. They don't send their elderly and
incurably sick to die in nursing institutions. The old and the fatally ill
spend their last days in their family homes, cared for to the end by
relatives. Shame on us. But how come the same men and women can stand on a
rooftop to scream at a woman strangling on a rope?ı]

SUPPLEMENT (sent separately)

In addition there is a long piece from the Saudi paper, Ain al-Yaqeen, which
gives a useful summary of how things look from the Saudi point of view,
denies that bombing raids are being allowed from Saudi territory (though
since they clearly approve of the raids it is hard to see why ­ well,
perhaps not very hard), draws attention to various Iraqi incursions into
Saudi territory and gives the full text of the recent UNSC resolution
(hailed by the Americans as a fine example of rebuilding consensus - a
consensus in indecision) and a summary of the latest UN Secretary Generalıs
report.


SANCTIONS REFORM

http://www.timesofindia.com/030601/03mide5.htm

*  UN COUNCIL APPROVES EXTENSION OF IRAQ OIL-FOR-FOOD
Times of India, 3rd June

UNITED NATIONS: In a rare show of unity, the UN Security Council on Friday
extended the Iraq humanitarian program for a month to give itself time to
revamp decade-old sanctions against Baghdad.

A resolution, approved by a 15-0 vote, would roll over the UN-Iraq
"oil-for-food" program, which expires on Sunday, for 30 days instead of the
usual six months.

This would allow council members to continue negotiations on a new
U.S.-British plan to lift restrictions on civilian goods imported by Iraq
but tighten controls on military-related supplies and smuggling.

In a surprise move, the United States announced it would release nearly $800
million of the more than $3.5 billion worth of contracts to Iraq it has
blocked at the United Nations -- meeting a prime demand of Russia as well as
UN officials. This is in addition to $400 million released last week.

"We have been reevaluating them in light of the new system which we are
advocating and proposing and we are looking at the holds through that
filter," U.S. Ambassador James Cunningham told Reuters.

Russia and United Nations officials have criticised the United States for
years on the large number of "holds" it placed on the Iraqi contracts. But
Cunningham said the releases were not in exchange for getting Moscow's
agreement on Friday's resolution.

Iraq has threatened to cut off oil sales if the council approved the short
extension but said Baghdad would honour all oil contracts signed to date.

However, council members, including Iraq's closest allies, went ahead
anyway, apparently unconvinced that Baghdad's move would have an immediate
impact on oil markets.

Iraq has nearly 300 million barrels of oil, equivalent to about 150 days of
its current exports, allocated in contracts under the UN program that have
not yet been delivered.

Friday's resolution to extend the oil-for-food plan for 30 days "expresses
its intention" to consider new arrangements that would "improve
significantly" the civilian goods that Iraq can import, ban military-related
items and prevent Baghdad from selling oil outside the UN system.

The oil-for-food program, which the United States and Britain want to
revamp, is an exemption to stringent sanctions imposed when Iraq invaded
Kuwait in August 1990.

It allows Iraq to sell oil with the proceeds going to a UN escrow account
out of which the United Nations pays suppliers of goods ordered by Iraq. The
escrow account would stay in place under the U.S.-British proposals, thereby
denying Iraq free use of its oil revenues.

The rare agreement on Iraqi policy came after meetings in Budapest, Hungary,
on Tuesday and Wednesday between U.S. Secretary of State Colin Powell and
Moscow's Foreign Minister Igor Ivanov as well as their British and French
counterparts.

Before that Russia flatly rejected the Anglo-American plan and wanted a
six-month rollover of the oil-for-food program. Its opposition, backed by
China, forced Washington to call off a vote to revamp the sanctions it
wanted this week.

"It's very unusual to have a resolution of some controversy passed on Iraq
with unanimity in the council," British Ambassador Sir Jeremy Greenstock
said, adding that negotiations among experts would begin in earnest on
Monday.

Russia, China and France, have been sympathetic to Iraq and openly split
with the United States and Britain for at least four years. The five
countries are the Security Council's permanent members with veto power.

It is by no means clear Russia will support the complicated U.S.-British
proposals next month. Russia's UN ambassador, Sergei Lavrov, said on
Thursday the measures "entered into areas not covered by the sanctions."

The core of the dispute is a lengthy U.S.-British list of "dual use" goods
that have both military and civilian applications. Iraq would be barred from
buying them without council approval.

Obstacles are also expected to arise over controversial U.S.-British
proposals that involve cooperation from Iraq's reluctant neighbours Jordan,
Turkey and Syria.

These include regulating illegal trade, monitoring Iraq's land and sea
borders against smuggling and sifting through a list of oil traders to
eliminate shadowy firms paying Baghdad a surcharge on oil sales outside of
the UN system.

The Iraqis have threatened to punish Jordan and Turkey by denying them oil
if they cooperate with the United States and council members are seeking
ways to compensate those countries.

However, when the trade sanctions were imposed in 1990, Jordan was allowed
to circumvent the sanctions and receive oil directly from Iraq because the
big powers could not come up with resources to make up its losses. (Reuters)


http://dailynews.yahoo.com/h/nm/20010608/wl/iraq_un_sanctions_dc_1.html

*  RUSSIA QUESTIONING PREMISE OF NEW IRAQI PROPOSALS
by Evelyn Leopold

UNITED NATIONS (Reuters, 8th June) - Britain intends to submit an amended
text of its U.N. Security Council draft resolution to revamp sanctions
against Iraq, but Russia questioned the underlying premise of the measure.

Russian Ambassador Sergei Lavrov told reporters on Thursday the draft,
backed by the United States and revised somewhat by France, did not tackle
fundamental problems of how the U.N. Security Council should suspend
decade-old Iraqi sanctions.

He said a December 1999 resolution, which outlines requirements to get the
embargoes suspended, had too many gaps.

``The eventual goal is to suspend sanctions and the resolution leaves things
unsolved,'' Lavrov told reporters.

It was not immediately clear whether Russia would try to amend the
U.S.-British plan or abandon it altogether. Diplomats said its negotiators
had not engaged seriously in discussions on the resolution this week,
apparently awaiting instructions from Moscow.

At issue are U.S.-British proposals that would ease controls on civilian
goods imported by Iraq but tighten restrictions on military-related supplies
and smuggling.

The plan is a revision of the oil-for-food program, an exception to the
sanctions imposed in August 1990 when Iraq invaded Kuwait. That program
allows Iraq to sell oil and order food, medicine and other goods under U.N.
supervision.

