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[casi] (new) News, 1-8/6/02 (1)

News, 1-8/6/02 (1)


*  Lesson of Iraq's Mass Murder [This article is an expression of
indignation over Iraqi use of chemical weapons and concern for its victims,
so long as they happen to be Kurdish. Iranian victims are only mentioned in
passing, but Iran, as we all know, is part of the axis of evil (so,
presumably, were the Kurds when they were allied with Iran in the Iran/Iraq
war). The authors complain that the gassing of the Kurds has never been
properly investigated because of the UNıs respect for Iraqıs sovereignty
over Southern Kurdistan. Which begs the question why the Americans and
British who, we all know, are Œprotectingı the Kurds, havenıt conducted
their own investigation. And also why Iran hasnıt requested an
investigation, though perhaps most of the Iraqi chemical attacks on Iranian
soldiers occurred in Iraq, ie they were done in self defence. What means, we
wonder, would the US or British deploy if the Martians actually succeeded in
invading our territory? The indignation and concern (and frustration at the
lack of adequate investigation) expressed in the article rather resembles
the indignation and concern we express over US/UK use of Œconventionalı (!)
weapons, including the consequences of depleted uranium. Perhaps we should
get together ...]
*  Czech Ambassador Defends Meeting [The Czech insistence on maintaining
this story is strange since none of these statements ever seem to bring
forward any new evidence. One feels its part of a need to render themselves
indispensable to the New World Order]
*  Report: Iraq Offered to Hand Over Terror Suspect [This and the next have
already been sent to the list by Drew Hamre, who makes the relevant comment:
ŒTelevision journalist Leslie Stahl strikes again ... Stahl, you'll recall,
was the journalist who elicited then-UN Ambassador Madeleine Albright's
infamous "price is worth it" comment about the death of 500,000 Iraqi
children associated with sanctions ... The 1993 WTC bombing is relevant to
current attack-Iraq hysteria, because several proponents - chiefly Laurie
Mylroie - has argued that Iraq was behind the bombing, or that it's
sheltered conspirators.  Stahl's report rips a hole in these arguments.ı The
full transcript can be found on]
*  US names 'mastermind' of twin tower attacks [This will almost certainly
reactivate the Laurie Mylroie thesis of an Iraqi connection to Sept 11 via
the 1993 WTC bombing. On the other hand it could imply the intriguing
possibility that OBL and Al-Qaida werenıt in fact responsible for the US
Embassy bombings or for Sept 11.]
*  Delhi company fuelled Iraq's weapons system: Daily [This is the closest
Iıve yet seen to evidence that Iraq is developing a WMD facility. Why is
more not being made of it?]


*  Iraq Says Kampala Government Paid US $1m Out of $10m Debt
*  Russia can't please Iran, Iraq and America [How Russia can crawl to the
US, betray its friends and still preserve some shreds of an appearance of
national dignity.]


*  Iraqi aid money wins Palestinian hearts
*  MPs lead delegation on trip to Iraq
*  Pentagon to sell advanced missiles to Kuwait [A flagrant example of
weapons proliferation, justified because "Kuwait is threatened by hostile
neighbors with credible air, land and sea forces." Well, yes, it does seem
that Iraq still has two Scud missiles that havenıt been accounted for ...
But perhaps the reference is to Iran. is there any sign that Iran hjas any
aggressive intentions against Kuwait? Why should the Kuwaitis allow
themselves to play this idiotic and dangerous game?]
*  IRAN DIARY, Part 7: It's the economy, Ayatollah [Pepe Escobar.
Description of how the Iranian economy works and why it is unlikely that
Khatami will get very far in reforming it.]
*  New trade rules Œwill transform Arab economyı [On the efforts to build an
Arab free trade zone]
*  Saddam Sends Telegram of Condolences to Syria Over Dam Collapse


by Christine Gosden and Mike Amitay
Washington Post, 2nd June (sic. posted 31st May?)

The Sept. 11 attacks and anthrax aftermath have forced Americans to confront
the terrible reality that we are vulnerable to chemical, biological or
radiological weapons. Enormous resources are being allocated to help law
enforcement, health officials and local communities devise effective
responses to unprecedented threats. Public health vigilance and responses to
threats from infectious agents have advanced, but chemical agents,
radiological weapons and biological toxins pose different threats and can
cause severe long-term effects, such as cancer. We should be better prepared
for threats these weapons pose, especially since we are not the first people
terrorized by such weapons of mass destruction.

President Bush and his advisers repeatedly remind us that Saddam Hussein
used chemical weapons against the people of Iraq. Indeed, from April 1987 to
October 1988 the Iraqi regime attacked 4 million people in Iraqi Kurdistan
(northern Iraq) by using combinations of nerve agents, mustard gas and
possibly biological and radiological weapons on scores of Kurdish towns and
villages. The attacks aimed to subjugate and punish those who supported Iran
during the Iran-Iraq war. In the most publicized attack, the town of Halabja
was bombarded with mustard gas and nerve agents, killing 5,000 people
immediately and severely injuring tens of thousands of others.

Today, 14 years later, the attacks continue to exert long-term effects
through cancers, congenital malformations and infant deaths. Yet not only
have the United States and the international community failed to address the
humanitarian and environmental consequences of the attacks, they have also
failed to consider the implications for their own domestic preparedness.

