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[casi] News, 9-16/7/03 (1)

News, 9-16/7/03 (1)


*  US troops take over Iraqi swimmers' pool
*  Equipment vital to Iraq flows out of country Looted machinery smuggled
into Iran
*  Kurds force 7000 Shiite to evacuate
*  U.S. Troops Step Back In a Tense Iraqi City
*  Killing of American soldier mars first governing council meeting
*  US troops appear safe in Shiite southern Iraq
*   Iraq to form war crimes court
*  Leader linked to Ansar in custody


*  UAE-Iraq trade rises to Dh2b
*  US administration in Iraq seeks extra 800 mln usd to aid oil sector -
*  'Entrepreneurs' benefiting from lifting of import duties
*  U.S. May Tap Oil for Iraqi Loans
*  US invites bids for $1bn worth of Baghdad's oil
*  Imports inundate Iraq under new U.S. policy Consumers revel, but
manufacturers cut jobs, close down
*  Industries dependent on Iraqi market stop operations in Irbid     


by Kamal Taha
Iraq Sport, 24th June

Iraqi swimmers hoping to make a splash at the world championships in
Barcelona next month are having to train in the murky Tigris River because
the US Army have taken over the only Olympic-sized pool in Baghdad for their
troops, team trainer Faisal Sayed Jaffar said Thursday.

Infantry Sergeant Billy Thierry, who is in charge of the al-Qadissiya pool,
said his orders were that the Iraqi Olympic team were entitled to use the
place only from 6:00 to 8:00 am. "This is totally unfair because most of the
12 members of the Iraqi team are university students. In any case, we need
two three-hour training sessions, one in the morning and one in the
afternoon," Jaffar said.

Jaffar appealed to the International Olympic Committee (IOC) and world
swimming's governing body FINA to intervene if they are to get their
training schedule back on track in time for the championships. He said that
when a wave of looting swept the country following the US-led ouster of
Saddam Hussein's regime on April 9, team members rushed to the pool complex
to salvage what they could. "After three weeks of cleaning and repairing the
place, we were kicked out by US officials, who told us not to return,"
Jaffar said. "All attempts by Iraqi officials to recover the pool were in
vain. Hence we have to train in the Tigris even though the conditions are
not suitable," he complained.

Al-Qadissiya's indoor pool in eastern Baghdad was built by a South Korean
firm in 1983 and is the only one with the specifications of sports
competitions, in addition to serving as headquarters for the Iraqi Swimming
Federation. "Training in a river is very different from training in a
swimming pool," Jaffar explained. "There are no walls to turn, the water is
too troubled to regulate movements and the pressure of the water on the body
is totally different. It will be very difficult to compete with the world's
top swimmers." As a result, team members are not always showing up for the
training. "US soldiers are using the only suitable pool we have in Iraq for
their own entertainment. We have become strangers in our own country," said
Omar Faisal, a member of the team.

The swimmers meet every afternoon near al-Ima bridge in northern Baghdad
wearing ordinary shorts and without swimming goggles since Uday Saddam
Hussein, the elder son of the deposed president who headed the Iraqi Olympic
Committee, liked only football and gave nothing to the swimmers. Jaffar said
that after the orgy of looting that swept Baghdad, he saw on street
pavements lots of trunks and goggles that had been tucked away in the
cupboards of the Olympic Committee. "I am asking the International Olympic
Committee and FINA to contact the US government to obtain the departure of
all American soldiers from all Iraqi sports facilities," he added. The
Al-Shaab stadium, where soccer tournaments used to take place, and the
Saddam basketball hall have also been taken over by the Americans.

by Robert Collier
San Francisco Chronicle, 2nd July

Haj Umran, Iraq -- This isolated highway crossing on the Iranian border has
become a black hole into which Iraq's former wealth is being sucked.

The dozens of backhoes, industrial generators, drilling rigs, cement
mixers,cranes and heavy factory machines lined up here waiting to cross into
Iran are a virtual catalog of the vast amount of equipment stolen from Iraqi
government facilities after the fall of Saddam Hussein's regime.

The smuggling of looted goods desperately needed to rebuild the country
passes without any interference from the local autonomous Iraqi Kurdish
government -- nor from the United States, which allows the Kurds to maintain
a standing militia and control the border posts.

U.S. occupation authorities insist that American and British forces have
neither the mandate nor the manpower to halt the trade.

U.S. officials have repeatedly blamed the nationwide looting on Hussein
loyalists bent on sabotaging reconstruction. But Kurdish officials, truck
drivers and the owner of one large smuggling enterprise charge that the
trade in stolen goods is an organized criminal activity in which both
businessmen and Kurdish leaders take a cut of the action.

"It's a mafia, which we can't stop," said an official of the Kurdistan
Democratic Party, or KDP, which rules Haj Umran and the northern half of the
Kurdish region.

 "The people who are in charge are the top peshmerga, who have too much
influence," he said, referring to the guerrilla commanders who led the
Kurds' fight against the Baghdad regime since the early 1970s.

By all accounts, the trade is highly profitable.

"Bulldozers, everything -- I'm ready to carry anything, even an airplane,"
boasted one of the busiest smugglers at the Haj Umran border crossing, as he
supervised the arrival of a half dozen of his fully laden trucks.

The man, who was interviewed Saturday and asked that his name not be
published, said the best bargain he was offering that day was a 1983 Komatsu
D155A bulldozer. He said he had purchased from a middleman in Irbil, the
capital of the Kurdish region, for $10,000 and had arranged to sell to an
Iranian merchant for $34,000. The final price, to judge by a quick survey of
listings of used construction equipment on the Internet, is about one-third
below the average cost in the Middle East for that year and model.

Asked whether the bulldozer was looted, the smuggler said, "Of course, but
don't ask me where. Everything here was looted."

Stroking his ample belly and waving a satellite phone as he talked, he said
with a wide grin: "Some people say this makes me a war criminal, but so
what? It's good fortune, and it's my work."

