This is CASI's version of the report of the humanitarian panel, from 30 March 1999. This web version derives from a print copy that has been scanned with character recognition software and then hand corrected. Therefore, errors may have been introduced into the text below. The original text can be viewed as pp.30-53 of scanned copies of the three panel reports in a PDF file (4.5MB). If inconsistencies are noticed between the two versions, please notify CASI.

United Nations

Annex II of
30 March  1999


Report of the second panel established pursuant to the note by the president
of the Security Council of 30 January 1999 (S/1999/100), concerning the
current humanitarian situation in Iraq



1. The panel on the current humanitarian situation in Iraq, established pursuant to the Note by the President of the Security Council of 30 January 1999 (S/1999/100), is submitting its report to the Security Council in accordance with paragraphs 1,2,3 and 5 of the aforementioned note.


I. Mandate, composition, working methods and plans of work

2. On 30 January 1999 the Security Council decided that it would be useful to establish three separate panels on Iraq and to receive recommendations from them no later than 15 April 1999. In paragraph 2 of document S/1999/100, the Security Council invited Ambassador Celso L. N. Amorim of Brazil to chair each of the panels.

3. The second panel on humanitarian issues in Iraq was constituted in the context of increasing concern, among Security Council members, over the humanitarian situation in Iraq. Its terms of reference were defined in paragraph 5 of document S/1999/100, which reads as follows: "the second panel, on humanitarian issues, would involve the participation and expertise from the Office of the Iraq Programme, the Secretariat of the Committee established by Security Council resolution 661 (1990), and the United Nations Secretariat. This panel would assess the current humanitarian situation in Iraq and make recommendations to the Security Council regarding measures to improve the humanitarian situation in Iraq".

4. As announced by the Chairman on 12 February 1999, the second panel was composed of Messrs. Staffan de Mistura, Benon Sevan, Joseph Stephanides and Sérgio Vieira de Mello. The panel met on 19, February and on 1, 2, 5, 10, 19 and 29 March. Taking into account paragraph 3 of document S/1999/100, the Chairman held consultations with panel participants and members of the Security Council on appropriate working methods and plans of work.

5. In addition to the official reports and the data made available by the Office of the Iraq Programme (OIP), the panel considered information from a variety of sources. Written submissions were received from the Food and Agriculture Organization of the United Nations (FAO), United Nations Development Programme (UNDP), United Nations Educational Scientific and Cultural Organization (UNESCO), United Nations Population Fund (UNFPA), United Nations High Commissioner for Refugees (UNHCR), United Nations Children's Fund (UNICEF), United Nations Office for Project Services (UNOPS), World Health Organization (WHO), World Food Programme (WFP), the Special Rapporteur of the UN Commission on Human Rights, the International Committee of the Red Cross (ICRC), the International Federation of Red Cross and Red Crescent Societies, the European Community Humanitarian Office and the Middle East Council of Churches. The panel heard briefings by the United Nations Humanitarian Coordinator for Iraq, Mr. Hans Von Sponeck (UNOHCI), the Special Envoy of the Secretary-General for Iraq, Mr. Prakash Shah and the Permanent Observer of the Arab League, Ambassador Hussein Hassouna as well as by Representatives of the Office for the Coordination of Humanitarian Affairs (OCHA), the Department of Economic and Social Affairs, UNDP, UNESCO, UNICEF, UNOPS, WHO, WFP and the United Nations independent oil monitors (Saybolt). Several UN agencies provided the panel with updated versions of their original submissions and UNOHCI forwarded a document with an overview on social conditions in Iraq, containing sixteen papers prepared by UN Agencies and Programmes present in Iraq dealing with topics such as the psycho-social wellbeing of children, mental health, poverty trends, the disabled, the elderly, among others.

6. Time constraints and other factors did not allow for a visit to Iraq to take place. In the view of panel members, three of whom had spent considerable time in Iraq and were therefore familiar with the local environment, this did not prevent them from fulfilling their responsibilities in accordance with the panel's mandate.