Four fundamental questions should have been answered following these tragic
exposures to weapons of mass destruction (WMD): What agents were used? What
are the most effective means of monitoring environment and people to remove
threats from persistent weapons agents? What are the most effective means of
researching immediate and long-term effects of different agents? What are
the most effective means of developing effective therapies for victims? Only
when these questions are answered can we respond effectively to WMD threats.

A first priority is to establish which agents may have been used in Iraq.
Although this seems a fundamental step, in practice it is more complex. The
keystone of the U.N. system is respect for the sovereignty of governments,
and international agencies charged with testing must await requests from
governments to investigate possible WMD use. Since the government of Iraq
has not requested an investigation into attacks in Iraqi Kurdistan, there is
only fragmentary forensic evidence, rather than systematic test results.

A small U.N. team examined sites along the Iran-Iraq border, and Physicians
for Human Rights gathered samples from a single site near the Turkish
border. These confirmed the presence of mustard gas and the nerve agents
sarin and tabun. But for Halabja, the site of one of the world's largest WMD
attacks, there has still been no systematic testing.

A second step is to monitor attack sites and surrounding areas to determine
persistence of any weapons agents in the environment. All told, some 250,000
civilians may have been directly exposed during attacks and many more
affected by contamination of the environment and water table and by lasting
effects on animals and food chains. Many others may have been exposed at
varying levels during the Iran-Iraq war and in punitive attacks against
dissident groups in southern Iraq.

The attacks occurred as the Iraqi military was testing, weaponizing and
stockpiling a wide range of agents, including anthrax, smallpox, plague,
botulinum toxin, aflatoxin, mustard gas and nerve gases such as sarin and
VX. Some chemical weapons and biological toxins, such as nuclear and
radiological weapons, damage the human genome, causing cancers in those
exposed and birth defects and cancers in children born years later. Severe
health problems reported throughout Iraq and in neighboring countries
suggest environmental damage may be widespread. Yet there is an appalling
lack of detailed scientific information on damage to people and their

A third priority is to identify the short- and long-term medical problems
associated with each weapon. The terrible long-term effects of mustard gas
have been observed in World War I victims, World War II poison gas factory
workers, U.S. military test chamber volunteers and Iranian soldiers exposed
during the Iran-Iraq war. Long-term effects include laryngeal, pharyngeal
and lung cancers, corneal burns causing blindness, severe skin burns
predisposing to skin cancer, neurological and psychiatric disorders,
infertility and birth defects. A significant proportion of survivors of
nerve gas (sarin) attacks on the Tokyo subway suffer from long-term
neurological disorders. Immediate deaths from WMD are the tip of a lethal
iceberg; the 90 percent or so who survive, face slow and lingering deaths or
severe disability.

The fourth lesson, vital to overcoming threats, is to develop effective
methods for treating victims. Civilian populations, as the Kurds exemplify,
are extremely vulnerable to WMD attacks, lacking gas masks, other
protections and effective methods for personal and environmental
decontamination. The major contrast between Iraqi Kurds and potential
survivors of WMD in the United States is that in Kurdistan, the survivors
are currently dying from cancers without benefit of chemotherapy,
radiotherapy or pain relief in terminal stages, whereas in the United States
such treatment would likely be available. Yet even if treatment responses
were available, it is unclear whether conventional approaches are effective
in exposed populations, as few evidence-based studies have been conducted
among civilians exposed to WMD.

Before the answers to these important questions can be found, adequate
medical and humanitarian assistance must be extended to survivors, without
which it would be unethical to conduct studies, environmental assessments
and medical research necessary to learn from this tragedy. The experience of
people in Iraqi Kurdistan is a terrifying example of what happens when a
civilian population is unprepared for a chemical weapons attack. The people
there continue to live in terror of Iraqi unconventional weapons attacks,
just as they live with death and disease resulting from their previous
exposures. Now is the time not simply to cite them as victims but also to
question the wisdom of our own shortsightedness and lack of compassion,
because to aid their survival is to benefit all those at risk from threats
of WMD.

Christine Gosden is a professor of medical genetics at the University of
Liverpool who works at Liverpool Women's Hospital. Mike Amitay is executive
director of the Washington Kurdish Institute.

Las Vegas Sun, 4th June

UNITED NATIONS- Despite U.S. denials, the Czech government stands by its
account that a suspected Iraqi intelligence agent met Sept. 11 hijacker
Mohammed Atta in Prague last year, a senior Czech diplomat said Tuesday.

Czech officials revealed details about the meeting shortly after the
terrorist attacks on the United States. But U.S. intelligence officials said
in April that they no longer believed Atta met with Ahmed Khalil Ibrahim
Samir al-Ani, who served at the Iraqi embassy in Prague before he was

"Atta and al-Ani met," Czech U.N. Ambassador Hynek Kmonicek said in an
interview with The Associated Press.

"The meeting took place as confirmed by the interior minister last fall," he

Kmonicek also spoke with the Prague Post in an interview which was published
on the newspaper's Web site on Tuesday.

Some Czech officials said initially that Atta had contacted al-Ani to
discuss an attack on the Prague building that serves as the headquarters for
U.S.-funded Radio Free Europe/Radio Liberty. Czech authorities appeared to
backtrack at the end of last year, but now stand by the story.

In Prague, Foreign Ministry spokesman Ales Pospisil said Kmonicek's remarks
were consistent with what the government has been saying since October -
that it has information that Atta and al-Ani met at least once in Prague.