It was renewed for one month last week in hopes that the new measures could
be adopted by July 3.

A new text, expected to be circulated early next week, includes some
proposals from a French rival draft.

France also wants foreign companies to be able to invest in Iraq's civilian
sector, including its oil industry. But British Ambassador Sir Jeremy
Greenstick said oil sector investments would be ``controversial.''

He noted that they would have to come in the context of the December 1999
Security Council that linked an easing of sanctions, including investments
in Iraq's oil industry, to Baghdad's cooperation with U.N. weapons
inspectors.

The arms experts have not been allowed in the country since they left on the
eve of a U.S. British bombing raid in December 1998.

However, Greenstick said other foreign investments might be feasible. ``For
instance, the council I know is interested in the education, health and
agricultural sectors which are so important for fundamental living in
Iraq,'' he said.

Ireland and Tunisia, among others, were in favor of France's proposal while
the Netherlands, not on the council this year, had distributed a memorandum
to members urging that oil industry investments be allowed.

Iraq, in protest against the entire revision of the sanctions, halted oil
exports on Monday. Baghdad wants the embargoes lifted or at least made
ineffective and objects to any system that would perpetuate them.

On Thursday Iraqi President Saddam Hussein urged Russia, as a permanent
council member, to use its veto power to kill the resolution.


http://dailynews.yahoo.com/h/ap/20010609/ts/iraq_un_1.html

*  SADDAM EXPECTING MILITARY RESPONSE
by WAIEL FALEH

BAGHDAD, Iraq (Associated Press, 9th June) - Iraq's rejection of a
U.S.-backed British proposal to overhaul U.N. sanctions is expected to lead
to a military confrontation, President Saddam Hussein said Saturday.

Saddam did not mention who the confrontation would be with, but in remarks
delivered at a Cabinet session, it was clear he was referring to the United
States and Britain.

``We are approaching a new confrontation ... We must be prepared for it,''
Saddam said. His remarks were broadcast by state-run television.

``It is necessary to let our people know the details ... the whole truth,''
added Saddam. ``Then when the confrontation occurs, we will be victorious
because ... the battle is a battle of national independence.''

[.....]

Saddam called the proposal a ``new plot (that) is part of the tough battle
we are facing.''

``They want to break the morale of the Iraqis and colonize (Iraq) with new
means ... by controlling its resources and by preventing Iraq from
developing itself,'' Saddam said. ``The enemies change the names of the plot
from sanctions to smart sanctions then to arms control.''

Saddam said that if the aim of the United States and Britain is to prevent
Iraq from obtaining weapons, then ``why don't they issue a resolution
banning countries from exporting weapons to Iraq.''

``Then the issue will be over. ... Then they could punish any country that
violates this resolution,'' Saddam added.

[.....]


OIL POLITICS

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT39X55KKNC&liv
e=true&tagid=ZZZCWHK1B0C&subheading=energy%20%26%20utilities

*  IRAQ SAYS OIL SUSPENSION TO LAST ONE MONTH
by Toby Shelley in Vienna
Financial Times, 4th June

Taha Mousa, a senior official at the Iraqi oil ministry, said on arrival in
Vienna for Tuesday's Opec meeting that the suspension of Iraqi oil exports
of 2.1m barrels a day would last for one month. Exports ceased on Monday
morning.

He called on fellow Opec members not to raise their production ceiling of
24.2m barrels a day when they meet on Tuesday. He said that he did not
believe that other Opec members would raise their output to compensate for
Iraq.

Mr Mousa reiterated that Iraq wanted the UN Security Council to agree to
another full six month term of the existing oil-for-food export programme,
rather than the 30 day extension to the existing term that the UN agreed on
Friday, while the council considers US and UK proposals for a modified
sanctions regime that would tighten controls over oil flows out of Iraq.

A one month suspension of exports would fall between two positions Iraq has
appeared to hold in recent days. On Thursday Iraq's ambassador to the UN
said existing export contracts would be honoured, but no new ones signed.
Then on Saturday the Iraq news agency cited a senior oil ministry source
saying that exports were suspended from Monday and giving no timeframe for
their resumption.

By interrupting its exports for a period of a few weeks, Iraq would be able
to cause some disruption to the oil markets but minimise the risk of other
producers raising production to compensate.

Doctor Ali Rodriguez Araque, Opec Secretary General, late on Monday
downplayed the issue of Iraq. He said its suspension of exports was a
frequent problem posed by disputes over sanctions. But he declined to repeat
his belief of last month that a rollover of the production ceiling was
almost inevitable, saying only that it was one of the possibilities.


http://www.timesofindia.com/040601/04mide4.htm

*  'IRAQ CAN LIVE WITHOUT THE OIL-FOR-FOOD DEAL'
Times of India, 4th June

BAGHDAD: Iraq can live without the oil-for-food deal and will take measures
against countries that accept the smart sanctions proposal, the country's
ruling party newspaper said on Sunday, one day after Baghdad announced it
will halt all Iraqi oil exports on Monday.

In a front page editorial, Al-Thawra said Iraq lived six years between 1990
and 1996 without this "lame program which covered only a small portion of
Iraq's needs."

Baghdad's stance follows its decision Saturday to halt all crude oil exports
on Monday as of 8 a.m. (0500 GMT). The decision was in reaction to the U.N.
Security Council's decision Friday to extend by one month the U.N.
oil-for-food deal.

The extension is designed to allow the United States and Britain more time
to get Security Council backing for their so-called smart sanctions
proposal.

The U.N. oil-for-food plan was set up in 1996 to help ordinary Iraqis cope
with the effects of U.N. sanctions imposed to punish Iraq for its 1990
invasion of Kuwait.

"The Americans and the British are mistaken if they think that Iraq cannot
live without this (oil-for-food) program and, consequently, it will accept
anything imposed on it," Al-Thawra said.

The daily warned that "all countries should care for their national
interests which shall be damaged if those countries get involved in the
American-British game," adding Iraq would take "whatever necessary measures"
against countries supporting the smart sanctions proposal.

Iraq has warned neighbours Jordan, Syria and Turkey that it would halt oil
supplies to them if they accepted the sanctions proposal.

"Iraq halted its oil exports and it is prepared to face the worst
possibilities," the daily added.

Saudi Arabian Oil Minister Ali Naimi said Saturday the Organisation of the
Petroleum Exporting Countries was ready to cover any shortfall in world oil
production following Iraq's decision to halt exports. Other OPEC nations are
pumping at top capacity, but Naimi said Saudi Arabia alone is capable of
covering any shortage.

