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News, 3-10/8/02 (5) INSIDE IRAQ * Saddam Hussein's Billions * Running dry: Sanctions hit Iraq's young the hardest * Iraq chose Saddam for good reason. The West needs a history lesson * Iraq targets 11pc annual growth over next decade * Amnesty for Iraq prisoners * Iraq issues 10,000 dinar banknote * Top officers retired on suspicion of disloyalty * Oil-for-Food Chief Worries for Iraq * Saddam Speaks to Attack Possibility * Iraqi leader tells Labour MP Galloway he hopes Britain will not join strike OIL MATTERS * OPEC To Meet In Osaka Sep 19 - Spokesman * Valero Urges US To Stop Retroactive Pricing Of Iraqi Oil * US, UK seek to suppress Iraqi oil sales: Baghdad REMNANTS OF DECENCY * Labour MP makes Iraq visit * U.S. Anti-Sanctions Activists Protest at UN Offices in Baghdad INSIDE IRAQ http://www.washingtonpost.com/ac2/wp-dyn/A38407-2002Aug2?language=printer * SADDAM HUSSEIN'S BILLIONS by Susan Blaustein Washington Post, 4th August Despite his often-rehearsed plaint that international sanctions have starved and ravaged his people, Saddam Hussein is laughing all the way to the arms bazaar. Since 1997 Iraq has brought in an average of $6 billion a year in civilian goods through the U.N. oil-for-food program, the country's only legitimate source of outside income. Under this program, Iraqi oil is exported in exchange for imports deemed by international experts to have no military utility. On top of this, Hussein and his sons and henchmen have managed to earn at least another $2 billion a year in hard currency by illegally manipulating the U.N. system and running extensive smuggling operations outside it. Ninety percent of that estimated $2 billion comes from oil smuggling. Hussein & Sons have developed many channels outside the oil-for-food program through which the regime has managed to export oil in exchange for hard currency and goods not subject to U.N. oversight. These channels involve Turkey, Jordan, Syria, Lebanon, Iran and the Gulf states, and they are widening over time. The extra cash makes it possible for Hussein to continue to purchase the loyalty and protection of his myriad security and intelligence forces; to improve his ratings in the Arab world by erecting gargantuan mosques and paying off the families of Palestinian suicide bombers; and, most dangerously, to feed his clandestine weapons procurement and development program. The international community has long been aware of Hussein's illicit revenue stream and weapons programs but has nevertheless turned a blind eye. In May the U.N. Security Council finally approved revisions in the oil-for-food program to focus it more narrowly on limiting Hussein's capacity to import weapons of mass destruction while sparing the Iraqi people as much as possible from the sanctions' effects. The revised U.N. program, which has only just begun to be implemented, will, it is hoped, expedite the influx of civilian goods to Iraq and thereby put the lie to Hussein's claim that sanctions rather than his criminal regime are to blame for Iraqis' protracted misery. But these so-called smarter sanctions cannot impede Saddam Hussein's ability to finance his procurement and development of weapons of mass destruction. The fatal flaw in the U.N. program is that it does not -- nor is it intended to -- stanch the money flow to Baghdad generated by the illicit trade that falls outside oil-for-food. In fact, Hussein's hard-currency earnings will likely increase as a result of the changes. For one thing, the revised program has actually increased the variety of goods on which Hussein can exact kickbacks from his trading partners and that he can then re-export for foreign exchange. Moreover, the revised program leaves virtually untouched Hussein's vibrant, illicit oil-for-goods barter with neighboring states -- all of which takes place under the passive watch of the international community. Reasons abound for what amounts to a universal decision to look the other way. Russia and France, two U.N. Security Council members that also happen to rank among Hussein's best business partners, have been openly threatened by Hussein with the loss of lucrative oil-for food contracts unless they continue to sing Baghdad's tune on the Security Council and press for the lifting of sanctions. Jordan has been accorded an informal dispensation to continue its extensive trade with Iraq because of its extreme dependence on the Iraqi oil supply. The United States and United Kingdom, by far the most hard-nosed about enforcing the sanctions regime, nevertheless have been sensitive to the difficulties facing their close regional ally Turkey, which claims to have suffered severe economic damage from a decade of sanctions. The United States, keenly aware that Syria's cooperation is critical to prosecuting the war on terrorism, has been reluctant to demand that President Bashar Assad make good on his 15 month-old promise to crack down on his country's illicit trade with Baghdad. Analysts believe that in exchange for an attractive discount on its Iraqi oil purchases, Syria facilitates the procurement and transport of military hardware, which is of course proscribed under oil-for-food. Now that Syria sits on the U.N. Security Council and, therefore, on the U.N. Sanctions Committee, any U.N. directive to chill this new bilateral romance is highly unlikely. Iraq has also earned more than $200 million a year from oil smuggled through Iranian coastal waters that is then either re-exported from Iran or finds its way to the United Arab Emirates and beyond. In 1991 the United Nation established a multinational interception force expressly to interdict Iraqi oil exports in the Gulf. But the largely American force is not permitted in Iranian territorial waters and thus must sit impotent as barges sloshing with Iraqi oil hug the Iranian coast. The force estimates that, largely as a result of this handicap, it interdicts only 5 percent of those barges bearing smuggled Iraqi oil. The Iranian Revolutionary Guard naval patrol has been the chief facilitator and beneficiary of this coastal traffic, which appears to benefit Iran's hard-liners. But in recent weeks the Iranian navy, which operates under the command of Tehran's moderate president, Mohammad Khatami, has begun, as it has on other occasions, to