Asked whether Kurdish or American authorities ever interfered with his
trucks, he replied, "No, never. I have no problems."

Officials of the U.S.-British coalition ruling Iraq say they do not have
enough troops to stop the smuggling, even though they agree that it is
seriously weakening their efforts to stabilize the country.

"There's been an evolution to more criminal looting, finding more high-
value items for trafficking and export," said L. Paul Bremer, the U.S.
administrator of Iraq, when asked about the issue Tuesday. "We obviously
need to improve security of the borders, and we will take steps to do that.
We know we have a problem."

The smuggler and others in the trade said the stolen goods had been flowing
unimpeded since April, when Baghdad and other major cities were rent asunder
by a spasm of looting that has not yet fully abated.

None of those interviewed seemed to have moral qualms about their work.
"It's all Saddam's property, and he was a bad man, so it's fair to take it,"
said one man as a crowd of Kurdish truckers gathered around.

"Saddam was a thief!" shouted another. "Yes, this is a fair business!" said
someone else.

U.S. officials initially played down the looting, saying it was merely
exuberant public reaction to liberation from dictatorship. But in recent
weeks, they have begun to acknowledge that it is causing much more damage to
Iraq's economy than the war itself.

As American firms such as Bechtel and Halliburton rebuild power plants and
water purifying stations, criminals steal the new equipment almost as fast
as it is installed. High tension electrical lines are melted into copper
bars, and generators, water filters and other machines weighing many tons
disappear in the dead of night. The rampant thievery has caused repeated
blackouts in Baghdad and southern cities, often lasting several days.

In southern Iraq, recently restarted oil refineries reportedly are already
working with smugglers to ship diesel fuel to Iran, just as they did for
years under U.N. sanctions.

"The people who do this are big companies, people who have been in the
business," said the smuggler, who said he had been a legitimate trader of
construction and industrial equipment for 10 years before the war, based in
Irbil. He said he had long done deals with many of the current looters and

On Monday, the smuggler showed his "legitimate" face, meeting with a
Chronicle reporter in his office at his family business in Baghdad's wealthy
Jadriyah district. The firm is a medium-sized company involved in a wide
range of import-export trade; the smuggler asked that its name be withheld.

He then invited the reporter to lunch at the White Castle, a restaurant
catering to Baghdad's business elite. After effusively greeting friends and
relatives -- what seemed like half the people in the restaurant -- he sat
down to vent anger at the corruption that he said stained the whole
contraband trade.

He denounced the KDP, saying it charges extortionate bribes to let his goods
pass. He noted that the Americans had decreed the elimination of all Iraqi
import and export taxes -- an order that Osman Surchi, chief of the Haj
Umran border post, had told The Chronicle on Saturday was being strictly
adhered to.

But the smuggler said Surchi charged huge fees under the table. For
example,he said, he had to pay Surchi $19,500 on the Komatsu bulldozer that
he had bought for $10,000, leaving only a slim profit before selling it in
Iran for $34,000.

Everyone gets into the act, he complained. KDP commanders in Irbil collect
their own bribes from the middlemen who bring the looted goods from Baghdad
and other cities, and Iranian border authorities charge additional fees on
the Iranian purchasers.

The smuggler and others interviewed for this article said it was unclear
whether the web of corruption included the two best-known Kurdish
politicians, the KDP's Massoud Barzani and Jalal Talabani of the Patriotic
Union of Kurdistan (PUK).

It is widely believed that the smuggling is taking place on all of Iraq's
borders, with stolen goods also making their way to Syria and Turkey. But
the Kurds appear to play the dominant role in cross-border trafficking.

Only on smaller items can smugglers avoid paying bribes, sources said. At
all border points, items such as computers and televisions are taken by mule
or four-wheel-drive vehicle around the official crossings, out of view of
greedy border officials.

On larger items, the two major Kurdish political factions seem to practice a
de facto division of labor. While the KDP specializes in heavy industrial
and construction equipment, the PUK specializes in spare parts, scrap metal
and weapons.

At the main PUK-controlled border post, Bashmakh, 100 miles southeast of Haj
Umran, the main business appears to be cannibalized parts of industrial
machines and construction materials.

"The trucks come full of machines that have been stolen and taken apart," a
U.N. official who works in the PUK region said Sunday. Across the border, at
Mariwan, Iran, one could see a several-acre area laden with piles of metal
bars and siding.

In Sulaymaniyah, the PUK capital, Shalow Askari, the group's acting foreign
minister, said his group tolerated the trade in scrap metal, much of which
he said was Iraqi weapons from the recently concluded war. "But whenever we
find materials that have been clearly looted, we stop it," he insisted.

KDP officials at Haj Umran showed a mix of brazen denial and extreme
nervousness about their role in allowing the smuggling to pass. When a
Chronicle reporter arrived Saturday morning, Surchi immediately ordered his
officials to stop the trucks, the drivers said later.

"There is no looted merchandise here," Surchi said. "It's all imported from
Holland or Germany via Turkey."

Told that it certainly seemed looted, he switched tack immediately. "None of
these trucks will pass," he said. "We never let them go through. They always
have to turn around."

Surchi blamed the smuggling on the Kurdistan Workers Party, or PKK, a
Turkish rebel group that has no presence in the immediate region, and a
previously unknown group he said was called Red Fire.

Out of earshot of the reporter, he berated The Chronicle's Kurdish
translator, saying: "Get the American out of here. We've shut the border
because we don't want him to see any trucks crossing."

But when the reporter insisted on nosing around and found several smugglers
willing to talk, Surchi repeatedly interrupted the interviews or sent aides
to do so. "Don't say anything. As long as he's here, none of your trucks
will cross," they said in Kurdish.

Finally, an aide to Surchi approached the translator and said, "We're going
to complain about you to the prime minister's office," referring to the
Kurdistan regional government.

"We'll tell them you're doing intelligence work for the Americans. Watch

Arabic News, 10th July

Several Bashmarka Kurds who returned back to Khanqin in the downtown of Iraq
after the collapse of the Iraqi regime three months ago expelled thousands
of Shiite families who settled in the area, at the directives of the former
regime, 30 years ago.