II. Analytical perspective.

7. On the basis of the Note by the President of the Security Council, the panel proceeded to evaluate the social and economic indicators of Iraq which are relevant to the humanitarian situation. The panel found that an appropriate assessment should not limit itself to presenting a static picture but should seek to identify trends. Such an exercise would involve a comparative analysis between the present situation and the one that prevailed before the events of 1990-91. In this context, it was noted that in the previous decade, the Iran-Iraq war had already taken a heavy toll on Iraqi society.

8. It was agreed that the assessment would be based on a variety of human development indicators from the most reliable sources available and also reflect, to the extent possible, a qualitative dimension of the humanitarian situation in Iraq. The panel sought to provide the Security Council with a synthesis of the information reviewed, without attempting to duplicate the work being undertaken in the context of the forthcoming assessment of the implementation of the humanitarian programme pursuant to resolution 986 (1995), to be submitted by the Secretary General by late April 1999.

9. A conceptual distinction must be drawn between deprivations which affect the coping mechanisms or the survival of a population in a given region or country as a result of natural or man made disasters - which are therefore qualified as matters of humanitarian concern - and other situations in which low social and economic indicators are treated in the framework of development assistance. In this context, it was felt that the examination of the social and economic decline of Iraq as a humanitarian issue cannot be dissociated from the cumulative impact that widespread war damage and prolonged economic sanctions have had on the Iraqi population's living conditions.

10. Data made available to the panel were considered generally reliable, as they were undersigned either by UN agencies or other credible sources. It was noted that the distribution of humanitarian supplies was being observed by hundreds of foreign humanitarian workers, with UN agencies and others having become increasingly apt at detecting distortions and exaggerations. Broadly speaking, the panel considered that the information it was provided with converged and formed a coherent picture.


III. Assessment of the humanitarian situation:
synthesis of the information reviewed.


A) Iraq before the events of 1990-91.

11. According to the information presented to the panel, at the end of the last decade Iraq's social and economic indicators were generally above the regional and developing country averages. GDP in 1989 stood at 75.5 billion for a population of 18.3 million. GDP growth had averaged 10.4% from 1974 to 1980. By 1988 GDP per capita totaled 3.510 US dollars. The concerted push for economic growth from the mid-seventies onward had benefited the country's infrastructure. As pointed out by "the Economist Intelligence Unit" (Iraq Country Profile 1998-99), even during the 1980-88 war with Iran, the road and railway network were expanded.

UNDP indicates that although power stations had been targeted by the Iranian air force during the Iran-Iraq war, in 1990 there were 126 power station units capable of generating 8.903 mw. With oil accounting for 60% of the country's GDP and 95% of foreign currency earnings, Iraq's economy was heavily dependent on the external sector and sensitive to oil price fluctuations. Such dependence on oil exports would subsequently expose Iraq to a high degree of vulnerability to sanctions. In the early 1980's Iraq had been producing as many as 3.5 million barrels per day (BPD), but that amount declined to 2.8 million by 1989.

12. Up to 1990, domestic food production represented only one third of total consumption for most essential food items, with the balance covered by imports. As highlighted by FAO, at that time Iraq had one of the highest per capita food availability indicators in the region. Dietary energy supply averaged 3.120 kilo calories per capita/per day. Due to its relative prosperity Iraq had the capacity to import large quantities of food, which met up to two thirds of its requirements at an average estimated cost of 2.5 billion US dollars a year, although in poor production years the food bill could rise to 3 billion.

13. According to WHO, prior to 1991 health care reached approximately 97% of the urban population and 78% of rural residents. The health care system was based on an extensive expanding network of health facilities linked up by reliable communications and a large fleet of service vehicles and ambulances. Health care emphasized curative aspects, but a set of active public health programmes complemented it through immunization and control of insect borne diseases. A major reduction of young child mortality took place from 1960 to 1990, with the infant mortality rate at 65 per 1.000 live births in 1989 (1991 Human Development Report average for developing countries was 76 per- 1.000 live births). UNICEF indicates that a national welfare system was in place to assist orphans or children with disabilities and support the poorest families.