crack down on this illegal waterway traffic. This latest crackdown began at just about the time Tehran announced that it would not forcibly oppose a U.S. military strike on Iraq. More hard currency is obtained by Hussein's Mukhabarat, one of the dreaded intelligence services run by Hussein's son Qusai, which has reportedly set up front companies that re export oil-for-food goods, such as medicines, baby food, vehicles, spare parts and electronics, in exchange for as much as $20 million a year, with which it is believed to buy weapons. A bevy of international trade fairs has served to enhance Baghdad's respectability and bring in up to $30 million annually in rents and fees; and each year religious pilgrims visiting Iraq's holy sites are being fleeced for as much as $40 million. Iraq has recently begun taking in an unknown amount in overflight and landing fees now that -- in a brazen multilateral demonstration of the sanctions' effective impotence -- Jordan, Syria, Russia and France have all resumed flying into Hussein International Airport. Although the United States has long been the most adamant Security Council member about prohibiting the flow to Iraq of imports that might be used in weapons production, and although President Bush singled out Hussein as a major target in the war against terrorism and the states that sponsor it, U.S. imports of Iraqi oil have, since Sept. 11, increased significantly, even dramatically at times. In January, when Bush designated Iraq a constituent member of his axis of evil, the United States consumed 75 percent of all Iraqi oil exported under oil-for-food, according to U.S. government figures. No U.S.-based oil firms are currently direct purchasers of Iraqi oil, but the illegal 20-cent to 70-cent-per-barrel surcharges that Hussein has managed to embed in the pricing system worked out with the U.N. Sanctions Committee are passed up the line -- from the buyers who must actually agree to the kickbacks (mostly Russian, Chinese, Thai, Indian and Vietnamese firms and small shell companies registered in Western countries that tolerate money-laundering) to the major traders to the American refineries and, presumably, to the ordinary motorist. This suggests that American companies and consumers are the last links in a chain of enablers who have helped to underwrite Hussein's end run around the U.N. system. Before Sept. 11, four free trade agreements with Iraq had been signed, by Egypt, Syria, Tunisia and Yemen. Since then another eight have been signed -- by Algeria, the United Arab Emirates, Sudan, Bahrain, Oman, Lebanon, Qatar and Jordan. Two more are under discussion, one with Bahrain and one with Saudi Arabia, which recently reopened a border post closed since the Gulf War to facilitate direct trade and which has scheduled a big trade fair in Baghdad for the fall. In announcing each new bilateral agreement, trade officials have heralded vastly expanded trade relations between the two countries involved. Hussein's co-signatories are well aware that each agreement affords him both the immediate political benefit of hammering yet another nail in the coffin of sanctions and the long-term economic benefit of preferential trade access once they are lifted. A clearer picture of Hussein's funding mechanisms unravels a number of apparent contradictions that have long puzzled many observers. First, there remain shortages of basic medicines and foodstuffs in Iraq, despite its being the beneficiary of the world's largest humanitarian program ever. That is because Hussein controls the distribution of goods. Second, as long as Security Council members have vested business interests in Iraq, they will not make any serious effort to see that their own sanctions are enforced. Third, although Iraq's neighbors -- and Iraq's own beleaguered Kurdish population -- certainly hold no brief for Saddam Hussein, they continue to resist the Bush administration's call for "regime change" in Baghdad at least in part because they are benefiting from the status quo. Finally, the obvious: The Iraqi government has continually drawn out and obstructed talks with the United Nations regarding the resumption of weapons inspections because it probably does, in fact, have a great deal to hide. The U.N. oil-for-food program costs $6 billion a year. That's six times the size of the international community's other major humanitarian operations, such as in Bosnia, Rwanda and post-conflict Afghanistan. But the Iraq program is not effective. Nor can it ever be, given its structure, the deference that the U.N. accords Hussein, the makeup of the Security Council and the lack of political will to make it work. Barring robust enforcement, the program is simply a charade and should be scrapped. Doing so would surely rob Hussein of his triumph to date in the realm of public diplomacy. But it would also force the international community to face up to the fact that the U.N. program it devised has failed to stop Hussein from getting most of what he needs to remain a grave regional and worldwide threat. ... The writer is senior consultant to the Coalition for International Justice and co-author, with John Fawcett, of a forthcoming study of Saddam Hussein's sources of revenue. http://seattletimes.nwsource.com/html/nationworld/134506556_sanctions04.html * RUNNING DRY: SANCTIONS HIT IRAQ'S YOUNG THE HARDEST by Greg Barrett Seattle Times (from Gannett News Service), 4th August WASHINGTON ‹ Massive new irrigation systems stretching across the breadbasket regions of rural Iraq would normally be cause for celebration. In a nation where nearly a quarter of the children suffer chronic malnutrition, abundant crops of wheat and barley would signify hope and progress. But when Hans von Sponeck, former assistant secretary general of the United Nations, visited Iraq last month he found neither: The spigots were turned off. Although the sophisticated sprinkler systems had survived the exhaustive screening of U.N. trade sanctions, the water pumps had not. "The danger is these pumps could be used by the (Iraqi) military for other purposes," said von Sponeck, a 32-year veteran of the United Nations who resigned two years ago to protest the sanctions. "Anything that has a sophisticated pumping mechanism can be used for propelling weapons of mass destruction, I guess." Such