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Abi - apologies for the attachment - herewith as text, best, f. - [Fwd: Stratfor: Iraq Using Oil Pipeline To Sway U.S. Ally] Date: Sun, May 26, 2002, 7:54 pm Gruß, Joachim Iraq Press May 22, 2002 Dahouk, Iraq Press, May 22 – Iraqi engineers say they have almost completed the reconstruction of a major pumping station on their joint oil pipeline with Turkey. The station, some 80 kilometers south of this Kurdish-controlled city, was destroyed during the 1991 Gulf War over Kuwait. The engineers said they were determined to turn on the newly imported pumps by mid July. The station, once operational, is expected to boost pumping through the vital pipeline to the original capacity of 1.6 million barrels daily. Under U.N. rules, Iraq is required to direct the largest amount of its oil exports via Turkey. But the world body overlooked its own regulations since the Turkish line's capacity was limited to about 1 million barrels per day. Currently, the largest portion of the estimated 2.5 million exports go through terminals on the Gulf. But the restoration of the station, just south of the northern city of Mosul, will add an additional 500,000 barrels a day to the Turkish line. It is not clear whether the United Nations will demand that Iraq increase its exports via Turkish terminals. Previously, Iraq bypassed the station, making it more difficult to reach the full capacity of 1.6 million barrels daily. The pumps, controls and associated valves needed to revamp the stations were imported under the terms of the U.N.-approved oil-for-food program at a cost of about 50 million dollars. Iraq's network of export pipelines gives it a lot of room to maneuver. If fully operational, Iraqi export outlets may handle up to 6 million barrels a day. While the pipeline via Saudi territories remains idle, Iraq has reportedly repaired a strategic line through Syria with a potential capacity of 1.4 million barrels a day. Industry analysts say the line is currently operational handling at least 150,000 barrels of illegal Iraqi crude exports to Syria. Iraq Using Oil Pipeline To Sway U.S. Ally Stratfor, 24 May 2002 Iraq's use of economic diplomacy to forestall a possible U.S. strike continues to develop, with Baghdad targeting key U.S. ally Turkey. The Iraqi government has nearly finished reconstructing a major pumping station on a joint pipeline, running from Kirkuk in Iraq to Ceyhan in Turkey, which this summer will become fully operational for the first time since 1990. The pipeline repairs will generate hundreds of millions of dollars in oil-transit fees for the Turkish government, which is struggling to revive its stagnant economy. Baghdad hopes that the cash flow will make the Turks reconsider supporting U.S. military action against Iraq. It is not clear exactly what the White House has in mind for Iraq. U.S. President George W. Bush told an audience in Germany May 23 that an attack on Iraq was not imminent. The Pentagon seems to have major concerns over such an operation, and the White House and civilian leaders at the Pentagon appear to be pressing the U.S. military leadership for more imaginative attack plans than those that have been presented so far. However, no matter what scenarios are being offered for ousting Iraqi President Saddam Hussein, Turkey is key in all of them. U.S. aircraft from Turkish bases enforce the Iraqi northern no-fly zone, and Turkey's border with Iraq is a potential invasion route. This makes swaying the opinion of the government in Ankara a top priority for Baghdad. The repair and reopening of the Kirkuk-Ceyhan pipeline will almost double the line's total capacity from 900,000 barrels per day to 1.6 million bpd. The additional volume through the pipeline will mean a corresponding increase in the transit fees collected by the Turkish government, something on the order of a half billion dollars a year in revenue. This is serious cash for the Turkish government. The economy is in intensive care: It shrank 9.4 percent last year amid an economic crisis and is only now steadying under an International Monetary Fund-backed recovery program. Many Turkish politicians place a large measure of blame for their economic woes on U.S. policies in the aftermath of the Persian Gulf War. The oil embargo on Iraq and a collapse in trade between the two countries have cost the Turkish economy tens of billions of dollars. The financial hit was partially offset by aid from U.S.-backed international institutions. Last February, Turkey won a $16 billion loan package from the IMF, making it the organization's biggest borrower with a total of $31 billion. However, Ankara would rather that the billions of dollars come from trade instead of loans. Although the money coming from Iraq may make the Turkish government more sympathetic to Baghdad's diplomatic efforts, it likely won't be enough get Ankara to turn its back on Washington. However, Turkey may still use this relationship to raise its price for participating in a U.S. campaign against Baghdad. washingtonpost.com Little by Little, Iraq Shows Signs of Economic Life By Howard Schneider Washington Post Foreign Service Friday, May 17, 2002; Page A01 BAGHDAD, Iraq -- It was a breezy Monday night, and the mood in Horreya Square was festive as a crowd that included college students, old men and shy young girls gathered outside the Faqma ice cream shop to indulge. In the Iraq of the