14. As described by UNICEF, the Government of Iraq made sizable investments in the education sector from the mid-1970s until 1990. According to UNESCO, educational policy included provision for scholarships, research facilities and medical support for students. By 1989 the combined primary and secondary enrollment ratio stood at 75% (slightly above the average for all developing countries at 70%, according to the Human Development Report for 1991) Illiteracy had been reduced to 20% by 1987. While Iraq's indicators were inferior to that of other Arab countries such as Egypt, education accounted for over 5% of the state budget in 1989, above the developing country average of 3.8% (cf. UNDP Human Development Reports).

15. Before 1991 the South and Center of Iraq had a well developed water and sanitation system comprising over two hundred water treatment plants ("wtp's") for urban areas and 1200 compact wtp's to serve rural areas, as well as an extensive distribution network. WHO estimates that 90% of the population had access to an abundant quantity of safe drinking water. There were modern mechanical means of collection and sanitary disposal.

16. The brutal campaign waged by the Iraqi Government against the Kurdish rebels in the North, had constituted the main issue of humanitarian concern in Iraq prior to the events of 1990-91. Aspirations among the Kurdish population of Northern Iraq for autonomy had already resulted in periods of open revolt in 1960-75 and 1983-88. Landmines had been used as early as 1965. According to figures provided by UNOPS, the conflict and the forced depopulation of over 4.800 rural villages and the subsequent mining of a majority of the villages or their surroundings resulted in a known mined area which would come to reach over 212 square kilometers in the 1990's, with casualty rates of 4-10 injured or killed per month.

B) Aftermath of the Gulf War.

17. After the Gulf War and under the effect of sanctions it is estimated that Iraq's GDP may have fallen by nearly two-thirds in 1991, owing to an 85% decline in oil production and the devastation of the industrial and services sectors of the economy (source: "the Economist country profile 1998-99"). Agricultural growth has since been erratic and manufacturing output has all but vanished (same source). According to figures provided by UNFPA per capita income fell from 3.416 US dollars in 1984 to 1,500 in 1991 and has decreased to less than 1.036 in 1998. Other sources estimate a decrease in per capita GDP to as low as 450 US dollars in 1995 (Financial Times, September 11 1995).

18. As mentioned by UNFPA, the maternal mortality rate increased from 50/100.000 live births in 1989 to 117/100.000 in 1997. The under-five child mortality rate increased from 30.2/1000 live births to 97.2/1000 during the same period. Although figures for infant deaths are based on estimates that may involve a margin of error, the trend is one of sharp increases. The Population Division of DESA calculates that the infant mortality rate rose from 64/1.000 births in 1990 to 129/1.000 in 1995 (the latest Human Development Report sets the average infant mortality rate for Least Developed Countries at 109/1.000). Low birth weight babies (less than 2.5 kg) rose from 4% in 1990 to around a quarter of registered births in 1997, due mainly to maternal malnutrition. UNFPA and other sources such as the International Federation of the Red Cross and Red Crescent Societies believe that as many as 70% of Iraqi women are suffering from anemia.

19. The dietary energy supply had fallen from 3.120 to 1.093 kilo calories per capita/per day by 1994-95. The prevalence of malnutrition in Iraqi children under five almost doubled from 1991 to 1996 (from 12% to 23%). Acute malnutrition in Center/South rose from 3% to 11% for the same age bracket. Results of a nutritional status survey conducted on 15.000 children under 5 years of age in April 1997 indicated that almost the whole young child population was affected by a shift in their nutritional status towards malnutrition (Nutritional Status Survey of Infants in Iraq, UNICEF November 7 1998). WFP indicates that according to estimates for July 1995, average shop prices of essential commodities stood at 850 times the July 1990 level.