The committee in charge of evacuees rights which takes al-Miqdadeyah as a
headquarters ( 80 Km north east Baghdad) indicated that 7,000 families were
forced to evacuate walking on foot or by cars and headed to the south and
resorted to deserted buildings.

Adnan, a fighter from the Bashmarka who returned back to the region after he
was forced to leave it, 30 years ago said "I left together with my family to
Babel ( 100 Km to the south of Baghdad ) in 1975. After ten years I joined
my father in Iraq where I joined the Kurdistani democratic party and I
returned back in 1991 and settled in al-Suleimaneyah in Kurdistan of the
self- rule. Today I have returned back home."

Adnan, who is a member in the new police which was formed after the collapse
of the Iraqi regime, said that hundreds of the Kurdish families which
evacuated along years to the south or Baghdad or al-Ramadi "returned back to
their houses and restored back their lands taken from them." He said "the
Kurds used to represent 90% of the population of Khanqin and we do (want) to
relink the region with Kurdistan and not Baqouba, the center of Deyala "
Shiite province.

Khanqin which is inhabited by 500,000 is 145 Km to the north east of Baghdad
and just 10 Km from Iran. This area was exposed to a campaign of forced
"Arabization" carried out by Saddam Hussein through transferring the Kurdish
families from it. The population said that the Arabs who were expelled were
used to deal with the former regime and they were expelled because they are
responsible for liquidating large number of Kurds.

by Rajiv Chandrasekaran
Washington Post, 12th July

FALLUJAH, Iraq, July 11 -- U.S. forces have begun vacating encampments in
this violent city west of Baghdad, including a municipal office that has
become a flash point for anti American tensions. The move accompanies a bid
to quell armed resistance by giving new local police officers more
responsibility for targeting gunmen and guarding key installations.


The pullout of troops from fixed positions in Fallujah began last week and
likely will be completed by next week, said Lt. Col. Eric Wesley, executive
officer of the 2nd Brigade of U.S. Army's 3rd Infantry Division, which
controls the Fallujah area. The process started with the removal of soldiers
from electrical substations and schools, people in the city said.

On Thursday afternoon, the brigade conducted its most symbolically
significant withdrawal, moving out troops who had been guarding the mayor's
office and driving away two M2 Bradley Fighting Vehicles parked next to the
building. Wesley said the brigade will remove soldiers from 22 locations in
and around the city.

The soldiers will be replaced by newly trained Iraqi police officers as well
as an armed Iraqi quick-reaction force that Wesley said would be "a cross
between meter maids and a SWAT team."

"We want Iraqis to take on greater and greater responsibility" for the
city's security, he said.

Wesley said that despite the withdrawals from fixed positions, the brigade
would not abandon the city. Soldiers will continue to patrol at all hours of
the day, he said, and a fast response unit will be ready to swoop in should
local police need backup.

"We're still committed to Fallujah," he said.

But brigade commanders said they believe that having a less visible presence
in the city and ceding more authority to Iraqi police could help to address
widespread anti-American sentiments in the city, the scene of repeated
attacks over the past several weeks.

The withdrawals have drawn a mixed reaction in the city, with ordinary
residents welcoming the move, the mayor's office urging caution and police
officers calling for the pullout to proceed faster.

"We're happy to see them go," said Mohsen Kubaisi, a cigarette vendor. "They
shouldn't have been here in the first place."

At the mayor's office, municipal employees took a different view, saying
they wanted to make sure the local police were sufficiently trained and
armed before U.S. troops left key installations. "We support the idea of the
soldiers leaving, but we want to be certain our policemen are 100 percent
ready," said Karim Aftan, spokesman for the mayor, Taha Bedawi. "The
Americans should not leave too soon."

Over at the police station, the few officers on duty said they wanted the 20
Americans who have been guarding the building around the clock to go
immediately. On Thursday, about 30 policemen held a protest in front of the
mayor's office, threatening to quit if U.S. forces did not leave and allow
them to patrol alone.

On Wednesday night, three rocket-propelled grenades were fired at the police
station, officers said. And last Saturday, seven police cadets in Ramadi
were killed after a bomb planted next to a utility pole exploded during
graduation ceremonies. Policemen here said both incidents indicated to them
that working with U.S. forces has become increasingly dangerous.

"When they are here, it makes our job worse," said 1st Lt. Nisan Mohammed.
"We can do it better without them. If they are not here, nobody will shoot
at us."

Mohammed said that if the U.S. soldiers guarding the station, who spent the
afternoon in Humvees in the parking lot, did not leave by Saturday, "we will
quit working and go home. . . . We will leave the building for the

A U.S. military officer in Fallujah said he viewed the demand as a
negotiating tactic, and he doubted that many officers would quit. The
official said the brigade's commanders had planned before the protest to
pull most soldiers from the station and keep only a few liaison officers
there. The commanders also had planned to stop having U.S. military police
accompany Iraqi police on patrols, the officer said.

Wesley called the protest "a very positive sign."

"We need the people of Iraq, the citizens and the leadership, to step up to
the plate and assume a leadership role in the transition process," he said,
pledging that by the middle of next week the police "will be completely
independent in terms of their activity."

by Patrick Cockburn
The Independent, 14th July

A governing council of Iraqis was inaugurated yesterday in Baghdad in an
American effort to gain local support in controlling Iraq. The 25 members of
the body were drawn from different communities.

The United States, whose soldiers have come under increasing guerrilla
attack, hopes that the council will be able to re-establish law and order.

An American soldier was killed and four wounded in a rocket attack on their
convoy in Baghdad early today.

There was also a car bomb yesterday outside a police station in a Baghdad
suburb sometimes visited by US soldiers, killing at least one, as the
council met.