"The ambassador only repeated the position held by Czech authorities, which
is based on an analysis available to the interior ministry," Pospisil said.

Some observers said the meeting suggested Iraq's complicity in the Sept. 11
attacks - providing the United States with a reason to attack Saddam
Hussein. The Iraqi government denied the meeting occurred and said the
reports were fabricated to justify making Iraq a target in the U.S.-led war
on terror.

Kmonicek, who once directed the Foreign Ministry's Middle East department,
was acting foreign minister when al-Ani was expelled from the Czech Republic
on April 22, 2001.

"He was engaging in activities beyond and outside his diplomatic duties,"
Kmonicek said. He said he called in the Iraqi charge d'affaires and informed
him al-Ani was being kicked out of the country.

The expulsion took place just weeks after Atta and al-Ani met but Kmonicek
said the connection was only discovered after Sept. 11.

Atta is thought to have been the ringleader of the 19 hijackers who carried
out the terrorist attacks on the World Trade Center and the Pentagon.

New York Times, 2nd June

WASHINGTON (Reuters) - Iraq is holding accused World Trade Center bomber
Abdul Rahman Yasin in jail and has made two offers to hand him over to the
United States but was rejected both times, the CBS News program ``60
Minutes'' reported on Sunday.

CBS broadcast excerpts of an interview with Yasin, who is on the FBI's list
of 22 most wanted terrorists, which it conducted last month at the Baghdad
prison where the Iraqis told the network he had been held for eight years.

Yasin, born in the United States of Iraqi parents, moved to Iraq days after
being questioned and released by the FBI in connection with the 1993 bombing
of the World Trade Center in which six people were killed.

His presence in Iraq has been cited as possibly bolstering any case the Bush
administration might make for a military attack on the country, which the
U.S. president has accused of being part of an ``axis of evil.''

Iraq's Deputy Prime Minister Tariq Aziz told ``60 Minutes'' Baghdad had made
two offers to return Yasin to the United States, first in 1994 during the
Clinton administration and again after the Sept. 11 attacks.

``Twice, we ask them to come and take him. They refused,'' Aziz said.

He said Iraq wanted to give up Yasin as proof that it had no involvement in
either the 1993 bombing or the Sept. 11 attacks that killed about 3,000

Yasin, who has a $25 million reward on his head, was the only suspect in the
1993 case to elude the U.S. justice system. The man believed to have been
the mastermind of the bombing, Ramzi Ahmed Yousef, has been jailed for life
in Colorado.

Aziz said Iraq made its second approach to Washington through a third party
``in October 2001 to tell the Americans that Yasin is in Iraq'' to counter
U.S. suspicions that it had a hand in the Sept. 11 attacks.

He said the Iraqis themselves were suspicious about why U.S. authorities had
allowed Yasin to leave the country after questioning him.

``We fear that -- sending Yasin back to Iraq, after ... interrogating him,
was a sting operation,'' Aziz said.

``To tell people later on, look, this man who participated in that event now
is in Iraq, etc., and use it as they are doing now, using many false
pretexts, you see, to hurt Iraq in their own way.''

CBS quoted an FBI agent who was involved in the 1993 bombing probe that
Yasin had provided useful information but had been released because the
agency did not have enough evidence against him.

Aziz said Yasin, who has not been charged with a crime in Iraq, had not been
turned over to the United States because Washington refused to sign a
receipt for his delivery.

CBS said neither the White House or the State Department had agreed to
comment on Aziz's remarks.

But a U.S. intelligence official told the network that Iraq's offer came
with ``extreme conditions,'' including demands that the United States sign a
lengthy document concerning Yasin's whereabouts since 1993.

``We refused to sign because we believe their version was inaccurate,'' the
official said.

Yasin told CBS that Ramzi Yousef's original plan had been to plant bombs in
Jewish neighborhoods in the New York borough of Brooklyn.

``I am very sorry for what happened,'' he said. ``I don't know what to do to
make it up. My father died because of pain and sadness. It caused many
troubles. I don't know how to apologize for it.''

by Andrew Gumbel in Los Angeles
Independent, 6th June

American officials said yesterday they had identified a new candidate as the
possible mastermind of the 11 September attacks.

He was identified as Khalid Sheikh Mohammed, a Kuwaiti-born member of Osama
bin Laden's al-Qa'ida organisation who is a blood relative of Ramzi Yousef,
who was involved in the first attempt to blow up the World Trade Centre in

The officials said they believed Mr Mohammed was at large somewhere in the
border region between Afghanistan and Pakistan. He had previously been
implicated in the thwarted attempt by Yousef and others to blow up 12
airliners above the Pacific Ocean in 1995 and there were suspicions he was
involved in the bombings of the US embassies in Kenya and Tanzania in 1998.

It was, however, never previously known for sure that Mr Mohammed was
involved with al-Qa'ida, let alone at such a high level. New information,
suggesting he was deeply involved in the operational and financial planning
of the 11 September attacks, came largely from captured al- Qa'ida members,
including Abu Zubeida, one of Osama bin Laden's lieutenants who has been
talking to US authorities since being captured in Pakistan in March.

It is now believed Mr Mohammed had more to do with 11 September than Mr bin
Laden. "It looks like he's the man, quite honestly," a Bush administration
official told the Los Angeles Times.

