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News, 29/6-6/7/02 (3) OIL * GCC states take $20b oil price hit * BAGHDAD: Iraq ups West Qorna output * Iraq to drill wildcats IRAQI OPPOSITION * Iraq rebels oppose U.S strike to topple govt-paper * Iraqi exiles dream of toppling Hussein IRAQIS OUTSIDE IRAQ * Activists accused of 'dumping' asylum-seekers in the desert * Officials: Saddam's stepson admits mistake over US visa POLICING THE BLOCKADE * U.S. Bombs Iraqi Defense System PROSPECTS FOR WAR * US has plan to kill Saddam, says Iraqi opposition leader * Time to deploy a large American military force * Failure of other efforts led U.S. to plan war on Saddam IRAQI/UN RELATIONS * UN: United Nations Compensation Commission approves awards of USD4.9Bn for compensation * UN deal leaves Iraq's Kurds at mercy of Baghdad * Iraq, UN fail to agree on arms inspections OIL http://www.gulf-news.com/Articles/news.asp?ArticleID=56113 * GCC STATES TAKE $20B OIL PRICE HIT by Nadim Kawach Gulf News, 30th June A decline in oil prices and production cost the six GCC countries more than $20 billion last year to depress their gross oil export earnings to around $106.3 billion and turn a budget surplus into a deficit in some members, according to a UN estimate. The UAE and the other five members, Saudi Arabia, Bahrain, Kuwait, Qatar and Oman, earned nearly $129 billion in 2000 when crude prices climbed to an average $27, one of their highest levels since the end of the oil boom in early 1980s. This means their revenues shrank by nearly $22.7 billion in 2001 as a result of a 16.2 per cent decline in average crude prices and output cuts in line with a collective agreement between Opec and other producers to prevent a price collapse. According to the UN's Economic and Social Commission for West Asia (ESCWA), Saudi Arabia was the main victim of last year's loss given its huge supplies which accounted for more than half the GCC's total oil supplies of 14 million barrels per day. >From around $75 billion in 2000, Saudi Arabia's earnings slumped by nearly 20 per cent to $59.4 billion in 2001, while the UAE lost around $four billion to $18 billion. Kuwait's oil revenues contracted by $three billion to $13.2 billion while the crude export income of the other member states also recorded declines. "The performance of the oil sector in the GCC and other ESCWA members was not strong as it was in 2000. Prices slipped by around 16.2 per cent, while overall production dropped by nearly 600,000 bpd to 18 million bpd," the report said. It said the bulk of production cuts were recorded in Saudi Arabia and the UAE, whose actual supplies were down by 2.2 and 1.6 per cent, respectively. Kuwait and Qatar boosted their output by nearly 2.9 and 5.1 per cent in 2001. "The decline in the oil revenues had a stronger impact on the economies of the GCC countries given their heavy reliance on oil exports," said ESCWA, which groups the GCC with Yemen, Lebanon, Jordan Syria, Iran, Iraq and other Middle Eastern countries. "Their budgets and current account were also hit, for example, Saudi Arabia and Bahrain recorded a large surplus in 2000, but it turned into an actual deficit of around 1.6 and 4.1 per cent of the gross domestic product in 2001. As for the UAE, it recorded a slight shortfall in 2000 but it was bigger in 2001 because of high spending and lower income." The report gave no forecasts for this year but the London-based Centre for Global Energy Studies, which is owned by former Saudi Oil Minister Ahmed Zaki Al Yamani, expects the GCC's revenues to extend a downward trend because of additional supply reductions and a projected fall in prices to around $22 from $23.5. The Centre's latest outlook for the GCC's combined oil sales is around $90 billion this year, nearly $16 billion below 2001. http://www.worldoil.com/news/newsstory.asp?ref=http://22.214.171.124/feeds/wo rldoil/new/article_e.asp?energy24=252103 * BAGHDAD: IRAQ UPS WEST QORNA OUTPUT World Oil (from AFP), 2nd July Iraq has increased oil production at the West Qorna fields in the south of the country to 140,000 barrels per day (bpd), and may increase it further, weekly newspaper al Rafidain reported, citing a state oil company official. Abdel Bari Mahmoud Chawket, chairman of the Southern Petrol Company, said the company "has succeeded in raising production in the West Qorna fields by 40,000 barrels per day to 140,000," adding that this "could be progressively increased." At the end of May, oil minister Amer Mohammad Rachid said Iraq had started to develop two oil fields in the south of the country, "by our own means and without any assistance from foreign companies." http://www.worldoil.com/news/newsstory.asp?ref=http://126.96.36.199/feeds/wo rldoil/new/article_e.asp?energy24=252101 * IRAQ TO DRILL WILDCATS World Oil, 2nd July According to local reports, Iraq is planning to dig up to 20 exploratory oil wells in a bid to boost its reserves. Rafid Abdulhalim, Oil Ministry official and chairman of Oil Exploration Company, told state-owned weekly newspaper. Al-Ittihad that the wells will be dug up to a depth of more than 600 meters in 2003 in areas still not fully explored. The digging will be the first by the ministry since the United Nations imposed sweeping trade sanctions on Iraq for its 1990 invasion of Kuwait. The ministry claims Iraq sits on some 280 billion of probable reserves, mostly in the little explored desert west of Baghdad. IRAQI OPPOSITION http://www.cnn.com/2002/WORLD/meast/06/29/iraq.opposition.reut/index.html * IRAQ REBELS OPPOSE U.S STRIKE TO TOPPLE GOVT-PAPER CNN, 29th June CAIRO, June 29 (Reuters) -- A major Iraqi opposition organization said in remarks published on Saturday that Washington should seek to oust President Saddam Hussein through U.N. resolutions and not by military force. Speculation has been mounting that Washington might be preparing an invasion of Iraq to oust President Saddam Hussein, whom it accuses of developing chemical, biological and nuclear weapons. In an interview with al-Hayat pan-Arab newspaper, Mohammad Baqer al-Hakim, head of the Supreme Council for the Islamic Revolution in Iraq, (SCIRI), said he was concerned a possible U.S. attack on Iraq might result in the occupation of the Arab country. SCIRI is Iraq's largest Shi'ite Muslim dissident organization and claims to have up to 8,000 fighters operating inside Iraq. It has vowed to topple Saddam's Sunni Muslim dominated government. "We are living a state of great worry...from the probability of an attack that would reach many of our people's sons and Iraq's basic infrastructure, as it would also lead to an invasion operation and occupation of Iraq," Hakim said. Hakim, a senior Shi'ite cleric, has lived in Iran with many of his fighters since the 1980-88 Iran-Iraq war. He also has followers among the 500,000 Iraqi refugees living in the Islamic republic. "We think the United States could only assist the Iraqi people by protecting them from operations of oppression practiced by the regime. When it (United States) puts pressure on it (the Iraqi authorities) to stop oppressive operations, then the Iraqi people could undertake an operation of change," Hakim added. His comments in al-Hayat seemed to indicate a shift in position from earlier remarks, which welcomed a U.S. military offensive to topple Saddam's rule. Hakim told al-Hayat that the best alternative to Saddam Hussein would be a parliamentary government that represented all Iraqi factions equally. In December, Hakim told Reuters in an interview that SCIRI and other opponents of the Baghdad regime, including Iraqi Kurds, had agreed on forming a broad-based transitional government for one year. After that a government should be formed through a national referendum. Hakim also stated in the December interview that his organization would welcome attacks to topple Saddam as part of Washington's declared war on terrorism, as long as it did not threaten Iraqi independence. Many Arabs, already critical of Washington over its support for Israel in the Middle East crisis, have voiced opposition to any U.S. strikes on Iraq. The U.S. State Department said in early June that it planned to have a conference of Iraqi opposition groups during the summer and was organizing preparatory meetings. U.S. officials say the aim would be to talk about what Iraq should look like after the departure of Iraqi President Saddam Hussein. U.S. President George W. Bush, who accuses Iraq of being a part of an "axis of evil" together with North Korea and Iran, has openly declared his desire to remove Saddam by military force if necessary, but has offered few details of how he plans to accomplish that. http://www.baltimoresun.com/news/nationworld/bal te.iraqis04jul04.story?coll=bal%2Dnews%2Dnation * IRAQI EXILES DREAM OF TOPPLING HUSSEIN by Tom Bowman Baltimore Sun, 4th July WASHINGTON - When Thair Nakib's thoughts turn to Iraq, he sees his family's three-story stone house, shaded by palms on a Baghdad side street, his room brimming with boyhood swimming trophies and medals. And there was his grandfather's farm, about an hour from the city, where he and friends would spend summer days fishing in the river, riding horses or picking apples and peaches. That was more than 30 years ago, before his father, an army general, defected, just before a little-known general named Saddam Hussein seized power. "Saddam confiscated the house and farm," recalled Nakib, who for the past two years has lived in an apartment in Cockeysville with his wife and two children. "We left everything behind." Nakib is now the Washington representative of the newest Iraqi opposition group, the Iraqi National Movement, a collection of exiles - about 40 former Sunni Muslim military officers and political leaders - that was formed last year in a break with an opposition umbrella group. Eager to aid the Bush administration's effort to topple Hussein's regime, Nakib heads south on Interstate 95 four to five days a week to meet with State Department officials, congressional staffers and other opposition leaders. In coming weeks, the Iraqi National Movement will receive $315,000 in federal money to travel, visit fellow opposition figures and maintain a base in Damascus, Syria. Like others in the fractious Iraqi opposition, Nakib, 42, is heartened by the flurry of meetings with Bush administration officials and by plans for a conference in Europe this summer, organized by either the opposition or the State Department. "Some of the opposition groups say it would be better if they do it, so we're talking about it," a senior Bush administration official said. "The opposition folks feel that if the U.S. sponsored it, with U.S. money, it makes them look like stooges and puppets." "They're laying the groundwork" for the overthrow of Hussein, said Falah Nakib, Thair's 45-year-old brother. Falah Nakib lives in Damascus with their father, Hassan Nakib, a former Iraqi army deputy chief of staff, who in 1992 co-founded the opposition umbrella group, the Iraqi National Congress. "The message we're getting" about a U.S.