is life in Iraq a dozen years after the international trade sanctions of Aug. 6, 1990, attempted to peacefully push Iraqi President Saddam Hussein back from Kuwait, and 11 years after the allied forces of the Persian Gulf War rained bombs on Baghdad. The ongoing collateral damage of the war and sanctions on Iraqi civilians has totaled more than 1 million deaths, half of which are children younger than 5, according to UNICEF and World Health Organization reports. As U.S. lawmakers this summer debate whether the military should again strike at Saddam's regime or simply tighten the trade embargo, Iraqi civilians live in dread of the inevitable crossfire. More than 700 targets were bombed in 1991 to cripple Saddam ‹ bridges, roads and electrical grids that powered 1,410 water-treatment plants for Iraq's 22 million people. Coupled with the U.N. sanctions that blocked or rationed dual-use imports such as the water pumps, electric generators and chlorine ‹ that also can be used in the making of mustard gas ‹ epidemics ensued. Iraqi children died from dehydration and waterborne illnesses such as cholera, diarrhea and other intestinal diseases. At his confirmation hearing last year, Secretary of State Colin Powell laid the blame at Saddam's feet. "No one cares for children more than I do," Powell said. "And I understand that a nuclear, biological or chemical weapon of a Saddam Hussein threatens not only the children of Iraq but the entire region far more than tightened sanctions." At the freshly painted Al-Mansour Children's Hospital in Baghdad, pediatrician Qusay Al Rahim said the nation that once was among the most industrialized in the Middle East has made some progress in the past decade. Electricity is again reliable. More than half the pharmaceutical drugs his patients need are available. Hospital elevators work and colostomy bags no longer have to be washed and reused. The sanctions ‹ which have been maintained because Saddam refuses to comply with U.N. resolutions for arms inspections ‹ do not prevent the import of food and most medicines. But, Al-Rahim said, infants and children still die from a lack of common equipment and supplies that were readily available before Saddam's stubborn stand against the West. "For example, we have a shortage of Vitamin K," he said of the coagulant used to prevent hemorrhaging in newborns. In an independent study published 19 months after the six-week Gulf War, The New England Journal of Medicine reported a trend that foretold Iraq's future. During the first eight months of 1991, nearly 47,000 more children than normal died in Iraq, and the country's infant- and child-mortality rates more than doubled, to 92.7 and 128.5 per 1,000 live births respectively. A 1999 UNICEF study showed a continuing trend: In 1998, the infant- and child-mortality rates were 103 and 125 per 1,000, respectively. The U.N. oil-for-food program was created five years ago to generate some sense of normalcy for Iraqis. Yet as of Tuesday, it was still withholding more than 1,450 import contracts worth $4.6 billion in humanitarian supplies for Iraq. A U.N. pledge in May to regenerate and expedite the contracts, so far, has produced only a trickle of change ‹ 14 humanitarian supply contracts worth $7.6 million. The United States, concerned with Saddam's potential for developing weapons of mass destruction, initiated roughly 90 percent of the blocks on humanitarian supplies by the U.N. Security Council. In Amman, Jordan, this summer, Jordanian Minister of Water Munther Haddadin addressed the plight of Iraqi children, who, for example, suffered almost a fourfold increase in low birth weights (4.5 percent to 21.1 percent) between 1990 and 1994. The rate remains steady today at 25 percent. "You wonder why there are terrorists?" Haddadin asked, according to writer Jane McBee, who toured the Middle East with members of the Physicians for Social Responsibility. "What do you think these children will be in 10 years? Do you think they'll join the Peace Corps?" Less than a month after the Gulf War, U.N. Secretary General Javier Perez de Cuellar told the U.N. Security Council the conflict had "wrought near-apocalyptic results upon the economic infrastructure of what had been, until January 1991, a rather highly urbanized and mechanized society." In a letter to the council dated March 20, 1991, de Cuellar wrote: "Iraq has, for some time to come, been relegated to a pre-industrial age, but with all the disabilities of post-industrial dependency on an intensive use of energy and technology." It was a result the United States predicted even as allied forces bombed Iraq's civilian infrastructure. In a January 1991 document titled "Iraq Water Treatment Vulnerabilities," the U.S. Defense Intelligence Agency said the bombing of Iraq coupled with an embargo of chemicals and supplies could fully degrade Iraq's civilian water supply. "Unless the water is purified with chlorine, epidemics of such diseases as cholera, hepatitis, and typhoid could occur," read declassified portions of the report. George Washington University professor Thomas Nagy stumbled across the document in 1998 during online research about depleted uranium. The subject line of the Pentagon paper read: "Effects of Bombing on Disease Occurrence in Baghdad." Its analysis, as Nagy said, was blunt: "Increased incidence of diseases will be attributable to degradation of normal preventive medicine, waste disposal, water purification-distribution, electricity and decreased ability to control disease outbreaks." "Imagine if the document had read, 'U.S. Water Treatment Vulnerabilities,' " and it described in detail how to spread epidemic to the U.S. civilian population. "It would be called terrorism," Nagy said. "Or worse. Genocide." The Pentagon, meanwhile, dismissed the document. Defense Intelligence Agency spokesman Lt. Cmdr. Jim Brooks called it an assessment written for U.S. policy-makers but said he didn't know who had requested it or for what purpose. "If you have this report, the best thing to do is to then look at what policies went into place. ... There are no sanctions that prevent (Saddam) from sustaining the water-treatment program" and caring for his people, Brooks said. But Saddam has delivered on his part of the U.N. oil-for-food program, according to the United Nations, which