20. In addition to the scarcity of resources, malnutrition problems also seem to stem from the massive deterioration in basic infrastructure, in particular in the water-supply and waste disposal systems. The most vulnerable groups have been the hardest hit, especially children under five years of age who are being exposed to unhygienic conditions, particularly in urban centers. The WFP estimates that access to potable water is currently 50% of the 1990 level in urban areas and only 33% in rural areas. The absence of basic health education is leading to inappropriate infant and child care and breastfeeding practices. One briefing pointed to the Government's responsibility in the promotion of an ill-advised decline in breastfeeding.

21. Since 1991, hospitals and health centers have remained without repair and maintenance. The functional capacity of the health care system has degraded further by shortages of water and power supply, lack of transportation and the collapse of the telecommunications system. Communicable diseases, such as water borne diseases and malaria, which had been under control, came back as an epidemic in 1993 and have now become part of the endemic pattern of the precarious health situation, according to WHO.

22. School enrollment for all ages (6-23) has declined to 53%. According to a field survey conducted in 1993, as quoted by UNESCO, in Central and Southern governorates 83% of school buildings needed rehabilitation, with 8.613 out of 10.334 schools having suffered serious damages. The same source indicated that some schools with a planned capacity of 700 pupils actually have 4500 enrolled in them. Substantive progress in reducing adult and female illiteracy has ceased and regressed to mid-1980 levels, according to UNICEF. The rising number of street children and children who work can be explained, in part, as a result of increasing rates of school drop-outs and repetition, as more families are forced to rely on children to secure household incomes. Figures provided by UNESCO indicate that drop-outs in elementary schools increased from 95.692 in 1990 to 131.658 in 1999.

23. The accelerating decline of the power sector has had acute consequences for the humanitarian situation. The total remaining installed capacity today is about 7.500 mw, but inadequate maintenance and poor operating conditions have reduced the power actually generated to about half that figure at 3.500 mw. UNDP analysis points out that aging equipment and the continuing effects of war damage have caused deterioration at nearly every level. In spite of a general decline in economic activity, demand currently exceeds supply by at least 1.000 mw, particularly during the peak summer load. Power shortages have consequently worsened to up to 6 hours a day since July 1998.

24. The shortage of electricity has been particularly visible in some parts of the Northern region, where this failure has adversely affected the water supply and health services. Two hydropower stations at Dokan and Derbendikhan, which together have a 649 mw capacity, constitute the only source of power for the Northern governorates. Military hostilities have taken a toll on the transmission system on a countrywide basis. The distribution system has also deteriorated due to poor maintenance and overloading. Almost all automatic control, most remote control and many of the protection devices are malfunctioning.

C) The qualitative dimension.

25. Along with the quantitative input provided by many of the written submissions and oral briefings, other considerations were presented to the panel regarding the cumulative effects of sustained deprivation on the psycho-social cohesion of the Iraqi population. While this information was not necessarily presented in a systematic way, the following aspects were frequently mentioned: increase in juvenile delinquency, begging and prostitution, anxiety about the future and lack of motivation, a rising sense of isolation bred by absence of contact with the outside world, the development of a parallel economy replete with profiteering and criminality, cultural and scientific impoverishment, disruption of family life. WHO points out that the number of mental health patients attending health facilities rose by 157% from 1990 to 1998 (from 197.000 to 507.000 persons).

26. The cumulative effect of the sanctions regime and economic decline on the social fabric of Iraq was particularly evident to the first hand observers who addressed the panel either orally or in writing. While WHO mentioned the extreme isolation of the Iraqi scientific community and its outdated expertise, the ICRC observed that medical training is no longer guaranteed and skills are being lost. UNICEF spoke of a whole generation of Iraqis who are growing up disconnected from the rest of the world. UNESCO commented that children between 5 and 15 years of age were the most affected. According to the Humanitarian Coordinator in Iraq, unemployment and low salaries were forcing Iraqis with higher levels of education to abandon jobs as teachers or doctors and to either emigrate or search for employment as taxi drivers or security guards etc. adding to the problems in the areas of health and education.

27. The dependence of the Iraqi population on humanitarian supplies had increased Government control over individual lives to the detriment of personal initiative and self-reliance. Constraints on the performance of the Hadj, added to the sense of frustration, particularly in a context of growing religious fervor, possibly associated with the material deprivations and lack of opportunity of the present situation. The deterioration in Iraq's cultural life and institutions was also noted.