"We believe he is probably the leader of this. We have reason to believe it
was his idea to create the plan for the four hijackings and discussed the
plan with ... bin Laden." If the officials are right ­ and they say they
have cross-checked their information since first hearing about Mr Mohammed's
role from the captured fighters ­ then they will have discovered the first
truly compelling link between al-Qa'ida and Ramzi Yousef, who is in a
maximum-security prison in America.

There was always a tremendous amount of circumstantial evidence to suggest
the two attacks on the World Trade Centre were conceived by the same group
of people but no concrete link.

Yousef has never talked, and there has been much speculation about his true
identity ­ whether he is a Kuwaiti-born Pakistani, as Mr Mohammed appears to
be, or whether he stole the identity of a Kuwaiti-born Pakistani during the
Iraqi occupation of Kuwait in 1990-91 and is, in fact, somebody completely

Some hawks in the Bush administration, anxious to launch a military invasion
of Iraq, believe Yousef is an Iraqi agent and that the man ultimately
responsible for many of the terror plots of the past decade is Saddam

The decision to go public with their information might have been prompted by
the criticisms levelled at the Bush administration and intelligence services
over their failure to prevent the 11 September attacks and the slow progress
made in the investigation.

Mr Mohammed, who is believed to be 36 or 37, has been on the US list of most
wanted terrorists since Decemberalthough he was initially mentioned only in
connection with the 1995 airliner plot. The officials did not specify what
his relationship was to Yousef, who is serving a life sentence in the
federal "super-maximum security" prison in Florence, Colorado, for his part
in the earlier terror attacks.


New Delhi, June 6, IRNA -- Iraq is suspected to have bought a huge quantity
of weapons-grade titanium and aluminum for its chemical weapons and missile
program from India, press said Thursday.

According to Hindustan Times, a New Delhi-based English daily, Directorate
of Revenue Intelligence's (DRI) investigations reveals that the exports were
illegally made by the Delhi-based NEC Engineers Pvt. Ltd.

The general manager of the company K.C.Dhir has been remanded in judicial

India's Defense Research and Development Organization (DRDO) and experts
consulted by the DRI are believed to have said that the quality and quantity
of the exports indicate they were meant for weapons production.

Between September 1998 and February 2001, the firm exported 10 consignments
worth $7,91,343. The shipments comprised of titanium vessels, titanium
centrifugal pumps, atomized and spherical aluminum powder and titanium

Exports of these products are banned without the government's permission.
Beside exporting the metals without permission, the company is also alleged
to have wrongly declared the contents of the consignments and had floated
front companies to evade customs.

While the company declared the consignments were bound for Dubai and Jordan,
they were diverted to Iraq. Teams of technicians from NEC Engineers
regularly visited Baghdad when shipments were sent.

Dhir's counsel says the allegations are baseless. "The company had
permission to export," he says.


New Vision (Kampala), 4th June

THE Iraq Fund informed court recently that the government paid back
US$1,960,278.00 (about sh3,518,699,010) on a loan obtained in 1975 for
industrial development.

Juliet Nankinga reports that Iraq sued the government for the recovery of an
outstanding loan of US$10,964,354 given in two phases 27 years ago.

In its defence, the Government claimed that the outstanding loan was
US$5,847,507.90 and not US$10,964,354 (about sh17b). the case is before
Commercial Court Judge Okumu Wengi.

Cheborion Barishaki, a Commissioner for Litigation and Charles Odere
representing the Iraq Fund, closed their case and are due to file their

Youssouf Moussa, an Iraqi representative in Africa based in Dar- es-salaam,
Tanzania, told court that his government extended a loan facility on soft
terms for the purpose of financing industrial projects in Uganda but it has
never been paid back.

Court heard that the Iraq government sought to have the loan repaid through
the export of locally produced goods to Iraq but the Ugandan government
rejected the proposal.

by Stephen Sestanovich
International Herald Tribune (from The New York Times), 4th June

 WASHINGTON:Iran and Iraq have created problems in Russian-American
relations for years. In the last decade both have had good relations with
Russia while the United States has considered them enemies. U.S. officials
have long complained that Russian diplomats shield Iraq from pressure in the
United Nations. George Tenet recently told Congress that Iran still gets
"significant" Russian help on long-range missiles and nuclear weapons.

The new amity between Moscow and Washington, which Vladimir Putin surely
wants to preserve, gives him reason to help George W. Bush.

So Putin is repositioning himself - but only a little. Russian diplomats,
who last year blocked revisions to the international sanctions imposed on
Iraq, have joined with the United States to put a revised program in place.
Where they used to say Iraq needs assurances that sanctions would be lifted
if Iraq met international demands, the Russians now emphasize Iraq's
obligation to show that it has no weapons of mass destruction. Russia's
handling of Iran also hints at change. After Bush's "axis of evil" speech in
January, Putin quickly canceled a visit to Moscow by the Iranian foreign
minister. Recently he broke with Tehran on territorial control of the
Caspian Sea, siding for the first time with other energy-producing states in
the region. And in Moscow, Putin offered what Bush called "comforting"
assurances about safeguards for the nuclear reactor that Russia is building
in the Iranian city of Bushehr.

These steps are a start, but they do not wrest control from Russian domestic
interests that benefit most from keeping Russian policy on Iran and Iraq as
it is.

Russian companies have by far the largest share of Iraqi trade under the
United Nations' oil-for-food program, and Iraqi officials admit that this
favoritism has only one purpose: to buy Russian support. Saddam Hussein has
also offered Russian companies the rights to vast future energy development
projects - worth, Russians boast, as much as $60 billion.

