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[ Presenting plain-text part of multi-format email ] Thanks to Dirk, Colin, Anai, and Bert for their help on this topic. Great contributions from a great DISCUSSION list. Briefing on Palace Construction in Iraq The issue of Saddam's building palaces is complex, but the claim that ithas been the main reason behind the worsening of conditions in Iraq isfalse. Although it's hard to refute it being a diversion of resources, itcannot be used to justify sanctions. In the report "Unsanctioned Suffering," the New York-based Center forEconomic & Social Rights (CESR) cited Sec. of State Albright's claim in1996 that Saddam had spent $1 billion over the last five years on palacebuilding. CESR reported that this estimate was exaggerated because it "wasbased on the cost of constructing similar buildings in the region andtherefore did not take account of Iraq's peculiar economic conditions" suchas low wages and building costs. In her book "Sanctioning Saddam," Sarah Graham Brown states that after theIran-Iraq war, the regime had allocated $2.5 billion on a presidentialpalace. The Iraqi economist Al-Nasrawi, in his book "The Economy of Iraq,"makes the same point. Here's my take on it. Towards the end of the first war, Saddam privatizedthe construction sector, giving preference to individuals with strong tiesto the regime. This in my opinion was part of his strategy to secure theirsupport. After both wars, the construction sector benefited from the needto reconstruct the infrastructure. Although prestige was definitely afactor, palace building may have been Saddam's way of buying them off (bygiving them contracts to build palaces). Although the State Department's figure of $1 billion may be exaggerated,the palace building was probably done by private contractors which meansthat they would charge enough money (in dinars) to make a sizable realprofit in a hyperinflationary economy. A Diversion of Resources? Palace building can only be classified a diversion of resources if fundswere used to import materials that could otherwise have been used to meetcivilian needs. It's not clear how much of the amount allocated for palacebuilding was used for imports. Which brings us to the question of the estimate. Even if the $1 billion isaccurate, it is staggered over five years which means that $200 million wasspent annually on palace building (or $400 million annually if you use theinflated $2 billion estimate from other sources). Iraq's civilian importsin 1989 were $11.1 billion (Alnasrawi). Even if we take the larger $400million/year estimate for palace building and assume that it was all usedon importing materials, that still is only 3.6% of 1989 imports. To saythat $400 million/year on palace building is the leading cause for thehumanitarian crisis (especially in an economy that was importing $11.1billion in civilian goods in 1989) is ridiculous. In short, one should emphasize that a) it's not clear whether this "$2billion" amount was used for importing materials (which would make it adiversion of resources) and b) even if this diversion of resources tookplace, it's an insignificant amount and can not be the main cause of Iraq'shumanitarian crisis. ============================================================ 4) Isn't Saddam spending all the money on palaces and luxuries for his cronies? No. According to the British Government's own figures, last year, if all of the illicit revenues available to the Iraqi Government had been channelled into the official humanitarian programme ('oil for food') revenues would have been increased by less than 3%. By contrast the UN currently diverts 28% of all 'oil for food' to pay for 'war reparations' and its own expenses. The mega-rich Kuwait Petroleum Company (KPC) was recently awarded $15 billion compensation : the folk at the KPC aren't suffering from malnutrition and water-borne disease. ============================================================ Myth 6: The Iraqi leadership uses money intended for humanitarian purposes to build palaces and enrich itself. The New York Times claims that "with oil sales blocked, [Saddam Hussein] chose to spend what money was available on lavish palaces and construction projects." (22) In the years before oil-for- food, it's important to recall that the Iraqi government was distributing food to its civilian population. The UN Food and Agriculture Organization said in 1995 of the rationing system that began in September 1990: "The food basket supplied through the rationing system is a life-saving nutritional benefit which also represents a very substantial income subsidy to Iraqi households." (23) Iraq is pumping as much oil today as it did before the Gulf War, but is making less money because of the change in oil prices and the dramatic rise of inflation since 1990. When one considers that three Iraqi dinars could buy $1 in 1990, and today it takes more than 2,000, the difference in oil sales between 1990 and today is significant. While Iraq is permitted to sell more than $5.26 billion of oil every six months, these funds are not at the discretion of Saddam Hussein, but are kept in a UN escrow account with the Bank of Paris in New York City. The sanctions, though intended to weaken Iraq's elite ruling class, only strengthen its political hegemony. With Iraq's population decimated by hunger, disease, and fear of US and UK bombs, the development of civil society is hampered, as are hopes for pluralism. Iraq's elite is empowered by a lucrative black market. With sanctions taking thousands of lives each month, the Iraqi government can better rally popular support and bitterness against the US government. ============================================================= Dear Roger, that's all I could find about palace-building. I found it here: http://www.irak.be/ned/archief/LEUGENS_OVER_IRAK.htm and here: http://www.irak.be/ned/kalender/CAMPAIGNERS%20Guide.htm Greetings. Dirk Roger Stroope Peace is a Human Right Austin College _______________________________________________ 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