Shortly afterwards, a group claiming to be an al-Qa'ida wing said in an
audio tape aired on an Arab television station that it, and not the
followers of Saddam Hussein, were behind attacks on US forces in Iraq. An
unidentified voice on the tape said: "I swear by God no one from his [Saddam
Hussein] followers carried out any jihad operations like he claims ... they
[the attacks] are a result of our brothers in jihad." The tape also warned
of an imminent attack on the US, which would "divide the back of America

Washington had wanted to limit the governing council to an advisory role
until about three weeks ago when it became clear that armed resistance to
the occupation was increasing, looting had not ended and the economy was
largely paralysed. It hopes that the council will be able to re-establish
the police force and government ministries, something that the Coalition
Provisional Authority has been unable to do.

The first act of the council was to declare 9 April, the day that Saddam was
officially overthrown, as a national holiday. It will elect a leadership of
the council today.


Jordan Times, 15th July
NASSIRIYA, Iraq (AP) ‹ While American troops in the centre of Iraq face
daily attacks, US soldiers in this southern city say they feel safe and even
welcome here.

Saddam Hussein's persecution of the predominantly Shiite Muslim region
during his 23-year rule may be why coalition forces have been welcomed south
of Baghdad, where Shiites live in greatest numbers. Shiites make up 64 per
cent of Iraq's 24 million people.

"Here, it's pretty safe, but we have to be cautious," said Marine Cpl.
Ayoade Ojikute, a 31 year-old from New York City, as he sat in the scorching
sun in Nassiriya.

"We hear all the news from Baghdad and we don't know what's going on."
Unlike cities in the so-called "Sunni Triangle" ‹ Baghdad, Fallujah, Tikrit
or Ramadi ‹ southern Iraq has proven remarkably peaceful since Saddam's
ouster April 9.

"Our relations with the Shiites in our area are very, very good. We work
with them everyday and they work with us," said Maj. Gen. Keith Stadler, the
commander of the Marine Expeditionary Brigade in Hilla. "I think they
clearly see promise in this temporary partnership." Stadler said the last
Marine to be killed in action in the area was April 12, while in Baghdad a
US soldier was killed in fighting Monday. Since US President George W. Bush
declared major combat operations had ended May 1, at least 31 US troops have
been killed by hostile fire in Iraq.

Since it has been quiet in southern Iraq, infrastructure repair has been
able to move forward and the population can see life improving.

Most of southern Iraq is getting more electricity today than in prewar
periods. The same goes for water supplies.

Few cars wait to get gas unlike in the capital where lines at pumps stretch
for hundreds of yards.

People are also making more money than under the Saddam regime.

"We don't think that the process is going to take a generation here. We
think that the process is in motion," said Maj. Ralf Dengler, Marine
executive officer in Dhi Qar Province, of which Nassiriya is the provincial

Police officer Mohammad Saheb said he made about $10 a month before the war.
He's now taking home $60.

"People here are reacting positively to and with the Marines," he said.

Still, locals complain about lack of security and unemployment.

Capt. Ray Lopes, aviation officer in Nassiriya, said unemployment among the
750,000 people of Dhi Qar is 65 per cent, but the hope is businesses and
factories closed by the war will reopen soon.

Officials connected to the Marine Expeditionary Forces said the unit had
built eight bridges and repaired 47 schools, three hospitals, nine utility
systems and eight public buildings. It added that 71 projects are in

In the Shiite Muslim holy cities of Karbala and Najaf, Marines could be seen
going about without flak jackets.

Lt. Col. Christopher C. Conlin, the Marines top commander in Najaf, told a
reporter the city was safe round the clock. At midnight streets still were

Najaf's interim mayor, Haidar Mahdi Mattar, said "we are seriously working
with the brothers in the coalition forces to improve services." But although
soldiers here have not faced daily guerrilla-style attacks like those in
central Iraq, coalition troops have suffered causalities in Karbala and

Late last month, protesters in the southern city of Majar Al Kabir stormed a
police station after British troops fired on protesters. Four British
soldiers died in the attack on the station, and two others were killed in a
clash near the mayor's office. Two days later, gunmen killed an American
soldier who was investigating a car theft in Najaf.

Conlin said the Najaf killing was criminal not political.

On Thursday, a mortar attack targeted one of the Marines bases in Karbala,
but no one was wounded, the region's commander Lt. Col. Mathew Lopez said.

by Nadim Ladki
Reuters, 15th July


As the number of American combat deaths neared the 1991 Gulf War total, the
U.S. military announced a new nationwide crackdown -- Operation Soda
Mountain -- to eliminate armed Iraqi resistance and said its forces had
killed five Iraqi fighters.


As U.S forces try to crush growing armed resistance, the military said
troops had conducted 53 raids across Iraq, detaining 316 people and
confiscating arms, ammunition and explosives in Operation Soda Mountain
launched on Saturday. Another operation, Ivy Serpent, is part of the

U.S. forces killed five Iraqis and captured another after they came under
ambush while driving out of an ammunition depot, the commander of the unit
involved said.

There were no U.S. casualties in the ambush between the cities of Ramadi and
Habbaniyah, about 100 km (60 miles) west of Baghdad in particularly hostile
territory for U.S. troops.

Thirty-two U.S. soldiers have been killed in Iraq since President George W.
Bush declared major combat over on May 1.

In an abrupt about-turn, the U.S. military said on Monday thousands of
troops from its 3rd Infantry Division would stay in Iraq until further
notice instead of returning by September in line with an announcement made
only last week.

U.S. Senate Democrats blasted President George W. Bush over the spiralling
costs of the war and for not seeking more international help in the
reconstruction of Iraq in the face of skyrocketing U.S. budge deficits.

The charges came as the White House tried to deflect accusations that it
exaggerated intelligence on Iraq's weapons of mass destruction and as it
announced the federal deficit will balloon to a record $455 billion (286
billion pounds) this fiscal year.

by Patrick J. McDonnell and Jeffrey Fleishman
Gulf News, from Los Angeles Times-Washington Post News Service, 16th July

Suleimaniya: Nearly four months after bombing his compound and killing 43 of
his armed followers, U.S. forces acknowledged Monday that they had arrested
one of northern Iraq's most colourful and enigmatic Muslim leaders, a move
likely to inflame tensions in a mountainous corridor along the Iranian

Handcuffed and blindfolded, Ali Bapir and three members of his Komaly Islami
party were whisked away in a U.S. helicopter. The arrest was part of a trap
and occurred Thursday after Bapir and his men had accepted a U.S. invitation
to a meeting at a nearby resort.