That is why Russian oil and gas companies and major exporters to Iraq want
Putin to maintain Iraq's favor by making sure that inspections do not
threaten Saddam. Meanwhile, the Russian nuclear power industry wants him to
keep Iran's favor by making sure that restrictions at Bushehr do not block
covert nuclear cooperation. So far both groups are getting what they want.
Russian officials tell Americans they are ready to discuss ways to ensure
that the Bushehr reactor does not help Iran's nuclear weapons program. But
the offer is irrelevant as long as Russia provides Iran dangerous nuclear
assistance outside of the Bushehr project - and denies it. The Bush
administration may not be willing to put up with double-dealing on this
issue for very long.

Putin can't be happy with the box he is in. If he yields to pressure from
Bush, he gives an opening to critics who say he lets Washington push him
around. But rejecting U.S. concerns, which some of his advisers clearly
favor, takes the shine off a relationship that is now the centerpiece of
Russian foreign policy.

There is a way to ease Putin's predicament that could help him avert a clash
with Washington without seeming to embrace American policy outright: He can
close the gap between Russian actions and Russian rhetoric. If Russian
diplomats became unyielding advocates of an exhaustive and unconditional
inspections regime in Iraq - and showed they meant it - they would not be
doing Washington's bidding but carrying out their own stated policy. And if
Putin stopped letting the nuclear power establishment provide dangerous
technology to Iran - something he says he opposes - he would be enforcing
official Russian policy.

Neither Tehran nor Baghdad will like Russian policies that mean what they
say. Saddam may retaliate by ending the favoritism that Russian companies
now enjoy. The Iranians may say that if the flow of illicit technology is
cut off they will cut back their legitimate trade with Russia, too.

Standing up to Russian business interests will carry political costs for
Putin. But by doing so, he can enhance American confidence in the new
partnership with Russia - perhaps enough to get Washington to discuss how
Russia's economic sacrifices should be recognized.

The writer is a senior fellow at the Council on Foreign Relations and
professor of international diplomacy at Columbia. He contributed this
comment to The New York Times.


by Nidal al-Mughrabi
Swissinfo (from Reuters), 1st June

RAFAH, Gaza Strip: Iraqi President Saddam Hussein's popularity has soared
among Palestinians thanks to the millions of dollars he has funnelled to
families who have lost menfolk waging an uprising against Israeli

Many Palestinians fault Arab leaders for failing to extend them practical
support in their 20-month-old revolt, and Saddam is regarded as a tyrant in
Israel and the West, but he gets high marks from people like Rawheya Elian.

Elian, a mother of seven whose husband was killed last September near a
Jewish settlement in the Gaza Strip, typifies thousands of bereaved
Palestinians getting money from Iraq.

"It's an unfair world," said Elian, who plans to use her $10,000
compensation (6,890 pounds) to renovate her two-room house in the Rafah
refugee camp, scene of frequent Israeli-Palestinian violence.

"I want to know who is the terrorist," she said. "Is it Saddam Hussein, who
helps the orphans, or (Israeli Prime Minister) Ariel Sharon and (U.S.
President) George Bush, who kill the children of Palestine and Afghanistan?"

Pro-Iraqi Palestinian officials say Iraq has paid at least $5 million to
Gaza families whose relatives have been killed.

Israel has accused Saudi Arabia and Iraq of compensating the families of
suicide bombers who have killed scores of Israelis. It says this amounts to
incitement to kill Israelis and regards Iraq as one of the main threats to
stability in the Middle East.

Palestinian officials say the money goes to the families of all people
killed, whether they are militants or civilians.

Ahmed Bahar, chairman of a main Islamic charity in the Gaza Strip, said it
receives money from non-governmental charities worldwide, including some
based in Saudi Arabia, and it goes to orphans, the wounded, prisoners and
needy families.

"The target is orphans, all orphans, even those whose fathers had been
killed because they collaborated with Israel," he told Reuters. "Therefore
the accusations by the Zionists are unfounded and baseless."

The Saudi government, along with other international donors such as the
European Union, provides financial assistance to the Palestinian Authority.
Israel says President Yasser Arafat diverts some of this money to factions
involved in violence.

Iraqi flags and posters of Saddam, popular with Palestinians for his
defiance of Israel's main ally the United States, are a common sight at
Palestinian rallies in support of the uprising.

Saddam won acclaim among Palestinians and many other Arabs during the
1990-91 Gulf crisis when he fired Scud missiles at Israel and sought to make
any Iraqi withdrawal from Kuwait conditional on an Israeli pullout from
occupied Arab land.

Apart from providing money for the relatives of suicide bombers, Iraq has
financed the re-housing of dozens of families whose homes were demolished
deliberately by the Israeli army.

Ibrahim al-Za'anin, an official of the pro-Iraqi Arab Liberation Front, said
every family that looses a son in battle with Israeli troops gets $10,000.
Relatives of a Palestinian who carries out a suicide attack get $25,000.

"President Saddam made clear that (such) attacks must be considered the
utmost act of 'martyrdom'," Za'anin said. "Iraq is not looking for fame.
With these gifts, Iraq wants to tell Palestinians that it stands beside
their struggle for freedom."

Za'anin said Iraq had paid $25,000 to each family that lost its home when
the Israeli army bulldozed scores of buildings in the Jenin refugee camp in
a battle with militants last month.