has 158 observers in Iraq monitoring the movement of supplies. Since the relief effort began in 1997, he has never been cited for diverting or hoarding supplies, said program spokeswoman Hasmik Egian. Meanwhile, Rep. Tony Hall, D-Ohio, complained in the spring of 2000 about U.S. efforts to block crucial water and sanitation supplies. Following a five-day tour of hospitals, schools, clinics and water-treatment plants from Baghdad to Babylon, Hall wrote to then-Secretary of State Madeleine Albright: "Holds on contracts for the water and sanitation sector are a prime reason for the increases in sickness and death." Hall cited 19 supply contracts for dual-use items such as water-purification chemicals, chlorinators, chemical dosing pumps and water tankers, and said the United States was responsible for blocking 18 of them. When Albright was U.S. ambassador to the United Nations in 1996, Lesley Stahl of CBS' news program "60 Minutes" asked her about the sanctions and the deaths of Iraqi children. Albright said it was America's responsibility to make sure the Gulf War did not have to be fought again. "I think it is a very hard choice," she told Stahl. "But the price, we think the price is worth it." U.S. Air Force Col. John Warden, who devised the Desert Storm Air Campaign's pinpoint strategy in 1991, said he had never heard of the Defense Intelligence Agency document outlining Iraq's water-treatment vulnerabilities. He regrets the death of children, he said, but the United States is not to blame: "It bothers me from the standpoint that here is an evil guy ... who was willing to stand around and see that kind of thing happen. If you put someone in a hopeless position and keep grinding your heel into them, that is one thing. But we did not do that. The blame 100 percent goes to a guy named Saddam Hussein." Warden, now retired and living in Georgia, believes another strike at Iraq would ‹ or should ‹ follow his Gulf War blueprint. "When we went to war, our objective was to reduce Iraq's capability to be strategic," he said. "In order to make that happen, the last thing you want to do is focus your efforts solely on the military ‹ that is where you get your least results. ... We shut down the electrical system within the first hours of war. ... We shut down the internal flow of oil by knocking out the refineries. We also knocked out the communications. "In my view, it was extraordinarily successful. ... Wars are devastating on civilians. Always have been." http://argument.independent.co.uk/commentators/story.jsp?story=321252 * IRAQ CHOSE SADDAM FOR GOOD REASON. THE WEST NEEDS A HISTORY LESSON by Phillip Knightley Independent, 4th August Before Tony Blair joins the new crusaders trying to impose a "regime change", a Western "settlement" on Iraq, he should at least look at the historical facts that explain the rise of nationalist leaders such as Saddam Hussein. And while he is at it, since he is good at empathy, he might try looking at Britain through Iraqi eyes. Seen from Baghdad, the British have bombed and invaded their country, lied to them, manipulated their borders, imposed on them leaders they did not want, kidnapped ones they did, fixed their elections, used collective terror tactics on their civilians, promised them freedom and then planned to turn their country into a province of India populated by immigrant Punjabi farmers. Small wonder that the author Said Aburish said to me recently: "If you think Saddam Hussein is a hard man to deal with, just wait for the next generation of Iraqi leaders." In view of Saddam's ruthlessness in dealing with the Kurds in Iraq, his war with Iran and his invasion of Kuwait, it is hard to conceive that there are younger Iraqi leaders who believe Saddam has not been tough enough, and that, although the United States has the most powerful armed forces in the world, Americans do not have the stomach for the sacrifices an all-out war in the Middle East would entail. These young Iraqis take the Islamic long view of history, which suggests that the Middle East never favours the foreigner and always takes its revenge on those who, like the British and Americans, insist on seeing the region through their own eyes. We need to go back to the First World War, when Lawrence of Arabia and Winston Churchill were imposing the first regime changes on the Middle East, to see how we have reached the situation we face today. In 1919, the recently concluded war had made everyone realise the strategic importance of oil, and in any future major skirmish a secure supply of oil would be an essential weapon. Britain already had one source: British Petroleum, owned in part by the British government, had been pumping oil at Masjid-i-Salamn, in Iran's Zagros Mountains, since 1908. But it was not enough. So even before the peace conference began in Paris in 1919 some underhand oil trading took place. France, for example, gave Britain the oil-rich area around Mosul in Iraq, in exchange for a share of the oil and "a free hand" in Syria. Unfortunately, Britain had already promised Syria to the Syrians. It was obvious to the smarter Arab leaders that guarantees of freedom and independence made during the war by Britain and France in return for their support against Germany's ally, Turkey, would now mean nothing. This was confirmed at the peace conference when the oil companies pressed their governments to renounce all wartime promises to the Arabs. The oil companies saw only too well that oil concessions and royalties would be easier to negotiate with a series of rival Arab states, lacking any sense of unity, than with a powerful independent Arab state in the Middle East. Ironically in that President George W Bush now leads the new crusaders the only country to protest at the betrayal of the Arabs was the United States. A commission set up by President Wilson warned that independence for states such as Palestine, Syria and Iraq, should be granted as soon as possible. And the idea of making Palestine into a Jewish commonwealth should be dropped. The report was ignored, even in Washington, and it took a further two years for the Allies to finalise their carve-up of the Middle East. The Arabs were stunned to learn that the whole Arab rectangle lying between the Mediterranean and the Persian frontier, including Palestine, was to be placed