It was not clear how long the Iraqi halt of oil exports would last.

Iraq's Al-Ithad weekly said on Sunday that the Oil Ministry's senior
undersecretary, Taha Humud Musa, will head a high-level Iraqi delegation to
OPEC's two-day meeting in Vienna starting Tuesday.

Turkey's state-run BOTAS pipeline company said Iraq had stopped pumping
crude oil at around 4 a.m. (0100 GMT) Saturday. It was not clear if the
pipeline from northern Iraqi fields to the Turkish Mediterranean port of
Ceyhan ran dry as a result of the Iraqi decision. The semiofficial Turkish
Anatolia news agency quoted officials as citing "insufficient production and
a drop in stocks" as reason for the halt.

Baghdad is opposed to the London-proposed and Washington-backed smart
sanctions proposal, that aims to allow free flow of civilian goods into Iraq
except for items that appear on a U.N. list of military-related items.

It also permits commercial and cargo flights in and out of Iraq as long as
they are inspected at their departure points. It is designed to tighten
border controls around Iraq and to curb oil smuggling and illegal Iraqi
surchages.

Iraq produces about 3.2 million barrels of oil per day, of which about 2
million barrels per day has been exported under the U.N. oil-for-food
program. Iraq, which has the world's second-largest oil reserves, also pumps
for domestic consumption and under a separate, U.N.-accepted arrangement for
supplying oil to neighbouring Jordan. (AP)


http://www.timesofindia.com/060601/06mide5.htm

*  IRAQ TO RESUME OIL EXPORTS AFTER DEFEAT OF "SMART" SANCTIONS
Times of India, 6th June

BAGHDAD: Iraq will resume UN-supervised oil exports once US and British
efforts to impose "smart" sanctions have been defeated, oil minister Amer
Rashid said on Tuesday.

"We have full confidence that countries which harbour no hostile intent
against Iraq will thwart the American-British project," Rashid said during a
visit to the oil region of Kirkuk in the north of the country.

"Afterwards, Iraq will be able, without delay, to resume exports of its
crude" from the UN authorised outlets of Ceyhan in Turkey and the Mina
al-Baqr terminal in the northern Gulf, he said, quoted in newspapers.

Baghdad's official press, meanwhile, charged that Saudi and Kuwaiti offers
to compensate for Baghdad's suspension of most oil exports were aimed at
clearing the way for smart sanctions.

"The governors of Saudi Arabia and Kuwait, due to their allegiance to the
United States, are trying to prepare the ground for the implementation of
'stupid' sanctions," said Al Qadissiya.

"Since all the US-British fuss over these stupid sanctions, the governors of
Riyadh and Kuwait have kept on repeating their readiness to compensate for
losses to Iraq's neighbours by the halt to Iraqi crude exports," it said.

Al-Iraq, another daily, said the offers were "dictated by the United States
in an effort to foil any Iraqi decision".

The absence of Iraqi crude from the world market "can not be compensated by
Saudi Arabia or any other oil producer", it said, forecasting a "crisis" on
the oil market.

Iraq on Monday halted for at least one month more than two million barrels
per day of exports under the UN oil-for-food programme in protest at
British-US plans to impose a new system of sanctions.

Baghdad has been under embargo since the 1990 invasion of Kuwait.

Britain, with US backing, has put forward a draft resolution that would
abolish the embargo on civilian trade with Iraq, while tightening a weapons
ban and controls on smuggling outside the oil-for-food deal.

Rashid has clarified that oil exports delivered by tanker-trucks to Jordan
and Turkey outside the confines of the UN programme would not be affected by
the suspension.

World crude prices moved upwards after the Iraqi move, although they
appeared tempered by assurances from a meeting of OPEC oil ministers in
Vienna that it would meet any shortfall.

Saudi oil minister Ali al-Nuaimi on Tuesday downplayed fears of any
long-term impact. "I can assure you there will be no shortage in the
market," he told reporters. (AFP)


http://hoovnews.hoovers.com/fp.asp?layout=displaynews&doc_id=NR20010606670.2
_5f680005c84be142

*  RUSSIAN OILMAN SEES IRAQI BAN ON EXPORTS AS BONUS FOR RUSSIA
Hoovers, June 6, 2001
Text of report by Russian Ekho Moskvy radio on 5 June

[Presenter] In spite of Iraq's decision to stop exporting oil to the world
market, the OPEC member states will not increase output and, if need be,
will share out Iraq's quota amongst themselves, so as to prevent a real
shortage of oil on the market. Such is the outcome of today's OPEC summit in
Vienna.

Following Iraq's decision to stop oil exports, Russia has a real chance of
taking its place on the market. The head of the Russian Fuel Union, Sergey
Borisov, expressed this view in a live interview with our radio station.

[Borisov, voice] If we take Iraq's niche now, and if our oil companies, our
Energy Ministry and all our government commissions turn their attention to
making money, this can happen because many European refineries, where Iraq's
oil usually ends up, are geared to high sulphur oil, the so-called heavy
oil. Our Urals oil and Iraq's Kirkuk oil are very similar in composition.
So, it would of course be logical for us to occupy this niche. But, if we
now rush to make good the shortfall caused by the Iraqi decision to stop oil
exports, we may neglect our own market.

[Presenter] The head of the Russian Fuel Union predicted that an increase in
prices and an inevitable surge in inflation would be unavoidable if the
export peak coincides with the end of summer and the beginning of autumn
when demand for oil products in Russia traditionally increases.


http://atimes.com/global-econ/CF06Dj01.html

*  IRAQ'S REFUSAL TO EXPORT OIL RATTLES OPEC'S SOLIDARITY
STRATFOR.COM's Global Intelligence Update, Jun 5, 2001

Summary

Iraq halted oil exports on June 4 to protest the United Nations' decision to
renew the oil-for food sanctions program for one month instead of the
customary six. Iraq's move is not intended to pressure its perennial foes,
Britain and the United States, but to scare Iraq's neighbors into rejecting
the new US-British sanctions proposals. The Iraqi cut-off will reverberate
beyond the region and shake Opec solidarity to the core.

Analysis

Iraq's decision to halt oil exports mirrors similar incidents in 1999 and
2000, when Baghdad engaged in an on-again, off-again export
reduction-and-suspension program that kept the oil markets off balance for
several months. But while prices did edge higher, they did not skyrocket.