American soldiers stopped Bapir's vehicle on the way to the hotel and took
Bapir and his entourage into custody.

Bapir is one of the most charismatic fringe leaders in northern Iraq. In
many ways, he represents the challenge U.S. forces face in coaxing radical
clerics away from militantism.

Bapir has long said he desires a relationship with the West, but his
suspected links to Ansar Al Islam - a radical group with ties to Al Qaida -
often have made his overtures suspect.

Bapir and 3,000 to 5,000 of his followers lived in the village of Khurmal in
northeastern Iraq.

About 200 Ansar families lived in Khurmal, and many of Ansar's guerrillas
would appear nightly in the village to take refuge from battles with the
Washington-backed militia controlled by the Patriotic Union of Kurdistan.
Bapir repeatedly denied that his band of armed men supported Ansar.

But the PUK - which gave Bapir hundreds of thousands of dollars a year in
hopes that his group would abandon its radical tendencies - determined
before the U.S. invasion that Komaly Islami was too closely aligned with

U.S. forces widened the scope of its cruise-missile attacks to include
several of Bapir's compounds in the foothills near Khurmal. Bapir
surrendered, and days later he and his surviving followers were taken to the
town of Ranya.

Bapir said: "I don't know if the U.S. hit us because we are Islamic. If we
have done anything wrong, the U.S. must tell us. ... If there is no reason,
the U.S. must apologise."


by Saifur Rahman
Gulf News, 10th July

Dubai, 09-07-2003: Trade between the UAE and Iraq rose to Dh2 billion in
2002 from around Dh1 billion in 2001.  This is set to rise much higher this
year due to the changing political and economic scene in the country,
according to a senior Dubai government official.

Besides aid cargo, consumer goods have also begun to arrive via Jordan,
Kuwait, Saudi Arabia and now via Umm Qasr.

Meanwhile, a high-ranking Kurdish delegation visiting the UAE has sought
technical expertise from Dubai to help Kurdistan revamp its agro-based
economy. The delegation met officials of the Dubai Chamber of Commerce and
Industry (DCCI).

"We are seeking technical expertise of the UAE, especially from Dubai to
help the people of Kurdistan," said Nasreen Siddiq, Kurdish minister for
reconstruction and development.

The Kurds grow 1.5 million tonnes of wheat per annum. The Kurdish region is
also rich in minerals. Most of Iraq's oil reserves, estimated at 320 billion
barrels, are located in the Kurdish-populated northern region.

DCCI officials said they are doing their best to promote trade. The DCCI
recently set up an Iraqi business council to enable them participate in

Ahmed Al Banna, DCCI's Deputy Director General, said, "Shipping links
between the ports of the UAE and Iraq have been established and several
vessels are carrying commodities to Iraq. This will increase trade between
the UAE and Iraq this year.

"Trade crossed Dh1 billion in 2001 and Dh2 billion last year. Now that the
economic sanctions are over and Iraq is going to enter into free trade, we
expect a steep rise in commercial activities."

(AFX-Focus) 2003-07-11 00:17 GMT

BAGHDAD (AFX-ASIA) - The US civil administration in Iraq is requesting an
additional 800 mln usd from Congress to aid the recovery of the nation's oil
industry, taking the total cost to 1.2 bln, a senior coalition official

The official said the administration is requesting the money to repair the
country's oil fields, considered the cornerstone for its revival.

Congress had already earmarked 400 mln usd to repair the fields, but faced
with blown up pipelines, looting, and refineries and equipment in worse
shape than previously thought, the US civilian administrator for Iraq Paul
Bremer is asking an additional 800 mln, the official said on condition of

The official added that the coalition aimed to pump out 1.2 mln barrels per
day (bpd) by the end of the year and to more than double the figure to 3.0
mln bpd by next spring or early summer.

Oil is crucial to the coalition's plans for the country as Bremer is banking
on Iraqi petroleum sales to generate 3.4 bln usd in the state coffers this
year, which would pay for half of Iraq's 6 bln usd 2003 budget.

The official said plans are underway to collaborate on the 2004 budget with
the Iraqi governing council, to be unveiled later this month, as the US-led
occupation tries to make Iraq into democracy after years of Saddam's
authoritarian rule.

Meanwhile, the coalition's military commanders are mulling the creation of
an indigenous paramilitary force in Iraq to help shoulder the growing
security burden.

Lieutenant General Ricardo Sanchez said he is considering using tribal
forces to help protect infrastructure which is under relentless threat of
sabotage from Saddam loyalists.

"The key here is to close the gap between the police and the army, and we
believe that we can in fact stand up very rapidly some force that is in
between those two ends of the spectrum that will allow us to get Iraqis
beginning to assume some of the responsibility for bringing security and

Sanchez gave no timeframe for the creation of such a militia or indication
of how large it would be.

Iraqi citizens, particularly in the capital Baghdad, have expressed outrage
at the coalition's failure to provide a sense of security in the country in
the three months since Saddam's regime tumbled.

RFE/RL IRAQ REPORT Vol. 6, No. 30, 11 July 2003


Many Iraqi businessmen and "freelancers" are benefiting from the CPA's
lifting of import tariffs, according to international press reports. The
tariffs were lifted by CPA administrator L. Paul Bremer in June through the
end of the year. The decision has spurred hundreds of Iraqis to apply for
import licenses, Bloomberg reported on 4 July. Officials at the Baghdad
Chamber of Commerce have said that they issue about 400 cross-border import
licenses per day, a 50 percent increase from the prewar figure. The licenses
cost up to $8. Chamber General Manager Abd al-Malik Husayn cited the lifting
of tariffs as the "principal reason" for the surge. "Before, it wasn't easy
to trade," trademark manager Sohad Ahmad told Bloomberg, adding, "This is a
golden opportunity for merchants."