-led invasion, Thair Nakib said, "is end of the year or next," after the U.S. elections. "The State Department is saying, 'We don't want to speak too loudly and give high expectations. Let us prepare ourselves, and then we'll send the message'" to the Iraqi people. Thair Nakib, who followed two sisters to the Baltimore area, recently left a management job at a health care company that brought doctors from the United Arab Emirates to train at Johns Hopkins Hospital. He now devotes his energies full time to Iraqi opposition work. Wearing casual clothes and chain-smoking as they relax in Georgetown Park, a boutique mall on M Street, the Nakib brothers could pass for well-fed international businessmen. Chatting in heavily accented English, they are the educated children of privilege, who count two physicians and an architect among their five siblings. The children followed their father on military and diplomatic postings from Egypt to Jordan, from Spain to Sweden. Neither brother has military experience. Thair Nakib wonders how many friends died in the war with Iran in the 1980s. "Saddam took all my generation to the Iran-Iraq war," he said. Though they have been working with anti-Hussein groups since the end of the Persian Gulf war, Thair and his brother now do much of the legwork for their 73 year-old father, who is chairman of the Iraqi National Movement and expects to visit Washington next month to meet with administration officials. The elder Nakib defected after Hussein had begun systematically executing senior military officers, many of them his friends. Thair Nakib's uncle was seized by Hussein and remains in prison, and other relatives are under watch, barred from leaving the country. The national movement could help attract more dissident Iraqi officers, many of them fellow Sunni Muslims, to the opposition cause, said Carole A. O'Leary, a professor in the School of International Service at American University. Such officers could take part in a U.S.-led invasion or help create a post-Hussein government. "We are coming to liberate them," Falah said. "Then we will see large concentrations of [the Iraqi army] flee. That's for sure." [.....] Like some other opposition figures, Thair and Falah Nakib complain that Chalabi runs the INC as a private group rather than an umbrella organization. The brothers say that within the INC, Chalabi tried to marginalize Sunni Muslims - who make up about 25 percent of the Iraqi population. Chalabi is a Shi'a, who constitute about 55 percent. Kurds make up about 20 percent. [.....] The Nakib brothers and others in their group say they believe that the best plan for overthrowing Hussein would be a small U.S. force - perhaps 40,000 or so - that could be supplemented by defecting Iraqi troops. In the early spring, the brothers shared their thoughts on Iraqi troop morale and an overthrow of Hussein with Gen. Wayne A. Downing, Bush's just-departed deputy national security adviser for counterterrorism. Before going to the White House, Downing worked with the Iraqi National Congress on a similar U.S. invasion plan that envisioned the use of American Special Forces troops and Iraqi military defectors. A smaller U.S. force would seem more "like a liberating army than an invasion army," Thair Nakib said. His brother added, "Everyone - the [Iraqi] army, [Hussein's] Ba'ath Party - has to know we're coming to help them, not kill them." Sun staff writer Mark Matthews contributed to this article. IRAQIS OUTSIDE IRAQ http://news.independent.co.uk/world/australasia/story.jsp?story=311158 * ACTIVISTS ACCUSED OF 'DUMPING' ASYLUM-SEEKERS IN THE DESERT by Kathy Marks in Sydney Independent, 2nd July Police accused activists yesterday of dumping asylum-seekers in the Australian desert without food or shelter after encouraging them to break out of a remote detention centre. Fears are mounting for the safety of 10 men, including two boys aged 12 and 14, who are still on the run after escaping from the camp at Woomera on Thursday evening. Night-time temperatures have since plunged below zero, and some detainees were suffering from exposure when recaptured. Thirty-five people, from Afghanistan, Iran and Iraq broke out of the centre after protesters used cars to demolish a perimeter fence. Immigration officials say all those who escaped have had applications for asylum rejected and were being held pending the outcome of appeals. South Australian police said they were looking for two young women believed to have left 10 asylum-seekers near the opal mining town of Coober Pedy, 180 miles north of Woomera. The asylum-seekers fled in darkness across an area pitted with unmarked mineshafts after the vehicle in which they were travelling a van painted with flowers was stopped at a police roadblock. The two women drove off. Another group of 13 detainees was abandoned on an isolated stretch of highway without food or water. When they were found, they had been huddled around a campfire for two nights. Police inspector Des Bray said they were dropped off hours after the break-out by the protesters, who promised to come back to collect them. "It defies logic that you break these people out and then just leave them there," he said. Three people have been charged with assisting an escape, and yesterday Peter Hore, said to be a "serial pest", appeared in court for the same offence. Hore has disrupted public events such as the Australian Open tennis tournament and the funeral of the rock star Michael Hutchence. Twenty recaptured