They will rise even less this time around. The Organization of Petroleum
Exporting Countries (Opec) has enough spare capacity to cover any Iraqi
shortfall, and Iraq's actions won't affect US pump prices either. High
gasoline prices result from inadequate refinery capacity and low stocks; for
now, crude supplies remain adequate.

Instead of targeting Britain and the United States directly, Baghdad is
instead taking aim at a new UK-US sanctions proposal by placing pressure on
its Arab neighbors. The two Western states are advocating an alternate
sanctions regime that would more specifically target the Iraqi government.
The United Nations may be forced to make the new proposals possible, and
Opec will experience heavy damage to its solidarity.

Under current sanctions, Iraq's oil income flows into a UN-managed fund from
which each withdrawal must be approved to prevent Iraq from purchasing
military supplies. The new "smart sanctions" regime would allow Iraq
unrestricted trade in all civilian goods but would impose stringent
restrictions on military-use goods. The new system would require close
cooperation with three states that border Iraq (Jordan, Syria and Turkey) to
allow close monitoring of Baghdad's imports.

These states are the true targets of the Iraqi cutoff. Jordan gets virtually
all of its oil from Iraq, and while Iraq says that for now it will continue
exporting to Jordan, Amman can't help but be nervous about its twitchy
neighbor. Syria, after 20 years of harsh relations, managed only last year
to reopen an Iraqi pipeline to supply its refineries; that line is now under
threat. And before the Persian Gulf War, 1.5 million barrels of Iraqi oil
flowed each day through a pipeline that crossed Turkish territory to the
Mediterranean port of Dortyol.

The post-Gulf War sanctions regime locked down the pipeline, depriving
Turkey of billions in transit income. Like the Syrian line, regular use of
the Dortyol line resumed only last year when spiraling crude prices prompted
the United Nations to allow Iraq to export as much oil as it wanted. Iraq
ceased using that line on June 4.

The oil threat is one Iraq can hold over its neighbors' heads for some time.
The oil-for-food fund is overflowing with petrodollars after the United
Nations lifted export restrictions last year. And Iraq isn't cancelling all
of its exports - just the UN-monitored ones. Smuggling by tanker and truck,
to the tune of 800,000 barrels per day, continues uninterrupted. Income from
these activities flows directly to Baghdad, circumventing the United
Nations.

If the United Nations is going to get local support for its smart sanctions
policy, it must first offer something to Jordan, Syria and Turkey to
outweigh the damage Iraq can cause.

Turkey's demands will be simple but expensive. Turkey is in the midst of an
economic crisis, and needs cash, whether it be in the form of IMF loans or
debt forgiveness. Jordan and Syria's requirements are much more politically
sensitive; Washington may need to moderate its support of the Sharon
government in Israel. Washington may find this price tag too high, and smart
sanctions will have substantial holes if they even work at all.

Iraq's export cutoff will have an impact beyond just annoying the West and
scaring its neighbors. Although Iraq is one of 11 Opec members, while it is
bound by UN sanctions, it can produce as much oil as it wants. So from the
viewpoint of certain Opec members, the cutoff, which will remove 2.2 million
barrels per day from global supply, provides a hard-to resist opportunity to
increase oil prices.

At the June 5 Opec summit, some Opec members, particularly Venezuela, which
has made no secret of its desire to send prices as high as possible, will
want to leave production steady. Others, such as Saudi Arabia, will argue
for a production increase.

Those wanting an increase will win this round. Saudi Arabia has enough spare
production to single-handedly replace Iraqi oil, and stepping into the void
would ingratiate the Kingdom with its security guarantor, Washington. There
are already hints that Saudi production is on the uptick. Others will go
along with Riyadh so that it doesn't glean all of the extra profits.

But the damage to Opec solidarity is already done. The Iraqi cut-off has
Opec members second-guessing each other. All have a bit of excess capacity
and all know they will pump more to take advantage of Iraq's withdrawal
regardless of the official Opec stance. This unravelling of confidence will
continue as oil prices drop in reaction to the developing global economic
slowdown, darkening Opec's collective future. For if Opec members cannot
cooperate at a time when none are threatened economically, they will find it
that much harder to engineer production cuts once prices truly fall.


http://news.excite.com/news/cp/010609/16/iraqi-oil-trade

*  IRAQI OIL TRADE FLOURISHES, SANCTION-BUSTING SPANS SEVERAL COUNTRIES

EDTHABUR, Turkey (Associated Press, 9th June) - More than 100 flatbed trucks
haul huge canisters of Iraqi fuel into Turkey almost every day, part of a
massive operation that spans several countries and funnels an estimated $1
billion a year into Saddam Hussein's pockets.

The United States is pressing to crack down on that trade, which violates
U.N. sanctions. But at the bargain price that Saddam is offering his buyers,
the effort may be futile, Turkish oil transporters and analysts say.

"If they cut it one way, it will come out the other way," said Bulent
Aliriza, an analyst at the Washington-based Center for Strategic and
International Studies. "It is almost impossible to nail the door shut."

Ending the trade would hurt U.S. allies like Jordan and Turkey and devastate
the economy of an autonomous Kurdish enclave in northern Iraq, where the
revenue is one of its only sources of income.

Washington has long regarded the Kurds, who have fought Saddam for decades,
as key to any anti-Saddam coalition.

"The Americans are caught," said Ilnur Cevik, the editor-in-chief of the
Turkish Daily News. "The U.S., while trying to stop the border trade to
scuttle Saddam, has to allow the trade to help the Kurds."

If you cut the trade "you finish off the Kurds and the so-called
opposition," Cevik added.

The importance of the sanctions-busting trade to Iraq was highlighted
Monday, when Iraq announced that it was cutting off its U.N.-monitored oil
exports but would continue to ship to neighbours who pay the government in
violation of U.N. controls.

At Habur, the only border crossing between Iraq and Turkey, hundreds of
trucks laden with Iraqi diesel waited Tuesday in a 3.2-kilometre-long line.
In the first five days of June, 600 of the trucks crossed the border, said
Abdullah Erin, the official in charge of the gateway. Each truck carries
about 1,300 gallons.

"Iraq has a very successful program of sanctions-busting," said Toby Dodge
of the Royal Institute of International Affairs in London. "It's partially
how the regime gets its money."

Before the cutoff, Iraq sold some two million barrels per day under the
U.N.-monitored program, which requires that the money be spent on
humanitarian goods like food and medicine, and as reparation for Iraq's 1990
invasion of Kuwait.