under mandates to suit the foreign policies of Britain and France. The Arabs had simply exchanged one imperial ruler, Turkey, for another, the West. Revolution began almost immediately. The Iraqis tried to kick us out by raiding British establishments and killing British troops. The British army retaliated with collective punishment, burning to the ground every village from which any such attack was mounted. Lawrence of Arabia wrote to The Times suggesting, with heavy irony, that burning villages was not very efficient. "By gas attacks, the whole population of offending districts could be wiped out neatly, and as a method of government, it would be no more immoral than the present system." The grim truth was that something along these lines was being considered. Churchill, then Secretary of State for Air and War, suggested that the RAF should take on the job of subduing Iraq: "It would ... entail the provision of some kind of asphyxiating bombs calculated to cause disablement of some kind but not death ... for use in preliminary operations against turbulent tribes." In the end the RAF stuck to conventional high-explosive bombs, a method we are still using today. When Churchill appointed Lawrence to clear up the mess the Middle East had become, Lawrence began by offering to make Feisal, the man he had chosen as military leader of the Arab revolt, King of Iraq. The problem was that there were several other candidates. The most popular was an early version of Saddam Hussein, the nationalist leader Sayid Taleb, who had gained popular support by threatening a nationwide revolt if the Iraqis were not allowed to choose their own leader. Our solution was simple. We kidnapped him, and dispatched him to Ceylon. By the time Taleb was allowed to return, Feisal had been elected king by one of those suspiciously high majorities 96.8 per cent. The regime changes continued. In Jordan, we made Feisal's brother Abdullah king, and provided him with money and troops in return for his promise to suppress anti-Zionist activity. Their father, Hussein, the Sharif of Mecca, the man who had started the Arab revolt against Turkey, was offered £100,000 a year not to make a nuisance of himself. And that was that. Britain regarded this as redemption in full of her promises to the Arabs. The Arabs, particularly the Iraqis, did not see it that way. They have been in revolt ever since. Saddam Hussein came to power in 1979 on a platform of Arab unity and resistance to Western influence in the Middle East. He continues to have a following in the Arab world because he is seen as one of the few Arab leaders prepared to stand up to the West, particularly the United States, whose interest in the area is comparatively recent. (The British Arabist, St John Philby, father of the notorious KGB spy Kim Philby, negotiated a deal between the Standard Oil Company of California and the Saudis, and commercial production began in March 1938.) Whether we accept that Saddam Hussein poses a threat or not, and whether this threat is so great that we can justify attacking Iraq again, we should first ask the crunch question: if the new crusaders defeat and occupy Iraq, what then? A United Nations mandate, something like that imposed on the country after the First World War, allowing the victorious army to remain in control of the conquered land? Or perhaps a new "Feisal" inserted as a token ruler of a reluctant population? Either course spells disaster. The cynical disposition of other people's countries and their leaders no matter how frightful they may appear to us will surely bring a bloody reckoning. That great Arabist Gertrude Bell once warned that the catchwords of revolution equality and fraternity would always have great appeal in the Middle East because they challenged a world order in which Europeans were supreme, or in which those Europeans and their client Arab leaders treated ordinary Arabs as inferior beings. And so a new cycle of anger, frustration and bloodshed will begin because 800 years after the crusades there will still be foreigners occupying Arab lands. Phillip Knightley is the author of 'The Secret Lives of Lawrence of Arabia' http://www.dailystarnews.com/200208/06/n2080605.htm#BODY2 * IRAQ TARGETS 11PC ANNUAL GROWTH OVER NEXT DECADE Daily Star, Bangladesh (from AFP), 6th August Iraq's cabinet set an ambitious goal of 11 per cent annual economic growth for the next decade at a meeting chaired by President Saddam Hussein on Sunday, despite the tough sanctions on the country and amid increasing US threats to topple the regime. "The Iraqi president examined the main lines of an economic development plan for the coming 10 years, proposed by the ministerial committee and led by Deputy Prime Minister and Finance Minister Hekmat al-Azzawi," the state INA news agency reported. The economic development plan sets for a "minimum annual economic growth of 11 per cent," it said. Saddam asked his ministers in late May to elaborate a 10-year economic development plan and said the following month he wanted to see his country double its non-oil income over this period. The Iraqi economy has been seriously undermined by UN sanctions imposed on the country following its August 1990 invasion of Kuwait. The sanctions have also made it difficult to obtain definitive figures on the country's current economic growth. Prior to the sanctions, Iraq exported up to 3.14 million barrels of oil per day, and oil exports are still the main source of income, even though they are now monitored by the six-year-old UN administered oil-for-food-program which allows it to obtain basic medical and food supplies. With oil reserves estimated at 115 billion barrels, Iraq ranks second in the world behind Saudi Arabia, which has reserves of 261 billion barrels. [.....] http://www.cnn.com/2002/WORLD/meast/08/06/iraq.prisoners/index.html * AMNESTY FOR IRAQ PRISONERS by Rym Brahimi CNN, 6th August BAGHDAD, Iraq: Iraq's Revolutionary Command Council, chaired by Iraqi President Saddam Hussein, issued a series of sweeping pardons for inmates of Iraqi prisons. The move was announced two days before the celebration marking the end of the Iran-Iraq War in 1988. Among those having their sentences wiped away are people who have served two years in prison, providing they were not sentenced originally to more than 10 