asylum-seekers also appeared in court, charged with escaping federal custody, and were remanded to reappear in court in Adelaide later this week. If convicted, they will probably be deported. Detainees at Woomera have staged several protests against conditions at the centre. The latest protest is a hunger strike, which entered its eighth day yesterday. http://thestar.com.my/news/story.asp?file=/2002/7/6/latest/5974Officials&sec =latest * OFFICIALS: SADDAM'S STEPSON ADMITS MISTAKE OVER US VISA The Star (Malaysia), 6th July AUCKLAND, New Zealand (AP) - Saddam Hussein's stepson, being held in Florida for immigration violations, has admitted he made an error in his application for an entry visa to the United States, officials in New Zealand said. The Iraqi leader's stepson, Mohammed Nour al-Din Saffi, a citizen of New Zealand, now accepts he will be deported from the United States after failing to get the proper visa to cover his flight training program, New Zealand Foreign Ministry spokesman Brad Tattersfield told The Associated Press on Friday. Saffi, a 36-year-old engineer with the national airline, Air New Zealand, was enrolled for a pilot recertification course but entered the U.S. on a tourist visa. He was planning to study at a flight school believed by the FBI to have been used by one of the Sept. 11 hijackers. Saffi was arrested by immigration and FBI officials in Florida on Wednesday. Jimmy Brooks, director of air freight company Tiger Lines Cargo, claimed Friday he sent Saffi to a Miami flying school to get his Boeing 727 pilot's license re-certified. Brooks told The Associated Press that Saffi planned to work part time for his Auckland-based company as a flight engineer. The company has yet to begin operations. Brooks said Saffi was supposed to practice in a simulator with two U.S.-based pilots. "We didn't know he needed a student visa,'' Brooks said. An INS official, speaking on condition of anonymity, said in Washington any foreign national who enters the United States has a responsibility to enter the country under the proper visa. A State Department official said Saffi could have taken advantage of a visa waiver program that Washington maintains with a number of friendly countries, including New Zealand. It enables prospective visitors to arrive at a U.S. port of entry without a visa. They are subject to scrutiny by the Immigration and Naturalization Service, which can deny admission if its database shows they are not qualified for entry. Berton Beach, a vice president of operations with Aerospace Aviation Center in Florida, said the company was unaware of the visa requirements. Beach said the company filed an application with the Justice Department to allow them to train Saffi. It included an authorization to conduct a background check, his passport, national identification card, his address and his employers' address. The company received approval from the Justice Department on June 26. A spokesman for New Zealand Prime Minister Helen Clark said the government had "no evidence that he is connected to terrorist activity or to terrorist organizations.'' Tattersfield said Saffi had contacted New Zealand Embassy officials in Washington "who are convinced that Saffi entered the United States for the purpose of study.'' "Saffi accepts he has made a mistake. ... He's going to be deported, within a matter of days,'' Tattersfield said. New Zealand police said they cooperated with U.S. authorities over Saffi's arrest. Detective Superintendent Bill Bishop, the national crime investigations manager, said Saffi was "one of several'' people being monitored by police, but declined to say whether Saffi posed any security threat. Saffi is the eldest son of Samira al-Shahbandar, Saddam's second wife. His father is Nour al-Din Saffi, an aviation engineer and former head of Iraqi Airways. Mohammed Saffi is believed to have left Iraq after the 1991 Gulf War first to neighboring Jordan and then to New Zealand where he has been for six years. http://www.newsday.com/news/nationworld/world/wire/sns-ap-us iraq0704jul04.story?coll=sns%2Dap%2Dworld%2Dheadlines POLICING THE BLOCKADE * U.S. BOMBS IRAQI DEFENSE SYSTEM Associated Press, 4th July ANKARA, Turkey -- American warplanes bombed an Iraqi air defense system Thursday after coming under attack from Iraqi anti-aircraft artillery, the U.S. military said. The aircraft were making routine patrols when Iraqi forces fired artillery at them near the northern city of Mosul, the U.S. European Command said in a statement. "Coalition aircraft responded to the continued Iraqi attacks by dropping precision ordnance on elements of the Iraqi integrated air defense system," the Germany-based command said. "All coalition aircraft departed the area safely." In Iraq, the official news agency said U.S. and British warplanes damaged a house and killed several cows and sheep in the airstrikes, but the report did not cite any human casualties. An unidentified military official told the Iraqi News Agency that the allied warplanes "bombed our civil and service installations in Mosul." [.....] PROSPECTS FOR WAR http://independent-bangladesh.com/news/jul/01/01072002ap.htm#A4 * US HAS PLAN TO KILL SADDAM, SAYS IRAQI OPPOSITION LEADER Bangladeshi Independent, 1st July DOHA, June 30: The United States has drafted a general plan to kill Iraqi President Saddam Hussein, an Iraqi opposition leader told Arab satellite news channel Al Jazeera Saturday night, reports AFP. Washington is tracking Saddam's movements through satellite data and human