Some 150,000 barrels a day flow through Syria, while another 100,000 barrels
of oil per day go to Jordan and Turkey, estimates Nathaniel Kern, an analyst
with Foreign Reports Inc., a Washington-based oil consultancy company.

Kern said Iraq charges around $16 US per barrel, a 30 per cent discount to
the price that the nation charges through the U.N. program. Traders said the
discount was not that great, but gave no figures.

The Turkish trade has been falling recently, but truckers and analysts say
that is due more to Turkey's economic crisis and complaints from oil
companies about unfair competition than due to any crackdown.

Syria denies that it is illegally importing Iraqi oil, saying that it is
only bringing in Iraqi crude to test an old pipeline from Iraq. Oil
analysts, however, say that Syria is importing Iraqi oil and masking those
imports by using the oil at home and exporting an equal volume of its own
oil.

Turkey emphasized its dependence on the trade, which is estimated to support
some 45,000 truck drivers in the southeast, when Prime Minister Bulent
Ecevit visited the region on Sunday and vowed to increase the trade.

"We know that the primary way to increase the region's income is the diesel
trade," Ecevit said in Sirnak, an impoverished town near the Iraqi border
where many of the truckers live. "We have decided to expand this, not narrow
it," Ecevit added.

Turkey claims to have lost $30 billion to $40 billion US in trade since
sanctions were imposed in 1990.

A new border gate is expected to be opened within two years, Foreign
Minister Ismail Cem said Thursday.

"If they close the border, we will die of poverty," said Yasar Evim, a
Turkish truck driver who hauls crude oil from an Iraqi refinery in Mosul.

He said he drives to Mosul each month to pick up the crude, which he must
deposit at a refinery owned by the Turkish government. Turkish businessmen
say they pay for the crude in bartered goods and not cash.

Diesel traders buy their fuel from the Kurds, who purchase it from Iraqi
refiners. Turkish truckers pay the Kurds about 45 cents a gallon for the
fuel, which they can sell at a government-owned depot for roughly $1.30 US a
gallon.

U.S. warplanes that patrol a no-fly zone over northern Iraq are based in
southern Turkey, and U.S. diplomats said that Washington is looking at ways
to tighten the sanctions without jeopardizing the border trade and angering
Turkey. The U.S. has tolerated the oil trade in the past because of its
benefits to Turkey and Jordan.


http://www.gulf-news.com/Articles/news.asp?ArticleID=19325

*  SAUDI MINISTER BLAMES WEST FOR INFLATION
Reuters, 9th June

Saudi Arabia's Foreign Minister Prince Saud Al Faisal said yesterday Western
governments - and not Opec oil producing countries - were responsible for an
increase in inflation.

In an interview with German television network Phoenix, Prince Saud, on a
visit to Berlin with Saudi Crown Prince Abdullah, said prices for oil from
Opec countries had been relatively stable for quite some time.

"Only the finance minister can fight inflation," he said. He noted that
finance ministries, such as in Germany, earned more through taxation on each
litre of petrol sold than oil exporting nations earned for each litre
produced.

German consumers have complained loudly in recent months about petrol prices
that have climbed to record high levels above 2.20 marks ($1.10) per litre
as oil prices have soared. About two-thirds of the price paid at the pump is
tax.

The government has blamed the increases on oil companies and the weaker
dollar, which raises import prices. Oil companies blame the German
government for annual tax increases on petrol. Germany's annual inflation
rate rose to a seven-year high of 3.5 per cent in May.

Opec is due to meet on July 3 to decide how to respond to Baghdad's recent
decision to suspend Iraqi oil exports in protest against UN sanctions, which
energy experts have warned could lead to  a sharp increase in oil prices if
not addressed.

Key Opec member Saudi Arabia has said it could increase its oil production
by two million barrels per day (bpd) within 30 days to make up for the Iraqi
shipments.


IRAQI/MIDDLE EAST AND ARAB WORLD RELATIONS

http://thestar.com.my/news/story.asp?file=/2001/6/3/sports/0350saud&sec=spor
ts

*  SAUDIS WANT IRAQ MATCH TO BE MOVED TO BAHRAIN
Daily Star (Bangla Desh), 3rd June

RIYADH: Saudi Arabia have refused to play an Asian World Cup football
qualifier in Baghdad and asked that the venue of a match against Iraq be
switched to Bahrain, newspapers reported on Saturday.

Prince Sultan bin Fahd, who heads the Saudi sports ministry, said the
request had been made to the Asian Football Confederation even before
Friday's draw in the second round of the Asian qualifiers pitted Saudi
Arabia and Iraq in the same group. Bahrain, Iran and Thailand also figure in
Group A.

"Saudi Arabia have chosen Bahrain (as the venue for the Baghdad leg) because
of the solid relations between the two countries," Prince Sultan said.

Jordan has offered to host the other leg.

Relations between Iraq and Saudi Arabia were severed during the 1991 Gulf
War when the kingdom fought alongside a US-led military coalition in
evicting Iraqi troops from Kuwait.- AFP


http://www.arabicnews.com/ansub/Daily/Day/010604/2001060408.html

*  FIRST OMANI MINISTER TO VISIT BAGHDAD SINCE 10 YEARS
Arabic News, 4th June

The Omani news agency said on Sunday said that the Omani minister of
commerce and industry Maqboul Bin Ali Bin Sultan will head today for Baghdad
in the first visit of its kind to be held by a member of the Omani
government to Iraq since the eruption of the Gulf war in 1991.

During his visit which will last for four days, the Omani minister will take
part in the meetings of the Iraqi- Omani joint committees which is being
held for the first time since 1989.

Worthy mentioning the two states hope to " sign the memorandum of
understanding aiming at establishing a free trade exchange area," similar to
the agreements Iraq has already signed with Egypt, Syria and Tunisia,
according to the Iraqi daily " Oman Observer" issued on Sunday.

In the year 2000 Oman exported commodities estimated at USD 20 million to
Iraq in the course of the " oil for food " program.


http://www.arabicnews.com/ansub/Daily/Day/010605/2001060510.html

*  INTER DIFFERENCES IN THE BAATH PARTY IN JORDAN
Arabic News, 5th June

The Jordanian weekly al-Majd said that lawyer Ahmad al-Najdawi, member of
the higher leadership in the Jordanian Arab socialist party, which is pro
Iraq, who is also the media spokesman and chairman of the said party's
culture and media bureau has recently given up working in the said party as
a result of a series of differences between him and certain members at the
party's higher leadership.