"Usually every homeless family gets $5,000 but Jenin won special status
because of its steadfastness and now-legendary resistance to Israeli
occupation forces," Za'anin said.

The payments represent fabulous sums relative to the abject poverty into
which many Palestinians have been thrust since the uprising flared in
September 2000.

A recent World Bank study found that half of the people in the West Bank and
Gaza Strip were living below a poverty line defined as an income of less
than $2 a day.

The Arab Liberation Front has distributed money at ceremonies to honour the
dead in Gaza and the West Bank, such as one on May 20, when its
representatives handed out $500,000 to 48 grieving families in Khan Younis
and Rafah in the Gaza Strip.

Each family received $10,000 except for $50,000 divided between two families
whose sons died on a joint suicide mission against a Jewish settlement in
the Gaza Strip.

The crowd waved Palestinian and Iraqi flags and held posters of the Iraqi
leader. "Dear Saddam, bomb Tel Aviv," they chanted.

The father of Musa'ad Daoud, who was killed attacking soldiers guarding a
Jewish settlement, said he would spend his $10,000 cheque on medical
treatment for himself and his brother.

"We wish all Arab leaders acted like Saddam. It is not an issue of money but
respect and appreciation for our struggle," he said.

Every family of a "martyr" also gets a certificate of honour from Iraq's
ruling Baath party that reads: "The enemy will be defeated in the face of
your blessed will."

Sharon told Bush when they met earlier this month that Saudi Arabia funded
the families of Palestinian suicide bombers.

Ahmed al-Kurd, chairman of al-Salah Islamic association, said such claims
were intended to deter charities in the Arab world and in the West from
supporting the Palestinians.

"Just like Christians and any international charity in the world, Islamic
charities have only one humanitarian goal -- to help the needy regardless of
their identity, nationality or religion," he told Reuters.

He recalled that before the creation of the Palestinian Authority under the
1993 interim peace accords with Israel, similar social and humanitarian work
was carried out by Israel's civil administration of the West Bank and Gaza

Kurd said Sharon's accusations against Saudi Arabia were "fabrications and

Saudi Arabia has been a key financial backer of Palestinians during their
54-year-old conflict with Israel and raised its diplomatic profile recently
when Crown Prince Abdullah proposed a peace plan offering Israel normal ties
with Arab states if it vacated occupied lands.

Daily Star (Lebanon), 4th June

A Lebanese delegation on Monday left for Iraqon a six-day trip  during which
it is expected to hold talks with Iraqi officials, including that countryıs
parliamentary speaker, Saadoun Hammadi, and other officials.

The delegation included Metn MP Antoine Haddad, Rashaya MP Faisal Daoud,
Akkar MP Mohammed Yehya, Jezzine MP George Najm, and Beirut MP Ghinwa
Jalloul as well as two consultants - Fares Saad and Joseph Sebaali.

The visit is aimed at ³strengthening relations between the two countries
with regard to various legislative issues,² Haddad told reporters before
leaving for Baghdad.

During the visit, the delegation will also work to consolidate³Lebanonıs
solidarity with Iraq and condemn the siege it has been facing² under UN
sanctions, Haddad added.

USA Today, 4th June

WASHINGTON (AP) ‹ The Pentagon is planning to sell Kuwait advanced
air-to-air missiles to help the country protect itself against what the
Defense Department called "hostile neighbors."

The Defense Security Cooperation Agency said Tuesday it had notified
Congress that it plans a $58 million deal that would include 80 Advanced
Medium Range Air-to-Air Missiles (AMRAAM), launch equipment, training
missiles, software updates and other related equipment and services.

The system allows a fighter pilot to launch the weapon from beyond visual
range of his target. It also provides a greater capability to attack
low-altitude targets.

"Kuwait is threatened by hostile neighbors with credible air, land and sea
forces," the DSCA said in a statement. "While the nation depends on external
support, the Kuwaiti Air Force must have adequate ... capabilities to
protect its vital resources during the early part of a possible invasion
until allies can arrive with reinforcements."

Small, oil-rich Kuwait is a strong ally of Washington, which led the
international coalition that fought the 1991 Gulf War to end the seven-month
Iraqi invasion and occupation of Kuwait.

Kuwait still depends on its Western allies, mainly the United States and
Britain, for defense. U.S. and British war planes fly from Kuwait to patrol
a no-fly zone over southern Iraq established after the war to protect the
Shiite Iraqi opposition from Iraqi troops.

by Pepe Escobar
Asia Times, 5th June

TEHRAN - Iran holds about 9 percent of proven world oil reserves.
Twenty-three years after the Islamic revolution in 1979, the main problem of
the Iranian economy remains its dependence on oil revenues. The state is
ubiquitous - and mostly inefficient - as it distributes the revenues
generated by a highly concentrated industrial sector. The bottom line is
that the whole Iranian economy still depends on the price of a barrel of

Gas and gasoline cost practically nothing in Iran. But internal consumption
is increasingly absorbing more production - now more than a third of the
total. And oil installations need to be modernized. The only way to do it is
with the help of foreign investment.

After the revolution and the eight-year Iran-Iraq war that followed soon
afterwards, industrial production was roughly cut in half, and so was the
oil revenue per person - because of the demographic explosion. The war was
literally a disaster for Iran. Most of the oil revenue went to the war
machine - a factor that also justified high state centralization. Meanwhile,
the industrial structure was falling to pieces. There was absolutely no

The traditional private sector in Iran has always been what Iranians as a
whole call the bazaar. But the bazaar never invested in production. The
bazaar is pure speculation: so how could it not be in favor of state
centralization, which handed the bazaar endless opportunities for increasing
speculation. The bazaar never wanted less, but more state support, including
low taxes, so that it could feel free to speculate with gold, with the
dollar, with real estate, with products imported from the West or those made
in Iran, such as Peykan and Peugeot cars.