intelligence, with the plan to order air strikes "to try to kill him" when they are sure "they have determined with accuracy the spot where he can be found," said former Iraqi intelligence chief Wafiq Sammarai. The warplanes could take off from the southern Turkey military base of Incirlik and bases in the Gulf, by the Mediterranean or the Red Sea, said Sammarai, who defected from Iraq in 1994 and joined the London-based Iraqi National Congress opposition group. Sammarai called the plan "serious", but stressed he did "not think this operation is going to come soon. "If they fail (in killing Saddam), they could conduct raids against several targets," said Sammarai, who added he was in contact with the Kurdish opposition enclave in northern Iraq. He denied the presence of US troops in Kurdish Iraq which is protected from Saddam under a US-imposed no-fly zone. "There are not any American troops in the north of Iraq at present," Sammarai said. Sammarai also dismissed a Saturday report in the Lebanese newspaper As- Safir that said 2,000 US troops had been stationed in Jordan to oust Saddam. Jordan has already called the story false. "I can also affirm that there are no American troops in Jordan," he said. The Washington Post reported June 16 that US President George W. Bush had ordered the CIA to draft plans for toppling Saddam. http://www.iht.com/articles/63151.html * TIME TO DEPLOY A LARGE AMERICAN MILITARY FORCE by Jim Hoagland International Herald Tribune (from The Washington Post), 2nd July WASHINGTON: American strategy in the greater Middle East is at a turning point. The hesitant, at times contradictory, efforts by President George W. Bush and his aides to calm the Israeli-Palestinian conflict have produced nothing of substance. The administration must now pursue other methods of preventing the region from becoming a chaotic platform for greater global terrorism. That means more reliance on U.S. military might to support diplomacy. Events pull Bush toward a strategy of transforming the region by establishing a greatly expanded and intrusive U.S. military presence there. American forces would stay for years to help develop and shield new and democratic leaderships in Iraq and in a Palestinian state. This could become a vast and risky enterprise on the scale of American commitments to Europe during the Cold War. No president would undertake it lightly, or even voluntarily - especially not a president who came to office with few fixed ideas about foreign policy or the Middle East. The vision is not Bush's first choice. It is his last resort. But the failure of the Saudi peace plan, of Israeli military strikes and of Secretary of State Colin Powell's diplomacy to stabilize the Middle East after nearly two years of turmoil deprives Bush of options. He must now respond to their evident exhaustion with new and determined leadership. Otherwise, Bush risks letting events make strategy for him through incremental adjustments that do not add up to a coherent commitment to success. Vietnam illustrates the grave dangers of making policy by piecemeal commitments, which leave the initiative to the enemy. The United States and its NATO partners would invite that risk by an isolated deployment of Western troops as a buffer force between the Israelis and Palestinians. Hamas, Al Qaeda and Saddam Hussein would all welcome the opportunity to set up a shooting gallery with American soldiers as sitting ducks. This is no time to think small. American troops can be effective and secure on the West Bank only as part of a much larger force committed to the region on a twofold mission: to fight the sources and supporters of global terrorism, and to advance the interlocking causes of democracy in the Arab world and the survival of Israel. That is the price of admission - admittedly a steep one - for committing U.S. forces into the middle of the Arab-Israeli conflict. Conventional thinkers argue the opposite case: The Palestinian problem must be appeased and Al Qaeda totally eliminated before the United States acts to remove Iraq's weapons of mass destruction and Saddam Hussein. But the enduring Israeli-Palestinian stalemate pushes the White House toward turning such conventional wisdom on its head. The greater the polarization between Israelis and Palestinians, the more likely a U.S. invasion of Iraq becomes. Straws in the wind suggest a growing acceptance at the White House of the need for an overwhelming U.S. invasion force that will remain on the ground in Iraq for several years. The U.S. presence will serve as the linchpin for democratic transformation of a major Arab country that can be a model for the region. A new Iraq would also help provide greater energy security for Americans. The international environment has also changed significantly in recent months. The open opposition voiced in the past by Russia and France to U.S. action against Saddam Hussein has turned into a muted, conditional acquiescence to U.S. plans. Behind the scenes, Russian and French business interests have secretly opened contacts with an Iraqi opposition that they have concluded may soon come to power. The wind has shifted in the region as well. Iran welcomed Ahmed Chalabi, Saddam's most visible and dedicated opponent in exile, for political discussions in Tehran earlier this month. Turkey has privately told Washington it will support U.S. action against Baghdad. U.S. officials will soon begin discussions with Israel on the implications for the Jewish state of a U.S. campaign against