Party sources in Amman said that the main differences between al-Najdawi and
his opponents were with Akram al-Homsi who accused al-Najdawi in taking
separate track in running the party's newspaper, besides criticism made
against him because of the weakness in the paper's level.

The sources added that al-Najdawi submitted his resignation from the party's
higher leadership and asked to be exempted from all his party tasks and
stayed at his house, while the leadership decided to stop issuing al-Baath
news paper for two months until a new commission is formed to be supervised
by its under the chairmanship of the party's secretary Teiser al-Homsi.

The sources stressed that a series of failures the Jordanian Baath party
suffered from since 1997 and ended with quitting several of its cadres, had
attracted the attention of Baghdad and this obliged the party's national
leadership in Baghdad to summon some 11 Jordanian leading Baathist figure to
learn from them about incidents inside the Baath Party ranks in Jordan.


http://www.cnn.com/2001/WORLD/meast/06/05/kuwait.al.jazeera.ap/index.html

*  GROUP OF KUWAITIS TO FILE AGAINST AL-JAZEERA
CNN, June 5, 2001

KUWAIT (AP) -- A group of Kuwaitis is going to file a lawsuit in London
against the Arab world's most popular satellite TV station, demanding it pay
millions of pounds in damages for allegedly broadcasting remarks without
proof that Kuwaitis killed Iraqis and Palestinians with acid after the 1991
Gulf War, the group's spokesman said Tuesday.

In April, the same group of 22 private citizens won an identical case in a
Kuwaiti court that ordered Qatar's Al-Jazeera all-news TV channel to pay a
preliminary compensation of 5,001 dinars ($16,230).

In a talk show broadcast from the British capital in August, host Sami
Haddad said on the air that according to some reports, "hundreds of Iraqis,
Palestinians and some Kuwaitis ... were dissolved in acid," at the end of
the war that liberated Kuwait from a seven-month Iraqi occupation.
Palestinian leader Yasser Arafat sided with Baghdad in that conflict.

Lawyer Salah al-Hashem, member of the group and its attorney, said he has
been in contact with a British lawyer who informed him Monday that the group
had a "good case and that damages could reach 10 million pounds."

Al-Hashem declined to name the lawyer, but he said he was traveling to
London next week.

Al-Hashem said Al-Jazeera has not appealed the April ruling by the Kuwait
court, and the station now has one week to pay the damages ordered. If it
doesn't, its office in Kuwait will be auctioned, the lawyer said.

Mohammed Jassim al-Ali, Al-Jazeera's general manager, told The Associated
Press Tuesday that the station has "not been officially informed of the
lawsuit (in Kuwait) and we didn't receive any notice to appear in court." He
said the station has hired a team of lawyers to handle the case.

If the British court awards the group compensation, the money will go to
charities and to the families of some 600 Kuwaitis and other nationals who
have been missing since the Gulf War, al-Hashem said. Kuwait accuses Baghdad
of holding the missing in jails, but Iraqi officials insist they have
released all war prisoners.

Launched in 1996, Al-Jazeera quickly became the most popular news station in
the Arab world, where most media outlets are state-owned. The station has
irked many Arab governments with its critical reports and presentations of
controversial issues.

Most Kuwaitis feel Al-Jazeera is biased toward the Iraqi leadership. Two
years ago, Kuwait banned the station from reporting from the emirate after
an Iraqi caller in a live show insulted Kuwait's emir, Sheik Jaber Al Ahmed
Al Sabah. The ban was lifted after one month and the station has since
opened an office here.


http://news.bbc.co.uk/hi/english/world/middle_east/newsid_1372000/1372394.st
m

*  SAUDIS ACCUSE IRAQ OF BORDER INCURSION
BBC, 6th June

Saudi Arabia has accused Iraq of launching an unprovoked attack on Saudi
territory which left at least one Iraqi soldier dead and several Saudis
wounded.

According to the Saudi ambassador to the United Nations, Fawzi Bin Abdul
Majeed Shobokshi, an Iraqi patrol crossed the border three weeks ago and
opened fire on a border patrol. Saudi troops returned fire.

The ambassador, in a letter to the UN Security Council, said that the
incident was not an isolated event - there had been about a dozen other such
incidents since March this year.

The ambassador called on the council to ask Iraq to stop its incursions.

For its part, Baghdad regularly accuses Saudi Arabia of violating its
borders by allowing Saudi-based American aircraft to bomb Iraqi targets in
the so-called no-fly zones in the north and south.


http://www.arabicnews.com/ansub/Daily/Day/010606/2001060608.html

*  SYRIA AND THE SANCTIONS ON IRAQ
Arabic News, 6th June

The London-based al- Hayat daily said in its Tuesday's issue quoting an Arab
source as saying that Syria is the only Arab country which will not
cooperate with the UN over the " smart sanctions" against Iraq, considering
that Damascus benefits from its trade relations with Baghdad.

The sources which the paper did not reveal his identity and described as
well-informed indicated that Syria tries to convince Iran at the meantime to
be open for the Iraqi oil in order not to bear by its own the American
pressures.

The same Arab source indicated that Iraq exports to Syria 100,000 barrels of
oil per day through the Syrian- Iraqi line.

The paper noted that Syria uses the Iraqi oil locally and increase its
exports of light oil.

Meantime, the paper quoted special information that the Iraqi foreign
minister Muhammad Saeed al-Sahaf and ambassador Nabil Najam ( from Iraq) had
visited Damascus last week and the Syrian official sources did not declare
the visit which came in the wake of the UN Security Council discussions of
the new sanctions against Iraq.

According to the paper, it was not learnt whether al-Sahaf had met with any
of the Syrian officials and if the visit aimed at coordinating stances on
dealing with the new sanctions system against Iraq.


http://www.voanews.com/article.cfm?objectid=4FB91E9B-5B70-11D5
841900508BF9712A&Title=Iraq%20Signs%20Free%2DTrade%20Agreement&CatOID=45C9C7
8D-88AD-11D4-A57200A0CC5EE46C

*  IRAQ SIGNS FREE-TRADE AGREEMENT
VOA News, 7 Jun 2001

Iraq has signed a free-trade agreement with three other Arab countries at
the conclusion of an Arab Economic Union meeting in Baghdad, the first there
since 1991.

The accord was signed Thursday by trade ministers from Iraq, Egypt, Syria
and Libya.