years. Even some prisoners given the death sentence will be freed. Others, whose crimes involved drugs, espionage, and vengeance killings, will remain behind bars. It is not known how many prisoners there are in Iraqi prisons nor how many the pardons will ultimately affect. The order makes no direct reference to political prisoners. The decision, signed by Hussein, was put into effect immediately, the announcement said. http://news.bbc.co.uk/2/hi/business/2176362.stm * IRAQ ISSUES 10,000 DINAR BANKNOTE BBC, 6th August Iraq's central bank plans to issue a 10,000 dinar banknote for commercial transactions. "This note will be used in relatively large commercial deals, notably for real estate and costly machinery," Iraqi Central Bank (ICB) governor Isam Rashid Huwaysh was quoted as saying by local newspapers. One US dollar buys about 1,900 dinars, but the highest denomination currently used is the 250 dinar. Bills in shops, restaurants and hotels can reach hundreds of thousands of dinars and many are equipped with cash-counting machines. But Dr Huwaysh said the new banknote will not be used for everyday transactions. Credit cards and cheques are no longer accepted in Iraq. The new banknote will reportedly be the same size as the 250 dinar and include a visible security thread inscribed with the words Iraqi Republic, phosphorescent filaments and a watermark Dr Huwaysh said that the ICB is also replacing worn out currency and has issued new 25, 100 and 250 dinar banknotes. The US dollar peaked at 3,000 dinars in 1996, but the dinar climbed to 450 a dollar by 1997 after the introduction of the United Nations "oil-for-food" programme. Before the UN embargo, imposed after Iraq invaded Kuwait in 1990, the dinar was worth $3.20. The "oil-for-food" programme allows Baghdad to export crude oil in exchange for basic foods, some medicines and pays for UN operations. http://www.iraqpress.org/english.asp?fname=ipenglish\8894.htm * TOP OFFICERS RETIRED ON SUSPICION OF DISLOYALTY Damascus, Iraq Press, Aug. 7, 2002 President Saddam Hussein has pensioned off more than 150 army officers on suspicions of disloyalty, an informed Iraqi source said. Speaking on condition of anonymity, the source said "combat fatigue and indolence" were among the reasons cited in their letters of early retirement. But the officers, whose ranks range from Lt. Colonel to Major-General, were retired because the "Iraqi strongman thought they could easily turn into tools against his rule once the much expected U.S. military attack to topple his regime takes place," the source said. [.....] The retired officers, the Iraqi source said, will most probably be given new posts to train and command irregular military units such the so-called al-Qudus or Jerusalem corps. http://cgi.wn.com/?action=display&article=15030095&template=baghdad/indexsea rch.txt&index=recent * OIL-FOR-FOOD CHIEF WORRIES FOR IRAQ The Associated Press, 7th August UNITED NATIONS (AP) ‹ The head of the U.N. humanitarian program for Iraq warned Tuesday that a drop in Iraqi oil exports that fund the program could have serious consequences for the delivery of food, medicine and other aid. Benon Sevan, head of the oil-for-food program, urged the Security Council committee monitoring sanctions against Iraq to resolve a dispute over the pricing of Iraqi oil, which he blamed for the drop in exports. In a letter to the committee, Sevan noted that in the last two months Iraq exported only 63.2 million barrels of oil. Normally, Iraq exports at least 2 million barrels a day. ``Even by the most conservative estimates, some $1.5 billion in revenue has been lost, owing to a reduction in the level of Iraqi exports,'' he said. Proceeds from Iraqi oil sales are the main source of revenue for the 5-year-old oil-for-food program, which was started to alleviate the suffering of Iraqi civilians living under sanctions imposed on Iraq after its 1990 invasion of Kuwait. It allows Iraq to sell unlimited quantities of crude oil to purchase food, medicine and other humanitarian goods. ``The increasing shortfall in funds will have very serious consequences on the humanitarian situation in Iraq,'' Sevan warned. [.....] http://www.lasvegassun.com/sunbin/stories/w-me/2002/aug/08/080809228.html * SADDAM SPEAKS TO ATTACK POSSIBILITY Las Vegas Sun, 8th August BAGHDAD, Iraq- Anyone who attacks Iraq will die in "disgraceful failure," Iraqi President Saddam Hussein said in a speech to the nation Thursday. Speaking on the anniversary of the end of the Iraq-Iran war of 1980-88, Saddam made no direct mention of the U.S.-British demand for the return of U.N. arms inspectors to Iraq, which has sparked talk in Washington of a military strike against the country. In his speech, Saddam did not mention America and Britain by name, but referred to them as the "forces of evil" - a phrase the Baghdad government frequently uses after U.S. and British airstrikes in the no-fly zones over northern and southern Iraq. "The forces of evil will carry their coffins on their backs to die in disgraceful failure," he said in the televised speech. The United States has warned Iraq of unspecified consequences if it does not allow U.N. inspections to resume, and Iraqi diplomats have held three meetings with U.N. Secretary General Kofi Annan this year to discuss the issue and related topics. Saddam said the Security Council "should reply to the questions raised by Iraq and should honor its obligations under its own resolutions." He was referring to 19 questions given to Annan at a meeting in March, and to the council resolutions which say that U.N. sanctions on Iraq can be lifted once it has eliminated its weapons of mass destruction and fulfilled other requirements. Iraq has long said it has fulfilled these conditions and that the sanctions imposed since its 1990 invasion of Kuwait should be lifted. Annan circulated the 19 questions, which deal with various Iraqi complaints, to the Security Council members, who have not replied. Saddam spoke dressed in a dark gray suit in front of a white curtain and with a spread of white lilies on his desk. Recent reports from Washington say the U.S. government is gearing for an attack on Iraq to topple Saddam. U.S. officials have not ruled out such a strike, but insist no decision has yet been made. NO URL (sent to list) * IRAQI LEADER TELLS