The following is an archived copy of a message sent to a Discussion List run by the Campaign Against Sanctions on Iraq.

Views expressed in this archived message are those of the author, not of the Campaign Against Sanctions on Iraq.

[Main archive index/search] [List information] [Campaign Against Sanctions on Iraq Homepage]

[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

RE: [casi] BBC 10 o clock news- anyone got a transcript? (th 28th)

> there was a lot on the 10 o clock news tonight (Thursday) about
> Iraq, including a  report from Baghdad, by Ragy Omar, in which,
> among other things they had a clip from a Baghdad market where a
> market vendor talking in Arabic was said to have said that most
> Iraqis could now afford all the luxury goods in the market.

Thanks for the posting, Richard.  I didn't see the report, and haven't seen
a transcript, so can't comment on what actually was said.  If any of the
Baghdadis on the list could tell us their impressions of this, I would be
delighted: this may be silly, but, after so many years of feeling Iraq to be
such a distant country, I am so pleased that we can communicate somewhat on
this list.

> This was in the context of Iraq's improving trade and relations
> with it's neighbours but the reporter specifically said it was
> not sanctions busting goods, implying (I suppose) that oil for
> food is allowing this to happen. My understanding is that without
> the oil revenues entering the economy (as opposed to the escrow
> account) the kind of scenario the BBC was attempting to depict
> was impossible.

My sense is that the existence of the escrow account itself isn't
necessarily problematic.  To illustrate what I mean, consider a very simple
example: suppose that a child has a job and that all the income earned by
the child is paid into an account managed by the child's parents.  Further,
suppose that, whenever the child wants something, the parents take the money
from the account and give it to the child to buy the desired good.  In this
case, it's a bit more work for the child to buy something; this does add
costs, but probably not significant costs.

This example obviously differs from the Iraqi escrow account: Iraq is not a
child; the Sanctions Committee is not a benevolent parent.  The point is
similar, though: if it's not much work for the Iraqi government or the UN
agencies to get clearance for imports, then the escrow account isn't
particularly problematic.  The effort required to get clearance has probably
dropped with the development of the 'green lists' (now two years old).
These tend not to cover the larger and more complicated purchases that are
essential to infrastructural reconstruction, which are often held.  Here,
the concern isn't so much the existence of the escrow account as it is the
practices of the Sanctions Committee in conjunction with the account.

In any case, whether income reaches Iraq through smuggling or through OFF,
it's income.  From the point of view of public welfare, both approaches have
their drawbacks.  Smuggled oil is often sold at a discount, the discount
buying political support; OFF oil loses 25% of its revenue to the
compensation fund.  The revenues gained from smuggling are probably used in
ways that emphasise the Iraqi government's internal security priorities over
public welfare; OFF revenues may be subject to holds and other uncertainty
in the Sanctions Committee.

My sense is that the core of the way in which the sanctions' contribute to
hardship in Iraq is not by making it more difficult for goods to cross
Iraq's borders (after all, the only vehicles inspected are those that
present themselves for inspection) but by restricting Iraqi income.  Here,
the compensation payments are very costly: while many of the non-Iraqi
victims of Iraq's invasion of Kuwait were themselves poor and vulnerable, it
is striking that the OFF programme has seen $13.8 billion paid in
compensation (, 18 March 2002) and $20.2
billion in goods delivered to Iraq
(, 26 March 2002).  I
suspect that restrictions on foreign investment are an even larger
impediment to Iraqi economic growth.  The same logic that drove 'oil for
food' in the first place drives the argument for foreign investment: Iraq
has both grave humanitarian needs and oil wealth; without substantial
investment in its oil industry - which its faltering oil industry cannot
fund at present - its wealth cannot be used properly to meet those needs.


Colin Rowat

work | Room 406, Department of Economics | The University of Birmingham |
Birmingham, B15 2TT, UK | | (+44/0) 121 414 3754 |
(+44/0) 121 414 7377 (fax) |

personal | (+44/0) 7768 056 984 (mobile) | (+44/0) 7092 378 517 (fax) |
(707) 221 3672 (US fax) |

Do You Yahoo!?
Get your free address at

Sent via the discussion list of the Campaign Against Sanctions on Iraq.
To unsubscribe, visit
To contact the list manager, email
All postings are archived on CASI's website:

[Campaign Against Sanctions on Iraq Homepage]