Officials say the free trade agreement is the first step towards
establishing a common Arab market.

Iraq is still under United Nations economic sanctions imposed after its 1990
invasion of Kuwait.

Earlier this year, Iraq signed bilateral free trade agreements with Egypt
and Syria.

Reuters news agency reports Iraq's imports from Arab nations makes up 50
percent of Baghdad's annual trade.

(Some information for this report provided by AFP and Reuters.)


http://www.gulf-news.com/Articles/news.asp?ArticleID=19188

*  IRAQ IS NOT INTERESTED IN BETTER TIES, SAYS IRAN
Reuters, 7th June

Iran accused neighbouring Iraq yesterday of continued support for armed
Iranian rebels, saying Baghdad showed little interest in reducing tensions
between the two former foes.

"We have done much in the past four years to reduce tension with Iraq, but
the other side does not have the political will to upgrade ties," Deputy
Foreign Minister Mohammad Sadr said.

"We repeatedly asked them to stop arming the terrorist monafeqin and not to
allow them to carry out cross-border raids," Sadr told Reuters in an
interview. Iran refers to the Mujahideen, the main Iranian armed opposition
group, as monafeqin, meaning hypocrites.

"Regrettably, they took our repeated attempts to reach a solution through
dialogue as a sign of weakness and left us with no choice but to hit
(Mujahideen) bases in Iraq," he said.

In April, Iran fired several dozen missiles at Mujahideen bases in Iraq and
threatened more attacks unless the rebels stopped cross-border raids and
bombings deep inside Iran.

Sadr denied Baghdad's accusations that Tehran allows Iran-based dissidents
to launch hit and-run attacks in Iraq. "Our borders are closed to (Iraqi
dissidents). We do not allow them across. We expect Iraq to do the same,"
Sadr said. "We want close, neighbourly relations." Ties have improved
between the two countries which fought a bitter eight-year war in the 1980s.
Baghdad has re-opened its borders for Iranian pilgrims to visit Shi'ite
shrines in Iraq.

"Relations with our neighbours in the Gulf have improved vastly over the
past four years - even with the UAE. The most important issue on Iran's
agenda is regional security. This will continue to be our core policy," Sadr
said.


http://www.timesofindia.com/070601/07euro7.htm

*  IRAQI KURDS EXPECTED FOR TALKS IN ANKARA SOON
Times of India, 7th June

ANKARA: The leaders of the two rival Kurdish factions in northern Iraq are
expected here soon for talks with Turkish officials on the region, a Turkish
diplomat said on Wednesday.

Massoud Barzani, the leader of the Kurdistan Democratic Party (KDP) and
Jalal Talabani, who heads the Patriotic Union of Kurdistan (PUK), were to
hold three-sided discussions with Turkish officials.

But the date of the meetings has not yet been fixed, Turkish foreign
ministry spokesman Huseyin Dirioz told reporters.

Long-time adversaries, the KDP and KYP have recently agreed to a number of
confidence building measures in a bid to implement a long-delayed peace
agreement, signed in 1998 under the auspices of the United States.

Developments in northern Iraq, which has been outside Baghdad's control and
run by the Kurdish groups since the 1991 Gulf War, are of direct interest to
Turkey, whose southeastern region borders it (AFP).

[.....]


http://atimes.com/global-econ/CF07Dj01.html

*  US RETHINKS CONTAINMENT OF SADDAM
[Stratfor.comıs Global Intelligence Update, 6th June]

[.....]

Washington's shift in its Iraqi policy coincides with the re-emergence of
Iran as a regional power. Iran continues to advance its military
capabilities with the aid of European and Asian countries that regularly
provide it with technical know-how and expertise. This has enabled Iran to
develop a highly capable arms-manufacturing base of its own.

Also worrisome to US policy makers, Iran has recently taken steps to
threaten Iraq. In April, Iranian forces attacked Iraqi bases in the most
intense rocket barrage since the 1980-88 Iran Iraq War. In yet another hint
of possible Iranian military designs toward its neighbor, an estimated
20,000 Iranian troops have been deployed near the Iraqi border this week as
part of a major military exercise, according to Middle East Newsline.

With both countries coming out of their shell, despite its best efforts,
Washington will have greater influence in the region as a whole if it
accepts the reality that scrapping the containment policy toward Iraq holds
little danger and much benefit. By dropping the policy, it will reap a
variety of rewards.

In the short term, a lifting of economic sanctions against Iraq will
dovetail with Washington's new energy policy emphasizing greater production
over thrifty consumption and thus requiring greater access to the region's
oil reserves. Iran and Iraq together control about 20 percent of global oil
reserves and 18 percent of gas reserves. The two countries' combined oil
revenues last year totaled US$45 billion.

With the lifting of sanctions against both countries, US corporations will
have significant opportunities to profit from the exploration, extraction,
transport and sale of these resources.

Over the longer term, relegating the containment of Saddam to the back
burner in favor of a more regional security policy will help the United
States gain more sway in the region than it has enjoyed since the Gulf War
while substantially reducing its more than 20,000 military personnel
committed there. It will also help the United States influence the direction
Iran takes in the coming years. And an opening to Iran will come next, as
needed, to keep Saddam in check.


http://www.iht.com/articles/22259.html

*  JORDAN RESUMES 2 FLIGHTS TO IRAQ
International Herald tribune

BAGHDAD (Reuters, Friday, June 8, 2001): Jordanıs state-owned airline Royal
Jordanian has resumed scheduled flights to Iraq for the first time in a
decade, a Jordanian cabinet minister said.

Trade and Industry Minister Wasef Azzar told reporters late on Tuesday that
a Royal Jordanian Airbus plane had landed in Baghdad earlier in the day.

ŒŒThere will be regular flights, one every Tuesday and the other every
Friday,ıı said Mr. Azzar, who flew into Baghdad aboard the airliner.

All commercial flights to and from Iraq were halted shortly after the United
Nations imposed sanctions on Baghdad after its August, 1990, invasion of
Kuwait, but the embargo began to crumble in 2000.

Also aboard the Jordanian plane were the Egyptian Planning and International
Cooperation Minister, Ahmed Darsh, and the Yemeni minister of Trade and
Industry, Abdul Rahman Mohammed Ali Othman.

They were in Baghdad to attend meetings of the council of Arab economic
union, an affiliate of the Cairo-based Arab League, said the official Iraqi
press agency, INA.