mid-1990s, such a scene would have been impossible. People were penniless and the government strictly rationed milk and sugar to ensure that the country's embargoed food supplies covered necessities. But those days are past. Step by step, economic and social life is rebounding and the country is breaking out of limits imposed on it by the United States and other Western powers after the Persian Gulf War a decade ago. Iraq is now sufficiently flush to independently launch an oil embargo, as it did last month, suspending exports of crude as a protest against Israeli occupation of Palestinian cities in the West Bank. That won Iraq admiration in many Arab countries, as have its payments of $25,000 that U.S. officials said have been made to the families of each Palestinian suicide bomber. Many Iraqis and foreign diplomats here said the country's resurgence will make the U.S. goal of unseating President Saddam Hussein all the more difficult to achieve. And, in the meantime, the growing prosperity is allowing Hussein's political apparatus to proclaim that Iraq was the ultimate victor in the Persian Gulf conflict. "Many people predicted that Iraq would collapse in 1991, but we have reconstructed our country," Oil Minister Amir Mohammad Rasheed said recently at a news conference in Baghdad. "We know it is difficult for those without thousands of years of history to understand, but oil is not the only resource of the Iraqi people." Oil, however, is what's driving the rebound. Iraq is allowed to sell as much petroleum as it wants under U.N. sanctions to buy food, medicine and other necessities. But money is also entering the country illegally through oil smuggling and a complicated surcharge scheme that a Wall Street Journal analysis recently estimated provides around $2.5 billion annually outside the control of sanctions. While U.S. officials contend that much of the money is being spent to refit the Iraqi military, develop long-range missiles and possibly assemble nuclear, biological or chemical weapons, clearly some of it is improving the lives of Iraqi citizens. Per capita income now stands at around $2,500 annually -- double that of Egypt, according to the CIA World Factbook. Iraq's gross domestic product grew about 15 percent in the year 2000. "Little by little, things are getting better. You can find everything," said Sinan Abdul Hamid, 20, an engineering student whose chief complaint about life is that the lasers used in his classes are out of date. Entrepreneurs are bringing shiploads of computers, televisions, stereos, appliances and other goods from Dubai to stock the the shelves of Baghdad's shops. Wealthy Iraqis can arrange long-distance special deliveries of their favorite foods from grocery stores in Amman, Jordan, 12 hours by car and a few bribes away from the Iraqi capital. Farmers are buying new trucks; new double-decker buses are moving about the capital. A few privately owned luxury cars are breaking the previous monotony of wobbly taxis and private cars with shattered windshields. Even such areas as an impoverished corner of Saddam City south of Baghdad are feeling gains. There, vegetable seller Rabbia Jassim at first pointed to his 6-year-old son's dilapidated sneakers and said that for the poorest in Iraq, many basics remain out of reach. But later he conceded there was some improvement: His family can now afford an occasional chicken. As part of the upturn, Iraq has again become a major force in the regional economy. Much of its $13 billion in annual imports come from Turkey, Egypt, Saudi Arabia, Syria and Jordan, Iraqi officials said, helping bolster economies in the region. They added that Turkey's sales to Iraq doubled in the past year, to nearly $1 billion, while Egypt, starved for hard currency, now gets $2 billion a year from goods its sells to Iraq. Iraqis are traveling abroad more easily, too, on the expanding network of flights available since Saddam International Airport reopened a year ago. Royal Jordanian Airlines offers four flights a week between Amman and Baghdad, and service is also available to the Syrian capital, Damascus, and to Moscow. Iraqi diplomats circle the globe pressing their nation's case, while business leaders from the Arab world, Russia and Europe fill Iraq's version of a five-star hotel, the Al Rasheed. The future of Iraq and Hussein has been a chief preoccupation of the region, as well as of world powers, for more than a decade now. While there is agreement that Iraq's isolation as a nation should end, there is disagreement over whether that should happen while Hussein is still in power. To Washington, he remains a global menace, intent on developing weapons of mass destruction and likely to use them against Israel, Arab neighbors or even the United States. At a recent U.N. Security Council briefing, U.S. officials presented evidence of new long-range missile sites, and foreign diplomats in Baghdad cite suspicions that Iraqi officials have stepped up efforts to acquire material for a nuclear device. President Bush has called Iraq part of an "axis of evil" that includes its neighbor Iran and North Korea. U.S. officials have not made a case linking Iraq with al Qaeda or any terrorist attack against U.S. interests. But they insist that Iraq is developing weapons of mass destruction and say action against the country, perhaps armed action, is needed. "The combination of a dangerous regime with such destructive weapons