The state in Iran subsidizes basic products sold in state-sponsored malls -
available to the general public or to a particular sector of the population,
like families of martyrs. This redistribution sort of compensates the social
revolution that in fact never happened in Iran. One of its side effects is
that it does not offer any incentives for productive investment.

A lot of people in Iran - about 35 percent of the active population - seem
to be state employees. According to professors who agreed to speak to Asia
Times Online off the record, these people have no other option than to
settle for these low salaries because after the revolution the regression of
industrial development was nothing less than drastic. There are many causes
for the regression: the effects of the war; massive state intervention;
speculation; bureaucratic corruption; and the brain drain of intellectuals,
engineers, captains of industry.

More foreign investment would be an excellent solution. But comparing
Ministry of Industry numbers with other developing countries, one finds out
that foreign investment per person is 35 times as high as in Mexico, almost
120 times as high as in Malaysia, and almost 170 times as high as in China.

The "Islamic economy" has not really transformed the Iranian economy. It's
more like a code to apply more state control or to develop certain parts of
the private sector.

No less than 40 percent of the Iranian gross national product (GNP) is under
the control of the so-called foundations - bonyad - which themselves are
outside any government control. One of them - the Foundation for the
Disinherited - controls more than 400 companies, and is the largest
conglomerate in the Middle East. It is not public, nor private. In fact, it
is public, but not state-controlled. This foundation is responsible for
nothing less than 28 percent of textile products, 42 percent of cement, 45
percent of non-alcoholic beverages, 28 percent of tires and 25 percent of
sugar consumed in Iran.

The bonyad were created immediately after the revolution to manage
confiscated wealth. They used to be the ultimate instrument of social and
economic advance for the revolutionary elite. They operate like holding
companies - managing hotels, airline companies, publications. No institution
in Iran even today would be able to force then to be more transparent: this
would require tremendous political mobilization.

The people who direct these foundations are more or less invisible. They
don't belong to an economic elite, like in many European countries, but
among those who were involved in the war in the Revolutionary Guard
(Pasdaran). The foundations are under the direct control of the leader of
the revolution, Ayatollah Ali Hoseini Khamenei. So no wonder that they are
in direct contradiction with the reformist movement of President Mohammad
Khatami, and even with the bazaar. Parts of the bazaar want to reinvest in
the productive sector. But they simply cannot compete with what they
consider the unfair privileges of the foundations.

Khatami was elected president in 1997, promising, among other things,
economic liberalization. But Khatami is not exactly interested in economics.
And neither are those who support him. The Islamic left may be
pro-democracy, but still believes in the economic power of the state.
Technocrats threaten at the most to increase taxes to force the private
sector to move. And the more liberal parts of the bazaar are still very cozy
with the conservatives.

An informal inquiry in the bazaar will reveal that merchants are most of all
against the absurd privileges enjoyed by the foundations. They also want a
more calibrated foreign policy - and the end of the American sanctions. This
is exactly what the Iranian diaspora in the US also wants - because they are
itching to invest again in Iran.

More liberalization will inevitably lead to more realistic prices - and thus
further and brutal impoverishment of a population that at least now has
access to subsidized oil, gas, bread and a few basic products. But even with
more liberalization there won't be a group of Iranian entrepreneurs capable
of driving the economic development train. And to increase the state budget
- apart from oil revenues - Iran would need to collect more taxes. Seventy
percent of the productive population simply does not pay taxes - and this
includes all of the crucial foundations.

Critics - internal and external - may complain that reforms in Iran are too
slow. In fact, the reformists are not in a position to dismantle a whole
system of collusion - involving the foundations, a plethora of subsidies and
access to foreign currency. This system is operated by the social base of
the Islamic regime - the conservatives.

So far, liberal initiatives have been only cosmetic - like the possibility
for nouveaux riches to have access to new markets, such as the pleasant
island of Kish in the Persian Gulf, one of the new Iranian free zones.

Mousa Ghaninejad is an economics teacher at the Oil University. His analysis
confirms all the main points of this survey. He says, "For years we have
been producing below capacity and wasting our assets - especially in the
energy sector. Currently, the economy is in a relatively good shape only due
to high oil revenues."

Mousa recognizes that certain reforms at least took place, "such as the
amendment to the taxation laws, the formation of the single-tier hard
currency system and the establishment of a private banking system". But he
acknowledges that the pace of reform is excruciatingly slow. "They only now
have reached the conclusion that we must pursue a free market economy."

There is a lot of hesitation in moving forward "because the reformists are
short of planning schemes and merely give out the slogan of freedom", Mousa
says, adding, "the spirit of competition does not have any place and
everything is summed up in oil revenues". For the moment, he does not
believe it is possible to change the mentality of Iranian officialdom.