For those Iraqis willing to lug items ranging from cars to televisions
across Iraq's borders, the work remains dangerous, however. One Iraqi, who
transports car parts and clothing from Jordan, reported narrowly escaping a
hooded gang armed with Kalashnikov rifles that tried to commandeer his
vehicle. Storeowners have also reported that they remain under threat from

But along with the surge of entrepreneurship come complaints of too much
competition and a lack of regulation. A Baghdad appliance storeowner
complained that he has had to lower the prices of his televisions to compete
with newly licensed businesses. "I'd prefer laws," Nabil Abu Rivan said,
adding, "At the moment, anybody can sell, import or buy." Most product
prices have seen substantial increases, however. A 12-pound block of ice
that once sold for around 40 cents now commands about $3. Power generators
have increased from a prewar price of $500 to $1,100. According to a 3 July
AP report, some Baghdadis are transporting large generators around
neighborhoods, selling amps of electricity door-to-door. These
"entrepreneurs" park their truck-sized generators on a block and run lines
to each customer, charging each customer individually for usage, effectively
creating temporary minipower stations, AP noted.

Meanwhile, in other parts of Baghdad, bootleggers sell fuel -- despite a ban
by the CPA -- on the side of the road at triple the price of gas stations,
to Iraqis unwilling to wait in half-mile long lines at the pumps. According
to AP, if there is a shortage of something in Iraq, there is someone aiming
to make a profit from it. (Kathleen Ridolfo),0,6478466.story

by Warren Vieth
Los Angeles Times, 11th July

WASHINGTON ‹ The Bush administration is considering a provocative idea to
pledge some of Iraq's future oil and gas revenue to secure long-term
reconstruction loans before a new Iraqi government is in place to sign off
on the proposal.

The plan, endorsed by the Export-Import Bank of the United States and some
of America's biggest companies, would help avert a looming cash crunch that
has the potential to stall the postwar rebuilding effort. One U.S. official
rated the proposal's prospects at 50-50.

But the plan is drawing fire from some administration officials, lawmakers,
policy analysts and prominent Iraqis who say it would mortgage the Persian
Gulf nation's most treasured resource, prevent future leaders from deciding
how to spend their oil money and put U.S. taxpayers at risk.

"Iraqis believe their oil should not be touched by foreigners, that it
should remain in the hands of the Iraqi government and that no one has a
right to do anything before an elected government is in place," said Fadhil
Chalabi, executive director of the Center for Global Energy Studies in
London and a former Iraqi Oil Ministry official.

"As an economist, I believe in what they are proposing. You couldn't come up
with a better formula," Chalabi said. "But Iraqi politics and the way they
look at these things are not encouraging. It could create problems later on.
Better to wait until a government is formed."

That may be too late, in the view of the plan's supporters. The
Export-Import Bank and an industry coalition that includes Halliburton Co.,
Bechtel Group Inc. and other major companies that are interested in winning
contracts in Iraq are warning that unless steps are taken soon to secure new
funds, the reconstruction well could run dry.

"Common sense says get Iraq running. How do you get the country running? By
using its own oil revenue 100% for the benefit of the Iraqi people," said
Export-Import Bank Chairman Philip Merrill. "If you want to wait three or
four years, be my guest. But that means the country is going to be running
on the dole of the United States."

Many experts agree that Iraq is headed for a possible cash flow crisis as
reconstruction costs escalate, initial funds are depleted and the resumption
of oil exports is delayed due to damage caused by looting and sabotage.

But they part company over whether the U.S.-led occupation administration in
Baghdad has the legal or moral authority to pledge future oil revenue as
loan collateral before the issue can be debated by elected Iraqis.

"Unless a reconstituted Iraqi government or the U.N. Security Council
authorizes the plan, it appears to violate international law," said Rep.
Henry A. Waxman (D-Los Angeles). "We do not have the right, without
additional authority, to impose financial obligations on the future
government of Iraq."

Waxman, the ranking Democrat on the House Government Reform Committee, has
asked the Export-Import Bank, the Pentagon and the U.S. Army Corps of
Engineers to disclose more information about the proposal and the role
played by Halliburton and other companies in crafting it.

Opponents of the plan warn that if a future Iraqi government chose to stop
making payments on the obligations, U.S. taxpayers could wind up holding the

"We're going to be on the hook, just like U.S. banks were on the hook to
Mexico in the early 1980s and U.S. lenders were on the hook to South America
in 1990," said independent energy economist Philip K. Verleger Jr.

Although the proposal is under consideration in Washington and Baghdad, the
State Department has expressed concern about the preemption of Iraqi
decision-making authority and the possibility that a future government might
choose to default on the debt.

The Treasury Department has voiced similar reservations, warning that the
creation of a new class of debt could complicate U.S. efforts to persuade
other countries to write off or restructure Iraq's massive prewar debt

Still, a Treasury official who requested anonymity said the plan has merit
and might well win approval. "It's a 50-50 proposition right now," the
official said.

Experts estimate that rebuilding Iraq could cost anywhere from $20 billion
to $100 billion over several years. Oil exports are expected to net about
$3.5 billion this year and $14 billion in 2004. But some of that money will
be needed for other purposes, and coalition officials continue to scale back
their export targets as pipeline explosions and power outages constrain

The administration has been financing reconstruction from a $7-billion pool
of congressional appropriations, international contributions and seized
Iraqi assets. But concern is growing that the rising costs could consume all
of the money set aside so far and that initial oil sales will not make up
the difference.

"Existing revenues for reconstruction are not adequate to sustain the effort
much beyond the end of this year," said Edmund Rice, president of a business
group called the Coalition for Employment Through Exports. "The crunch could
come in late autumn or after the first of the year. But roughly six months
is when they're going to hit the wall on resources."