is not acceptable," said Patrick Clawson, research director at the Washington Institute for Near East Policy. Among Iraq's Arab neighbors, the view is less apocalyptic. Hussein is viewed as a brutal leader, but many say he became more cautious after seeing his army expelled from Kuwait in 1991. An international coalition might well retaliate against any aggressive act tied to Baghdad, spelling an end to the Baath Party that controls the country. One diplomat here, whose government has counseled the United States to avoid military action in the absence of clear provocation, said the risks of toppling Hussein might be as great as the risks of leaving him in power. In society here, the diplomat said, "there is a big hate for the U.S. Every malaise is attributed to them and not the regime. The complexity of the problem is that once Pandora's box is open, are we in a more difficult position than now?" A U.S. attack could lead to a fracturing of the country among the quasi-autonomous Kurdish region in the north, the Iranian-influenced Shiite populations in the south, and the Sunni Muslims who dominate the central region, the diplomat said. Some Iraqis who privately dislike the regime are also uneasy about the prospect of an attack. They would rather wait for the 65-year-old Hussein's natural demise than risk a war or revolution. "Borders are closed, brains are closed," said one businessman, who asked not to be identified. "But it has been 20 years. What is three or four more? This is what is in the heart of Iraqis." Advisers in the president's office, meanwhile, say the government's public bravado -- defiant, anti-American and ready for a fight -- isn't the whole story. "What are we going to say if [Bush] says we are the axis of evil? We fought Iran for eight years. How can you just throw us in one bottle?" one Iraqi official said. "We have learned lessons, and we will make use of those lessons. We will try to avoid our people suffering again." Despite the talk of war, the United States hasn't much changed the military pressure that it has exerted against Iraq since the end of the Gulf War. Every day a panoply of U.S. planes, including high-flying U-2 reconnaissance jets and RC-135 eavesdropping aircraft, course the skies of northern Saudi Arabia and southern Turkey, monitoring the Iraqi military. Warplanes stage periodic strikes against antiaircraft positions. But some diplomats in Baghdad and analysts in Washington say that Bush's war threats may already be paying off with the rise of what amounts, by Iraqi standards, to a group of pragmatists on the Baath Party's ruling Revolutionary Command Council. The diplomats said they believe Foreign Minister Naji Sabri has developed an influential voice in alliance with Hussein's younger son and possible successor, Qusay. Sabri is said to have pushed for recent efforts to mend fences with Kuwait and Saudi Arabia. At a recent Arab League summit in Beirut, Iraq went further than ever, promising to respect Kuwait's sovereignty. Iraq has also reopened talks with the United Nations on the possible return of U.N. weapons inspection teams, who were withdrawn from the country in 1998 hours before the United States and Britain launched airstrikes on Baghdad. The talks now involve Iraqi scientists and generals. Before Sept. 11, Iraq maintained that inspectors would never return. Hussein remains the ultimate arbiter, however, holding on to power despite a record of domestic mismanagement, political executions and atrocities against his people. Increasingly elaborate statues of Hussein continue to sprout throughout the capital, as do state-financed mosques. The Mother of All Battles Mosque opened recently. Still in progress is Saddam Mammoth Mosque, intended to be the largest in the world. Along one boulevard stands what people call The Big "La," ("No" in Arabic), a granite symbol of the country's defiance. Hussein is lionized in party tracts as the rightful heir of history's great Muslim leaders, such as the 12th-century warrior Saladin, who fought the Christian Crusaders. The revisionism has turned the invasion of Kuwait into a "Zionist trap" that ended with U.S. troops encircled and begging for a cease-fire. It is unclear how many people accept that account, doled out incessantly by Iraqi newspapers and television. But the hardships of the last decade have been real, and many ordinary Iraqis appear to view the recent easing as a triumph over the United States. In their offices in the capital, Iraqi officials tried to build on those feelings. They said that what is really behind Bush's talk of war is Hussein's refusal to follow the recent path of Egypt, Saudi Arabia, Jordan and other Arab states and submit to what they perceive as U.S. dominance. Bush "wants Iraqi oil. Saddam Hussein won't let him. He wants to put a stooge government in. Saddam Hussein won't let him," said Abdelrazak Hashimi, a semi-official government spokesman. "Nobody has the right to go into another country and change the system of government. . . . Nobody can just scratch Iraq off their calendar." © 2002 The Washington Post Company _______________________________________________ Sent via the discussion list of the Campaign Against Sanctions on Iraq. To unsubscribe, visit http://lists.casi.org.uk/mailman/listinfo/casi-discuss To contact the list manager, email firstname.lastname@example.org All postings are archived on CASI's website: http://www.casi.org.uk