So the winds of liberalization in Iran are still not blowing towards the
productive sector. Pure speculation is still king - like real estate
speculation in Tehran, where land is very expensive, although with no
relation with the degree of economic activity. The foundations, above all,
are benefiting from privatization. Is there a solution? Yes: more political
opening, which would attract foreign investment, and investment from the
Iranian diaspora. This is the only way to undermine the privileges enjoyed
by the elite of the Islamic regime. The ball, once again, is in President
Khatami's and the parliament's court.

by Dania Saadi
Daily Star, Lebanon, 5th June

Some people call it AFTA while others refer to it as GAFTA, and now the
agreement will probably be known as PAFTA. But these acronyms share a common
denominator - an effort to create an Arab free trade zone by 2005.

The series of understandings which first began in the 1980s with the Arab
Free Trade Agreement are all a bid to ultimately create a united Arab
economy - with some 14 countries enjoying the liberalization of the
industrial and agricultural sectors.

In the last Arab summit, which took place in Beirut earlier this year, Arab
leaders agreed to include a wide range of new issues on the Arab economic
agenda, such as the liberalization of services.

Now officials from the public and private sectors are preparing for 2005 and
are working to resolve a list of obstacles that have slowed down the
economic integration process.

³By the end of this year, we hope to conclude the detailed identification of
the country of origin rules and remove all exemptions on tariffs cuts,² said
Muatasem Suleiman, director of the Finance, Trade and Investment Department
at the Social Economic Council in the Cairo-based Arab League.

The country of origin rules, which define the origin of raw materials that
go into making a product, are important because they allow Arab goods to
enjoy tariff-free access in the Arab trade zone.

The Arab countries who have started to implement tariff reductions on
industrial goods, which are expected to reach zero by 2005, have agreed on a
general formula to provide preferential treatment for Arab goods that have a
40 percent value-added component.

³We need country of origin rules to prohibit foreign (non-Arab) goods from
benefiting from preferential treatment inside the Arab free trade area,²
explained Suleiman.

The rules also define the power of regional blocs.

The European Union, which started off with a coal and steel coalition in
1950s, has developed into a global bloc selling its rules and standards to
former Soviet-bloc countries.

³We need to have our own country of origin rules that serve our interests
and adopting European Union rules does not necessarily work for us,² said

For instance, officials overseeing the Arab free trade area have chosen a
different set of rules for coffee beans.

In the European Union, just roasting an imported bean inside the union gives
it EU origin, but in the Arab world, the bean should be imported from an
Arab country.

³The EU does not grow beans so it makes sense to just demand a simple
roasting process,² Suleiman explained.

³However, in the Arab world, we need to protect Yemenıs bean production. If
we were to use the EU rule, our markets could be swamped, letıs say by
Brazilian beans, at the expense of our industry.²

But agreeing on country of origin rules for products that are to enjoy
tariff-free access inside the Arab free trade zone does not appear to be the
only contentious issue.

When the 14 countries agreed to drop their tariffs to zero, they chartered a
wide-ranging list of exemptions to allow certain sensitive industries to
acclimatize to free market access.

³By September of this year all exemptions should be dropped and countries
will not be allowed to introduce new ones without a detailed explanation,²
said Suleiman.

³Anyway the exemptions granted to Arab countries were temporary and were not
allowed to exceed 15 percent of total inter-Arab trade volume Š on the
ground, only 6 percent of total inter-Arab trade was subject to exemptions.²

He argued that the World Trade Organization, which allows for the creation
of regional blocs, allows exemptions for up to 20 percent of total
inter-trade within regional blocs.

³For instance, the exemptions granted to Egypt on textiles within the Arab
free trade area have already been secured from the WTO,² he added.

He also brushed off official figures that put inter-Arab trade as low as 7

³This figure does not include Arab trade with (sanctions-hit) Iraq,² said
Suleiman. ³If we are to take into consideration trade with Iraq, which is at
least $2 billion, the figure would jump to over 10 percent. This figure will
also increase if we are to exclude oil products.²

Despite all criticism, the Arab free trade area has scored points in a
number of countries, according to Suleiman.

³Omanıs trade volume with the Arab world has increased by 75 percent over
the last three years due to the agreement,² he said. ³Can you believe that
Oman is exporting fish to Tunisia, a marine-rich country?²

The steps being taken for an eventual free trade area may be helping, but
there still exists lingering problems within Arab countries, which would
probably remain until 2005.

³Problems of standards and technical barriers will remain until the
transitional period is over and we enter the free trade area in 2005,² said
Suleiman. ³They will disappear completely with the creation of an Arab
customs union.²

People's Daily, 7th June

Iraqi President Saddam Hussein on Thursday sent a telegram of condolences to
his Syrian counterpart Bashar al-Assad over the human and material losses
caused by the collapse of the Zeyzoun dam in Syria's northern Hama Province
on Tuesday.

Iraqi President Saddam Hussein on Thursday sent a telegram of condolences to
his Syrian counterpart Bashar al-Assad over the human and material losses
caused by the collapse of the Zeyzoun dam in Syria's northern Hama Province
on Tuesday.

"We received with great sadness the news of the collapse of the Zeyzoun dam
which caused the deaths of a number of our Syrian brothers as well as
material losses," Saddam said in the telegram carried by the official Iraqi
News Agency (INA).

Saddam expressed in the telegram condolences to the Syrian president, the
Syrian people and the victims' families, the INA said.

Syrian media reported on Thursday that at lease 20 people were killed and
four others missing in the dam collapse.

Although Syria joined the United States-led multinational coalition army
against Iraq in the 1991 Gulf War, relations between the two countries,
ruled by rival branches of the pan-Arab Baath party, have witnessed rapid
development in recent years.

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