Iraq. Foreign leaders have concluded that Bush means what he says about regime change in Baghdad, and are adjusting their policies. Bush's bold vision on Iraq is the right starting point for a coherent Middle East strategy. http://www.iht.com/articles/63635.html * FAILURE OF OTHER EFFORTS LED U.S. TO PLAN WAR ON SADDAM by Patrick E. Tyler International Herald Tribune (from The New York Times), 6th July The pressure on the Pentagon to produce a plan for President George W. Bush to make war on Iraq underscores the failure of either diplomacy or covert operations to dislodge Saddam Hussein or force him to open up to UN inspectors hunting for weapons of mass destruction. The emergence of a detailed concept for a military attack on Iraq also suggests that Bush's new approach to solving the conflict between Israel and the Palestinians may be part of a shift in focus toward preparations for an Iraq campaign. Bush was briefed on the state of war planning on June 19 by the top general in the American central command, Tommy Franks. Five days later, the president delivered his long-awaited Middle East policy address, calling on Palestinians to jettison their leader, Yasser Arafat, and warning that otherwise they can expect little in the way of support or assistance from the United States. That stalled the American mediation effort in the Middle East, a state of affairs reflecting the broad view of Bush's more conservative advisers, among them Vice President Dick Cheney and Defense Secretary Donald Rumsfeld, that the Israeli Palestinian conflict does not present a strategic threat to American interests in the Middle East - but that Iraq's interest in developing weapons of mass destruction does. The evidence that Saddam still possesses such weapons remains murky - particularly in the view of America's European allies, most of whom have argued against a new war on Iraq. In the United States and its principal Middle East ally, Israel, however, a number of senior officials - including Prime Minister Ariel Sharon and former Prime Minister Ehud Barak - believe that a post-Saddam Iraq could be fashioned into some form of democracy. In this view, an Iraq under new governance could become a new Western ally, helping to reduce American dependency on bases in Saudi Arabia, to secure Israel's eastern flank and act as a wedge between Iran and Syria, two of the most active sponsors of terrorism. The obstacles, risks and costs to such a strategy remain largely unaddressed by the Bush administration, and its planning for any eventual war is tightly wrapped in secrecy. Deputy Defense Secretary Paul Wolfowitz, the administration's leading advocate for the centrality of Iraq in American strategic planning in the Middle East, was host this week to Iraqi opposition leaders, according to opposition officials, and received a bleak report from them on the chaotic state of opposition forces in Iraq. Nonetheless, the Pentagon is pursuing efforts to unite the Iraqi opposition so that it might play the same kind of adjunct role of intelligence collection, target identification and combat that anti-Taliban partisans played in the Afghan campaign. According to the opposition officials, the meeting was attended by representatives from the State Department's and the CIA's task forces on Iraq, along with American military officials. Kurdish leaders in Northern Iraq are riven by internal disputes and have yet to come to any agreement with the CIA to allow American intelligence officers, special forces trainers or diplomats to set up camp there and begin preparing for a new campaign against Saddam. In April, Kurdish and other Iraqi opposition officials said that Massoud Barzani and Jalal Talabani, the principal Kurdish leaders, traveled to Frankfurt and then to a CIA training base in southern Virginia. There, the opposition officials said, their leaders were told that the United States had decided to overthrow Saddam and was seeking to send CIA teams to train Kurdish fighters in how to work with U.S. forces, much as Afghan fighters helped U.S. forces against the Taliban. A CIA spokesman declined comment. For now, Kurdish leaders appear reluctant to sign on to American war planning unless they get strong guarantees that the Bush administration plans to go all the way to Baghdad. They also want Kurdish cities protected from the kind of onslaught that Saddam unleashed during the Clinton administration's failed attempt to dislodge the Iraqi leader. The failure forced the CIA to evacuate partisans from Iraq at a cost of more than $100 million, according to administration officials. On the diplomatic front, a number of moderate Arab leaders have advised the White House in recent months that if Bush hopes to build a consensus for removing Saddam by force, the best way to achieve that goal is first to achieve an Israeli Palestinian breakthrough. Many of the moderate Arab states have expressed a willingness to assist in Saddam's removal if he does not accept the intrusive inspections. IRAQI/UN RELATIONS http://hoovnews.hoovers.com/fp.asp?layout=displaynews&doc_id=NR200207043600. 