LABOUR MP GALLOWAY HE HOPES BRITAIN WILL NOT JOIN STRIKE Source: Iraqi Satellite Channel, Baghdad, in Arabic 1220 gmt 8 Aug 02 Iraq Sanctions Monitor Newsletter #489 (see www.mariamappeal.com) Mujahid leader President Saddam Husayn, may God watch over him, has received George Galloway, British MP for the Labour Party. During the meeting, Mr Galloway reviewed with the president the activities he, along with several British political and trade unionist figures are performing, as well as their calls for non-participation by Britain in the aggression against Iraq the US administration of evil is threatening to launch. These moves, Galloway added, are meant to safeguard good ties between Britain and Iraq and also between Britain and the Arab nation. They are also designed to safeguard peace in the Middle East. Mr Galloway affirmed that a solution to the Iraqi issue must be pursued through peaceful and diplomatic means. He also commended Iraqi overtures, including the letter the foreign minister addressed to the UN Secretary-General [Kofi Annan] in which he proposed the holding of a technical dialogue with the chairman and members of Unmovic [United Nations Monitoring, Verification and Inspection Committee] and the letter the National Assembly speaker sent to the US Senate president and the speaker of the US House of Representatives, in which he invited them to visit Iraq, along with experts from various specialities, to obtain a first-hand knowledge about the US administration's claims and unfounded reports regarding weapons of mass destruction. The leader president, may God protect him, commended the good efforts being made by Mr Galloway and hoped that Britain would not participate in the anti-Iraq aggression and would shun the foolish US policy. The meeting was attended by Deputy Prime Minister Tariq Aziz and Foreign Minister Naji Sabri Ahmad. OIL MATTERS http://biz.yahoo.com/djus/020805/200208050532000195_1.html * OPEC TO MEET IN OSAKA SEP 19 - SPOKESMAN Yahoo.com, 5th August LONDON -(Dow Jones)- The Organization of Petroleum Exporting Countries will hold its next meeting Sept. 19 in Osaka, to coincide with the International Energy Forum set for Sept. 21-23, an OPEC spokesman said Monday. "It's official from our side," he said. "I know the Japanese government is saying yes, they have accepted the request from OPEC, so it's basically a done deal for us now." Japan is hosting the biennial energy forum, which brings together representatives from producer and consumer nations to discuss common energy issues. OPEC as an organization and individual OPEC members except for Iraq are invited to attend the forum. Iraq wasn't invited because it didn't attend the last energy forum in Riyadh in 2000, said Seiji Takagi, an official in Japan's Ministry of Economy, Trade and Industry. "We invited members who had been invited to the Riyadh meeting," Takagi said. "We have to limit the invited countries to some extent." However, political concerns may have also played a part in Japan's decision to exclude Iraq from the forum, sources said. A Gulf OPEC delegate said U.S. Energy Secretaryis expected to attend the forum in Osaka. " Japan is a close ally to the U.S ., and with the situation now with Iraq being one of the axis of evil, politically it's very difficult for the Japanese to officially invite the Iraqis to come," said the delegate. "The Americans would never forgive the Japanese for doing it." An industry source close to Baghdad said Iraq belongs at events such as the energy forum. "You appreciate the fact that an international energy forum without Iraq...there's something missing," the source said. OPEC was originally scheduled to meet Sept. 18 at its headquarters in Vienna. Iraqi officials didn't object to shifting the OPEC meeting to Osaka, the OPEC spokesman said. http://biz.yahoo.com/djus/020809/200208091259000479_1.html * VALERO URGES US TO STOP RETROACTIVE PRICING OF IRAQI OIL by Masood Farivar Yahoo.com, 9th August NEW YORK -(Dow Jones)- Valero Energy Corp (NYSE:VLO - News). (VLO) on Friday called on the U.S. government to stop its policy of retroactively pricing Iraq's U.N. monitored oil exports, saying the method has led to a sharp drop in Iraqi crude oil available to U.S. refiners and could hurt U.S. consumers. In a letter to U.S. Energy (NasdaqNM:USEG - News) Secretary Spencer Abraham, Valero Chairman and Chief Executive Bill Greehey said the retroactive pricing policy makes Iraqi crude oil uncompetitive with other sour crudes sold in the U.S. and called for a return to proactive pricing of Iraqi oil. "I urge you to call the United Nations' pricing of Iraqi crude oil into question and encourage the U.N. to adopt a forward-looking pricing plan that doesn't disadvantage the domestic refinery and, ultimately, the American consumer, " Greehey wrote in the letter. At issue is a controversial method of pricing Iraqi oil exports through the U.N. oil-for-food program, a policy pushed by the U.S. and U.K. since last autumn. Under the policy, Iraq's proposed oil prices are set retroactively each month after the oil has been delivered rather than before. The U.S. and U.K. contend the method is designed to prevent Iraq from imposing an illegal surcharge on its oil customers. But lifters of Iraqi oil say that the policy has created uncertainty about Iraqi oil prices and in some cases has led traders to stop buying Iraqi oil altogether. As a result, Iraqi oil exports have dropped to just above an average of 1 million barrels a day in recent weeks, compared with a more typical rate of 2 million barrels a day. Most of Iraqi oil exports through the oil-for-food program is shipped to the U.S., where U.S. refiners such as Valero buy it from foreign middle operatives. Greehey said that Valero and other refiners have met regularly with U.N. officials and urged the U.N. Iraq Sanctions Committee to "adopt a commercially viable pricing mechanism based on a proactive, forward-looking basis." "Virtually all global crude transactions are done in this manner and it should be easy to implement when you consider the few number of cargoes leaving Iraq, " Greehey said. http://www.dailystarnews.com/200208/10/n2081005.htm * US, UK SEEK TO SUPPRESS IRAQI OIL SALES: BAGHDAD Daily Star, Bangladesh, 10th August Reuters, London: The United States and Britain are deliberately