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[casi] News, 3-10/8/02 (5)

News, 3-10/8/02 (5)


*  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


*  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


*  Labour MP makes Iraq visit
*  U.S. Anti-Sanctions Activists Protest at UN Offices in Baghdad


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

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

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

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

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.

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

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

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

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

"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

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."

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

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

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

Phillip Knightley is the author of 'The Secret Lives of Lawrence of Arabia'

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.


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

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.

BBC, 6th August

Iraq's central bank plans to issue a 10,000 dinar banknote for commercial

"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

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"

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.\8894.htm


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

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.

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.


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)

Source: Iraqi Satellite Channel, Baghdad, in Arabic 1220 gmt 8 Aug 02
Iraq Sanctions Monitor Newsletter #489 (see

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

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.



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

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.

by Masood Farivar, 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

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

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

"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.

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

"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

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

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.


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


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

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

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.

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