1_7ef9001ec23e9941 * UN: UNITED NATIONS COMPENSATION COMMISSION APPROVES AWARDS OF USD4.9BN FOR COMPENSATION Hoover's (Financial Times), 4th July The Governing Council of the United Nations Compensation Commission today approved awards of $4,880,400,537 for compensation to cover claims relating to the invasion of Kuwait by Iraq before concluding its forty-fourth session held in Geneva. The session was held from 18 to 20 June, as scheduled, and then was extended to continue consideration of one agenda item. Representatives of Kuwait, Iraq and Palestine addressed the 15-member Governing Council at its opening plenary meeting, presided over by Sverre Bergh Johansen of Norway. The Council also approved 10 reports and recommendations of the panels of Commissioners concerning claims from individuals in category "D", claims from corporations in category "E", and claims from governments in category "F", as follows: Part 1 of the twelfth instalment of category "D" claims (individual claims for losses over $100,000) involved 395 claims filed on behalf of individuals by 17 governments. Of these, 346 claims filed by 14 governments were recommended for compensation, with a total award value of $100,698,098.58. The thirteenth instalment of category "D" claims involved 593 claims filed on behalf of individuals by 22 governments and 3 international organizations. Of those, 523 claims filed by 22 governments and 3 international organizations were recommended for compensation, with a total award value of $147,732,224.63. Part 1 of the seventh instalment of category "E1" claims (oil sector claims) involved one claim filed on behalf of a corporation by one government. The claim was approved by the Council for compensation, with a total award value of $1,579,792,104. Part 2 of the seventh instalment of category "E1" claims involved 11 claims filed on behalf of corporations by three governments. Of these, two claims filed by two governments were approved by the Council for compensation, with a total award value of $212,387,402. The tenth instalment of category "E2" claims (non-Kuwaiti claims, excluding oil sector, construction/engineering and export guarantee and insurance claims) involved 210 claims filed on behalf of corporations by 25 governments. Of these, 71 claims filed by 17 governments were approved by the Council for compensation, with a total award value of $9,270,601. The nineteenth instalment of category "E3" claims (non-Kuwaiti construction and engineering claims) involved 19 claims filed on behalf of corporations by seven governments. Of these, 11 claims filed by seven governments were approved by the Council for compensation, with a total award value of $48,066,834. The fifteenth instalment of category "E4" claims (Kuwaiti claims, excluding oil sector claims) involved 15 claims, 14 of which were filed on behalf of corporations by the Government of Kuwait and one directly submitted claim. Of those, 14 claims were approved by the Council for compensation, with a total award value of $252,322,898. The seventeenth instalment of category "E4" claims involved 20 claims filed on behalf of corporations by the Government of Kuwait. All claims were approved by the Council for compensation, with a total award value of $154,718,071. Part 2 of the third instalment of category "F3" claims (Kuwaiti Government claims, with the exception of environmental claims) involved four claims filed on behalf of Kuwaiti ministries and other government entities by the Government of Kuwait. All claims were approved by the Council for compensation, with a total award value of $2,103,461,827. The second instalment of category "E/F" claims (claims filed on behalf of insurance companies and export credit agencies) involved 33 claims, of which 32 were filed by 14 governments and one directly submitted claim. Of these, 21 claims filed by 14 governments were approved by the Council for compensation, with a total award value of $271,950,477. During the session, the Council had discussed a progress report of the Executive Secretary on the activities of the Commission, which addressed the processing of claims and the payment of approved awards. The Council also discussed the report of the Executive Secretary on the distribution by governments of payments to successful claimants, the transparency of the distribution process, and the return of undistributed funds. The Commission has so far awarded compensation of approximately $42.6 billion, including the awards approved in the forty-fourth session; approximately $14.8 billion of the amount awarded has been made available to governments and international organizations for distribution to successful claimants in all categories of claims. Further information about the Commission, including the text of Governing Council decisions and reports and recommendations of the panels of Commissioners, can be found on the United Nations Compensation Commission Web site located at www.uncc.ch. The next session of the Council will be held from 1 to 3 October. http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c =StoryFT&cid=1025793364026&p=1012571727172 * UN DEAL LEAVES IRAQ'S KURDS AT MERCY OF BAGHDAD by Guy Dinmore in northern Iraq and Carola Hoyos, United Nations Financial Times, 6th July In theory, the Kurds of northern Iraq have never had it so good, effectively independent from Baghdad and guaranteed a substantial slice of the country's oil income under the United Nations oil-for-food programme. The reality is rather different. Zhiyan Ahmad Abdullah fights a daily battle with shortages of basic supplies as director of the main maternity hospital in Sulaimani, one of the two regional capitals controlled by rival Kurdish factions. "We have many, many problems," she says in despair, having to cope with nearly 30 deliveries a day. "Each month we get 1,000 pairs of gloves, at best 2,000. But we need 10,000, so we have to re-use them." The same shortages apply to drugs for