The oil loan proposal is designed to bridge the funding gap. Under the plan,
a portion of Iraq's future oil and gas revenue would be pledged as
collateral to repay loans or bonds issued to finance infrastructure
improvements. An Iraq Reconstruction Finance Authority would be established
to review projects and arrange the financing.

The industry coalition has proposed using the financing mechanism to raise
$3 billion to $4 billion a year for reconstruction work on a
project-by-project basis. The Ex-Im Bank envisions raising $25 billion to
$30 billion to boost Iraq's oil production to as much as 5 million barrels a
day from its current level of less than 1 million barrels.

Depending on how much money was raised, the plan could wind up claiming
anywhere from a small fraction to the lion's share of Iraq's oil revenue
over a decade or longer.

The Iraqi reconstruction authority would use the borrowed money to pay
contractors for large-scale improvements such as renovating oil wells or
building power plants. The loans would be guaranteed by a consortium of
export credit agencies, including the Ex-Im Bank and its foreign
counterparts. The financing would be reserved for new projects and would be
subject to competitive bidding open to companies from all countries.

"Bechtel and Halliburton would have to rebid on a level playing field with
everybody else," said Rice, whose coalition represents 28 companies and two
trade groups. Members include such California-based giants as ChevronTexaco
Corp., Fluor Corp., Hewlett-Packard Co., Northrop Grumman Corp. and Oracle

Ex-Im Bank officials believe the U.S.-led occupation already has adequate
legal authority to launch the oil loan program. In May, the U.N. Security
Council authorized allied officials to disburse Iraqi oil revenue for
humanitarian purposes, economic reconstruction, disarmament and "other
purposes benefiting the Iraqi people." It did not address the use of future

Bank officials say there is a precedent for such a plan in the region. In
1948, a similar money-raising authority was established in behalf of the new
state of Israel before an elected government was in place to endorse taking
on the financial obligation.

Supporters of the oil loan idea insist that Iraqis should be included in the
decision-making process from the start. But until some form of elected
government is in place, the only Iraqi officials in a position to
participate are those appointed by allied authorities to staff the various
government ministries.

"We're better off to have the Iraqis involved," said Merrill of the Ex-Im
Bank. "Should they have control from Day 1? Probably not. Will they have
control at the end of the decade? For certain. Where on the curve do they
get control? I don't know.

"But they're likely to get there a lot quicker if they've got the money than
if they don't."

Lebanon Daily Star, 11th July

The US Army invited bids on Thursday for two new contracts worth up to $1
billion to rebuild Iraq's oil industry, opening up the lucrative business to
foreign firms previously excluded from such deals. The US-led Coalition
Provisional Authority (CPA) is also working on plans for a new cell phone

The oil contracts ­ one for southern Iraq and the other for northern Iraq ­
replace a no competition contract awarded in March to Kellogg Brown & Root
(KBR), a unit of Halliburton, the Texas oil firm run by US Vice-President
Dick Cheney from 1995 to 2000.

A planned cell phone tender would offer network operators and equipment
manufacturers a chance to win one of the most potentially lucrative
contracts  in Iraq, although administrators have not decided which of two
rival technologies to use, an Iraqi official said Thursday.

That original oil contract was met with a barrage of criticism, with
Democratic lawmakers complaining one company with links to Cheney was
getting too much business out of the Iraq war. The White House has rejected
any favoritism.

"The formal bidding process for these two contracts can now begin," said US
Army Corps of Engineers spokesman Lieutenant Colonel Gene Pawlik. "Foreign
companies can apply," he added.

KBR has indicated it will bid on the new contracts and other companies such
as Fluor Corp, which recently set up a joint venture with British
engineering group AMEC Plc, has also expressed interest.

The minimum amount of the proposed contracts will be $500,000 each and the
maximum $500 million each.

The initial phase will cover 24 months, followed by three one-year options.
Companies have until Aug. 14 to bid and Pawlik said no formal start-date had
been set for the jobs. A pre bid conference has been set for July 14 in

The KBR oil contract in Iraq was worth nearly $283 million by July 2 and
Pawlik estimated the final figure could reach about $600 million, far less
than the original $7 billion worst-case scenario ceiling.

KBR has received task orders for Iraq worth more than half a billion dollars
under a 2001 contract called the Logistics Civil Augmentation Program. So
far, money under the March oil contract has been spent on emergency repairs
to oil fields, delivering fuel to Iraqis and building base camp facilities
for workers.

The new contracts include extinguishing oil fires, environmental assessments
and clean-up at oil sites, the distribution of oil products, maintaining oil
fields and the sale of Iraqi crude oil and refined products.

An official at Iraq's Ministry of Transportation and Communications said the
CPA had put together proposals on how to put up for tender licenses to build
mobile phone networks.

"Nothing has been started yet, but there are some ideas for it," the
official told Reuters, asking that his name not be used.

His statement conflicted with that of a senior CPA official, who told
Reuters on June 16 that a tender had been issued and Iraq would adopt the
global system for mobile communications (GSM) standard used in Europe and
the Middle East.

A decision to use GSM would be a blow to US firms hoping to build a wireless
network based on the code division multiple access standard developed by
US-based Qualcomm Inc, but would allow customers to travel the region using
one phone.

One US lawmaker urged US Defense Secretary Donald Rumsfeld to ensure that
US-backed technology is deployed to safeguard US jobs and profits.

US civilian administrator in Iraq Paul Bremer said a soon-to-be appointed
governing council would have to consider any decision to build a cell phone
network since it entailed a change in Iraqi investment law.

by Robert Collier
San Francisco Chronicle, 10th July

Baghdad -- Along the streets of this city, sidewalks are crowded with huge
boxes containing televisions, kitchen appliances, air conditioners and

Almost overnight, it seems, Baghdad has been turned into a vast emporium of
imported goods.

It's part of a bold yet risky economic strategy by the U.S. occupation
authorities, who have eliminated all import taxes for goods coming to Iraq
at the same time they are pumping hundreds of millions of dollars into the
economy through cash payments to government workers.