Jordan was the first Arab country to send a humanitarian flight to Baghdad
last year.


http://www.voanews.com/article.cfm?objectID=986D00F9-5C65-11D5
841900508BF9712A&Title=Turkey%20to%20Open%20Second%20Border%20With%20Iraq

*  TURKEY TO OPEN SECOND BORDER WITH IRAQ
by Amberin Zaman
Voanews, Ankara, 8 Jun 2001

Turkey's Foreign Minister Ismail Cem Turkish Foreign Minister Ismail Cem
says Turkey will open a second border crossing with Iraq. The announcement,
broadcast Friday on Turkish television, comes only days after U.S. Defense
Secretary Donald Rumsfeld called on Turkey to cooperate with U.S.-led
efforts to further isolate the government of Iraqi President Saddam Hussein.

Speaking on Turkish state television, Foreign Minister Cem says the new
border crossing will be established within two years. Turkish officials say
it will be built along a tiny strip of territory where the Turkish, Syrian
and Iraqi borders meet.

The same officials say the new border crossing will likely bypass areas
under the control of Iraqi Kurds, and therefore make direct trade with the
Iraqis possible for the first time.

At present, Turkey imports Iraqi diesel and other fuel products through an
existing border crossing in the southeastern town of Habur. Turkish truckers
carrying the fuel cross through Kurdish territory, controlled by one of the
main Kurdish factions in northern Iraq, known as the KDP, which levies taxes
on the trade.

Though the trade is in violation of U.N. sanctions that have been in place
against Iraq since its 1990 invasion of Kuwait, the U.S. and other Western
governments have tolerated it for two major reasons. It has helped prop up
the Iraqi Kurds, and has created employment in Turkey's largely Kurdish
regions, which are among the poorest in the country. But that toleration is
ending.

Turkey's decision to open a new border crossing comes just as the Bush
administration is seeking support for what it calls smart sanctions against
Iraq, which include cracking down on the illicit fuel trade, while easing
bans on all non-military commercial goods.

Iraqi Kurdish officials say they believe Turkey, with the new border
crossing, is seeking to diminish their revenue from the lucrative fuel trade
because of Turkish fears that the Iraqi Kurds are moving toward
independence, a move that would have repercussions among Turkey's Kurdish
population.

Turkey had long cooperated with the two main Iraqi Kurdish factions, in
exchange for their help in battling Kurd separatist rebels of the Kurdistan
Workers Party, or PKK.

But Iraqi Kurdish officials say that the Turkish attitude toward them has
changed in recent years, ever since the capture of PKK leader Abdullah
Ocalan in February 1999, and his decision to call off the rebels'
15-year-old insurgency. According to these officials, Turkey believes it no
longer needs the Iraqi Kurds and is now urging them to make peace with the
central government in Baghdad.


http://english.peopledaily.com.cn/200106/08/eng20010608_72126.html

*  TURKISH PRESIDENT VOWS TO IMPROVE TIES WITH IRAQ
People's Daily, 8th June

Turkish President Ahmed Necdet Sezer stated on Thursday that lasting peace
and stability in Iraq could be brought about only if the territorial
integrity and political unity of Iraq were preserved, reported the Anatolia
News Agency.

"Sanctions on Iraq, which have been in force for the last 10 years, have not
only hurt the Iraqi people, but also caused great economic loss to Turkey,"
said Sezer who was visiting the southeastern province of Sanliurfa which
borders Iraq.

"Our people of southeastern region have been negatively affected by the
sanctions, and Turkey has had to shoulder huge economic and social strains
in the post-Gulf War era," he added.

Sezer emphasized that the U.N. Security Council should definitely take into
consideration the interests of the neighboring countries and the new
sanctions policy should not include such measures that would make life even
more difficult for the Iraqi people.

"These sanctions should not increase the burden already shouldered by
neighboring countries," he said, referring to the so- called "smart
sanctions" advocated by the United States and Britain.ĦĦ

The "smart sanctions" were designed to ease restrictions on civilian imports
while tightening control on military-related materials and cracking down on
oil smuggling from Iraq.

The U.N. Security Council should be in close cooperation with countries such
as Turkey, which is directly affected by the U.S.- backed sanctions, he
said.

The president said: "This will be the primary criteria for the success of
the new sanctions policy."

Out of its own national interests, Turkey has distanced itself from the U.S.
policy regarding Iraq.

During his meeting with U.S. Defense Secretary Donald Rumsfeld on Monday,
Prime Minister Bulent stressed that Iraq should not be divided; Washington
should have consultations with Turkey on new sanctions; and Turkey's
interests should not be compromised by the "smart sanctions" or any other
sanctions imposed on Iraq.


http://www.chron.com/cs/CDA/story.hts/world/936342

*  IRAN'S VOTERS GIVE KHATAMI WIDE MARGIN
by Brian Murphy
Associated Press, 9th June

TEHRAN, Iran -- Reformist President Mohammad Khatami headed for a landslide
victory in Iran today, a widely expected result that would lend powerful
support to his drive to bring more freedoms to the Islamic nation, according
to early voting results.

Final results in Friday's balloting from at least six voting districts and
one province showed Khatami with vote tallies ranging from 75 percent to 95
percent, according to the government-run Islamic Republic News Agency.

The vote, which was expected to continue its lopsided trend, will give
Khatami a mandate to push forward with his challenge to the controls of
Iran's conservative clerics and their tight grip on power.

The results reported by IRNA came from the final count in polling districts
inside towns and cities in southeastern and northeastern Iran. In addition,
the agency also said Khatami received between 88 percent and 93 percent of
thousands of votes from Iranians who cast ballots abroad.

Illam Province in western Iran gave Khatami 80 percent of the vote,
according to officials at the Interior Ministry who spoke on condition of
anonymity. They added Qasr-e-Shirin, a town on the Iraqi border, went nearly
90 percent for Khatami.

Khatami faced nine challengers who ranged from hard-liners to those seeking
to fight corruption and improve the economy.


Ahmad Tavakoli was running a distant second -- with tallies ranging from 2
percent to 18 percent in the six districts and one province, according to
IRNA. Tavakoli, an economist, had campaigned on pledges to improve the
economy.

Interior Ministry sources predicted that turnout from Friday's election
would surpass 70 percent -- or 30 million of the 42.1 million Iranians who
have reached the voting age of 16.

In 1997, Khatami received nearly about 20 million votes, or 70 percent of
those cast, en route to defeating a conservative opponent.

[.....]


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