delivery, blood-bags and blood-testing equipment. Prostaglandin, used for abortions, has never been supplied, forcing doctors to use more dangerous methods for terminating pregnancies. "Really, the WHO is to blame," says Dr Abdullah, referring to the World Health Organisation, which is responsible for delivering medical aid under the oil-for-food programme. "This programme serves the rest of Iraq more than Kurdistan. A lot of money goes to serving those who work in the UN. For example, a local UN employee earns about $600 [£390] a month. My salary is $80 and my nurses get only $10." Under Security Council resolution 986, now in its sixth year of implementation, Iraq is allowed to use earnings from sales of crude oil to buy food, medicines and fund humanitarian projects under UN monitoring. To date Iraq has earned over $54bn. >From the total oil income, the central and southern areas of Iraq under Baghdad's direct control receive 59 per cent, while the 3.5m Kurds in the north get 13 per cent. The rest is spent on compensation for Iraq's 1990 invasion of Kuwait (25 per cent) and UN costs. The Baghdad government led by President Saddam Hussein is allowed to purchase supplies and implement distribution directly, but because the Kurdish north has no international recognition it has to acquire aid through Kimadia, the official Baghdad procurement agency, and rely on the UN for distribution.This, as regional Kurdish officials argue, leaves the north at the mercy of Baghdad and what they call the inefficiency and even corruption within the dozen or so UN agencies involved in Iraq.A commonly voiced complaint is that the WHO programme is dominated by Arabs who have little sympathy for the Kurds and rely on Baghdad.One official in the Kurdish region, which effectively broke away from Baghdad in 1991 and is partly protected by a US-imposed no-fly zone, estimated that only 37 per cent of the oil income allocated for the north had been spent on humanitarian goods and services. Infrastructure projects, such as water, electricity and a $400m hospital, have been blocked by Baghdad."Baghdad vetoes many projects, and the UN does not defend us," says Sami Abdul-Rahman, deputy prime minister in the Kurdish regional government based in Arbil, calling the UN agencies "bureaucratic, biased and cumbersome".Despite the shortcomings however, Mr Abdul-Rahman agrees that the oil-for-food programme is "essentially a success", helping to provide basic rations, medical supplies and schooling.Statistics compiled by the UN show a significant decrease in malnutrition rates among children under five years, especially in the Kurdish north, bolstering UN assertions that it is more efficient in implementing programmes in the north than the Baghdad government is elsewhere.WHO blames the sanctions regime for some of the problems. "The process is known to be laborious because of the lengthy procurement procedures imposed by the sanctions regime," it says.The organisation said it had taken "remedial actions," such as an early warning system that had "improved the situation without solving the roots of the problem". It believed the new sanctions regime, agreed in May, might solve some problems by streamlining procedures for importing goods that have no possible military application. http://www.dawn.com/2002/07/06/int1.htm * IRAQ, UN FAIL TO AGREE ON ARMS INSPECTIONS Dawn (from Reuters), 6th July, 24 Rabi-us-Saani 1423 VIENNA, July 5: Iraq failed to reach an accord with the United Nations on Friday on a resumption of weapons inspections after intensive talks involving Secretary-General Kofi Annan and Iraqi Foreign Minister Naji Sabri. The impasse was bound to encourage those in the Bush administration who prefer a military solution to topple President Saddam Hussein compared to many European and Arab leaders who want to explore a diplomatic compromise. The two-day meeting was the third high-level session on the arms inspectors this year. "They didn't say yes," Annan told reporters after the Friday talks ended. "I would have preferred more," he said, adding: "I cannot force a decision." Sabri said he expected another round of talks in the coming months on the weapons inspectors, out of Iraq for more than three years, but Annan said no date had been set for the discussions, expected to be in Vienna or Geneva. The Iraqi delegation will now go back to report to their authorities, he said. "We have agreed to maintain contacts, including continuing discussions on technical matters." Sabri made clear that he wanted answers to many of the questions he submitted at the last talks in May, on issues ranging from US threats for a "regime change" in Baghdad to a timetable for the lifting of UN sanctions, imposed when Iraq invaded Kuwait in August 1990. But Annan has said repeatedly he is not in a position to answer any political questions concerning US policy or other issues that fall within the province or the 15 UN Security Council members. However, Sabri was not persuaded and accused the Security Council of violating its own resolutions. "We need assurances from the United Nations," Sabri said. "We are the victims of illegal practices forced by the United States on the Security Council. We have lost 1.67 million citizens as a result of the sanctions the Security Council imposed in clear violation of international law." [.....] _______________________________________________ Sent via the discussion list of the Campaign Against Sanctions on Iraq. 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