As a result, many Iraqis are getting their first taste of the consumer-
oriented good life in many years, and they are snapping up imported goods
right and left.

But the boom has come at a high price because it has accelerated the closure
of hundreds of factories. After 12 years of economic crisis and strict
import regulations under U.N. sanctions, Iraqi manufacturers cannot begin to
compete with the price and quality of foreign goods. The closures, in turn,
have thrown large numbers of people out of work, increasing social tensions
at a time when public dissatisfaction with the U.S. occupation is growing to
dangerous levels.

Nevertheless, some Iraqis welcome the change. Tarik Assad seemed the paragon
of prosperity Tuesday as he lugged a new kitchen stove into the trunk of his
car in Baghdad's Kerradeh district. The four-burner, Chinese-made model had
cost only $90 -- a great bargain, he said.

Under Saddam Hussein, the same model cost about $150, more than a month's
salary in Assad's job as an accountant for the national oil ministry. Now,
the $90 is less than half his new monthly salary of $200.

"Thank God," he said. "My wife will be happy."

Like many of Iraq's 1 million state employees, Assad was recently given a
two-month, lump sum payment by the U.S. occupation authorities, who are
trying to dampen public anger with a flood of cash. Salaries for lower and
midlevel positions were increased -- in some cases dramatically -- while pay
for top- level officials was cut.

With so much new cash in the economy, shopkeepers are busy trying to keep up
with the buying frenzy.

"Most of my customers are state workers who recently were paid," said store
owner Mohammed Basem. "For many people, this is the first time they've
bought an appliance in many years."

Basem said his store is now grossing $7,000 to $12,000 per day. Under
Hussein, it was bringing in only $2,000 to $7,000 per month.

The losers in the new economy, however, are complaining loudly. Textile
plants and clothing factories have been devastated by the influx of cheap
clothing, much of it made in China.

Other homegrown operations have also been damaged by the open-door import

Under Hussein's regime, for example, imported beer and sodas were subject to
150 percent customs duties. After the war, local bottling plants were shut
down and imported beverages -- now free of tariffs -- have taken over the
market. Streets and highways throughout the nation are festooned with
pyramids of brightly colored Saudi and Syrian soda cans, stacked up by
vendors to advertise their wares.

"Without customs duties, the domestic producers cannot sell," said Khamis
Al-Abed, head of a large consortium that includes one of Iraq's largest
soft- drink distributors. "It's not a very good economic policy."

Even before the war, Iraq was in severe recession. Last year, the gross
domestic product was $25 billion, according to U.S. estimates, one-fifth of
its 1979 level. This year, it is expected to fall to about $15 billion.

The nation's farmers are also being jolted by the elimination of most
agricultural subsidies, which were generous under Hussein.

Mohammed Juad Hussein, whose Al-Helli Chicken Co. has been dormant since
March 30, used to be one of the nation's largest chicken butchers. Now, he
says he simply can't compete against containers full of American Tyson
chicken legs, which are shipped to the Middle East at bargain-basement
prices because Americans prefer white meat to dark.

Hussein says domestic Iraqi chicken costs $1.30 per kilo (2.2 pounds) to
produce, while it retails for only $1.25. Before the war, heavy government
subsidies cut his costs, and most production was sold back to the government
at a guaranteed profit that worked out to about 13 cents per kilo.

He has laid off all but 20 of the firm's 140 workers. The fate of the rest,
he says, "is in the hands of Allah."

Iraq's new economy is largely the work of L. Paul Bremer, the U.S.
administrator of Iraq, who has argued forcefully in favor of a free-market
system, including rapid privatization of state-owned industries.

"We have succeeded in opening Iraq's borders and bringing modern free-trade
policies here," he said last week. But he acknowledged that his policies are
running into heavy opposition from Iraqis.

"I certainly believe that privatization is the way to go for Iraq, to put
its obsolete state-run Stalinist industry system back into productive use,"
he said. "But I recognize that it's a sensitive subject, and I don't see any
consensus among the Iraqis on it. So it will be a subject for the
(soon-to-be- named) Iraqi governing council to discuss."

The debate may be repeated throughout the Middle East. In early May,
President Bush proposed a U.S.-Middle East free trade area to cover the
region's 22 nations. He called the proposal "an expanding circle of
opportunity, to provide hope for the people who live in the region."

Many Iraqis say the U.S. economic shakeup in Iraq is ill-advised. "We need a
free trade system, but only within an institutional basis, as part of a
comprehensive package," said Hamid Al-Jumaily, a professor at Al-Nahrein
University in Baghdad and one of the country's leading economists.

"At present, there is no economic policy as such, either by (private)
business enterprise or by government. Just opening the borders and
eliminating tariffs isn't free trade."

Jordan Times, 15th July
AMMAN (Petra) ‹ Despite a 19 per cent rise in revenues from Al Hassan
Industrial Estate exports during the first half of this year, the exports'
volume has declined with the exception of those of textiles and garments.

Revenues went up to around $153 million from January through June 2003
compared to $129 million during the same period of last year.

The increase resulted from higher textiles and garments sales which
accounted for 94 per cent of the total exports as they were valued at $143.5
million compared to $107. 5 million

Exports from the engineering industries plunged by 57 per cent to $5.5
million compared to $12.5 million.

Those of veterinary medicines, fertilisers and agricultural industries also
dropped by 26 per cent to $2.7 from $3.7 million, according to the estate's
biannual report.

Electronic industries' exports went down by 20 per cent to $766,000 from
$955,000. Bags and leather products dived by 83 per cent to $310,000 from
$1.5 million.

The largest dip was posted by exports from plastic industries which fell by
89 per cent to $210,000 from $1.9 million, the report revealed.

President of the Irbid Chamber of Industry Maher Nasser said the war against
Iraq was largely behind the decline in the estate's exports that relied
heavily on the Iraqi market.

According to Nasser, industries manufacturing bags and leather products
stopped completely while that of other products depending solely on the
Iraqi market were halted for the meantime.

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