trying to choke off Iraqi oil sales under the UN oil-for-food deal by overpricing the crude, a senior Iraqi oil official said Thursday. The official said the two countries are pushing United Nations oil overseers who set monthly prices for Iraqi crude to inflate levels and drive away business -- especially in the United States, Baghdad's single biggest customer. "The motive is very clear, " the official said. "The United States and Britain are pressuring the oil overseers to set high prices so our customers have a very difficult time lifting." Iraqi oil sales to the United States have plunged to 300, 000 barrels per day (bpd) from 800, 000 bpd last year -- a decline traders link in part to uncompetitive prices set by the UN. Levels are set to shrivel further as Iraq and its customers say prices set for US-bound shipments in July have pegged the crude far above current market value. The UN, led by London and Washington, routinely delays approval for Iraqi oil prices until after barrels load in a bid to ensure levels are not set below market value -- a tactic designed to thwart Baghdad's illicit surcharge on oil sales. Iraq slapped an illegal 25-30 cent fee on its oil sales in November 2000 in a bid to divert funds from UN supervision and recently cut its request to 10 cents in a bid to boost exports. Iraq and its customers have long complained the UN policy, so-called retroactive pricing, has created price uncertainty for lifters and shrunk exports. State marketer SOMO now has taken the unprecedented step of writing two official letters of complaint to the world body on behalf of its lifters. "We have done what we could to be fair to our customers, " the Iraqi official said. "Based on our own assessments, the July prices are over the market." Baghdad's original prices for July crude shipments to the United States were rejected by the UN and then revised higher by 15-35 cents. Iraq says it "had no choice but to submit such prices, which were suggested by the (UN) oil overseers after long discussions, " according to a letter SOMO chief Ali Hassan sent to the Iraqi sanctions committee which controls Iraq's oil revenues. But Iraq's price complaints are likely to fall on deaf ears. "There is nothing to suggest we are going to review the US prices for July, " a UN diplomat told Reuters. REMNANTS OF DECENCY http://news.bbc.co.uk/1/hi/scotland/2170317.stm * LABOUR MP MAKES IRAQ VISIT BBC, 4th August A Labour MP has warned against military action in Iraq as he arrived in the country to show his solidarity with the Iraqi people. George Galloway said he would be meeting various Iraqi leaders and members of the public during his trip. The MP for Glasgow Kelvin is angry at the latest pronouncements from the United States over the need for a change of leadership in Iraq. President George Bush is committed to the removal of Saddam Hussein as president, despite the Iraqi leader's offer to discuss the return of United Nations weapons inspectors. Mr Galloway told BBC Radio Scotland that he was in Iraq with a number of people from European and Arab countries. "We are determined that we are going to do everything we can to stop this rush over the cliff," he told BBC Radio Scotland. He said most of those accompanying him in Iraq thought that their countries would prefer it if the issue could be resolved diplomatically with the return of the inspectors. He warned against "being plunged into a war with incalculable consequences for Iraq, for the invaders and for the whole region, which will be destabilised in the extreme". Mr Galloway has also accused UK Prime Minister Tony Blair of not being honest with the British public over his intentions towards Iraq. The media had been briefed on one line while Mr Blair was making different remarks to King Abdullah of Jordan, Mr Galloway claimed. "He has told the King of Jordan that he has very serious reservations about this attack on Iraq. "He has told the British press that there is almost certainly going to be one and that we will be part of it. "But he has not told the British Parliament, and therefore the British public, anything at all." However, Downing Street stressed that no decision had been taken regarding Iraq. [.....] http://www.tehrantimes.com/Description.asp?Da=8/7/02&Cat=2&Num=15 * U.S. ANTI-SANCTIONS ACTIVISTS PROTEST AT UN OFFICES IN BAGHDAD Tehran Times, 7th August BAGHDAD: Six U.S. activists staged a one-day hunger strike outside the UN offices in Baghdad on Tuesday to protest the crippling sanctions imposed on Iraq exactly 12 years ago. The four men and two women from the U.S.-based group "Voices in the Wilderness" arrived in Iraq on July 30 and have been living in a small tent opposite the UN headquarters in Baghdad. They were protesting "a policy of sanctions spearheaded by the United States and ramped through the United Nations that has been spectacularly unsuccessful," said activist Ramzi Kysia. "The war on terrorism cannot be fought by being terrorists ourselves. Thousands of Americans were killed on September 11. that was an atrocity. "Hundreds of thousands of innocent people have been killed in Iraq by the United States and the United Nations over the last 12 years, and that is also an atrocity," Kysia said. He said U.S. President George W. Bush was "pushing the entire world into war. Bush has said he will use all tools at his disposal to topple the regime of Saddam Hussein, whom Washington accuses of developing weapons of mass destruction. On August 6, 1990, four days after Iraq's lightning invasion of Kuwait, the UN Security Council imposed the toughest economic, financial and military sanctions in the history of the world body. Iraq argues that a UN oil-for-food program -- launched in 1996 to allow Baghdad to export oil in exchange for food and other essentials such as medicine -- does not meet the 22-million population's most basic needs. "Voices in the Wilderness", based in Chicago, Illinois and funded by donations, has made tens of solidarity trips to Iraq. _______________________________________________ Sent via the discussion list of the Campaign Against Sanctions on Iraq. To unsubscribe, visit http://lists.casi.org.uk/mailman/listinfo/casi-discuss To contact the list manager, email firstname.lastname@example.org All postings are archived on CASI's website: http://www.casi.org.uk