D) The humanitarian Programme established by resolution 986 (1995).

28. In April of 1995 the Security Council adopted resolution 986, which was intended "as a temporary measure to provide for the humanitarian needs of the Iraqi people until the fulfillment by Iraq of the relevant Security Council resolutions". This initiative came to be known as the "oil for food" programme. It took one year for the Government of Iraq to agree to the implementation of the programme. The humanitarian programme established by resolution 986 (1995) is totally financed from revenue generated by the sale of Iraqi oil, and in that sense does not constitute humanitarian aid, such as the assistance which is financed bilaterally or multilaterally. Upon recommendation by the Secretary-General, Security Council Resolution 1153 (1998), adopted in February 1998, raised the authorized ceiling for Iraqi oil sales from 2 billion up to 5.2 billion US dollars for each 180 day period, out of which approximately 3.4 billion would be made available to the humanitarian programme, after deductions pursuant to the relevant provisions of paragraph 8 of resolution 986 (1995). In addressing the impact of the humanitarian programme pursuant to resolution 986 (1995) on the Iraqi population, the panel wished to clarify that its views do not attempt to summarize, evaluate and much less substitute for the regular reporting by the Secretary-General on the subject.

29. The adoption of the "oil for food" programme has played an important role in averting major food shortages in Iraq and to a considerable extent has helped to alleviate the health situation, especially in the North. Since the inception of the programme, the extent of malnutrition seems to have stabilized in the more populous Center/South, albeit at an insufficient caloric level, while in the Northern governorates the situation has actually improved somewhat. Under Phase V of that programme food imports account for 1.05 billion US dollars (out of a total of 1.79 billion available for all humanitarian supplies). The objective of providing the population with a basic caloric food basket of 2.300 kilo-calories/per person/ per day, is yet to be met, with the current intake closer to a level of 2.030 kilo-calories, according to the WFP. Prior to the start of the implementation of the programme, the average kilo-calorie intake had fallen to approximately 1.300. The differential reduction in the North is due in part to higher per capita allocations of the 986 programme, especially in agriculture, water and sanitation and education. Several UN agencies as well as the Humanitarian Coordinator in Iraq pointed to the fact that the unavailability of a cash component for the South further exacerbates these disparities.

30. Results of a nutritional status survey of infants attending routine immunization sessions at primary health centers throughout Central and Southern Iraq conducted in October 1997, and again one year later, reveal little change in the nutritional status since the beginning of the programme established by Security Council resolution 986 (Nutritional Status Survey at Primary Health Centers during Polio National Immunization Days in Iraq, UNICEF November 7, 1998). According to the FAO, the survey showed signs that infant feeding patterns may have deteriorated, and that children and younger male adults remained subject to significant levels of malnutrition. As mentioned by WFP, the introduction of the 986 food ration in 1997 led to a decrease in prices of food items found in the ration. Prices of non-ration food items such as meat and eggs, however, remain prohibitively high.

31. The collapse of the irrigation system and the introduction of the oil-for-food programme have prompted the Government to withdraw from agriculture (the Economist Intelligence Unit, country profile Iraq, 1998-99). A recent outbreak of foot and mouth disease reported by the Department of Animal Health is assumed to have affected approximately one million cattle and sheep and is causing high mortality among offspring. Iraqi allegations that the laboratory producing the vaccine was forced to halt its activities when the United Nations Special Commission (UNSCOM) destroyed its equipment are contested by the Commission. FAO points out that even if sufficient vaccines could be made available, which is unlikely, trucks and cold storage units are also required to contain the spread of the disease.

Moreover, as indicated by FAO, the provision of pesticides and herbicides through the programme remains limited, at less than 10% of the needs. By contrast, in Northern Iraq the Security Council 986 programme had a more positive impact, even if the free distribution of wheat flour has negatively affected the local wheat growers by depressing prices.

32. The flow of medicines and medical supplies under Security Council resolution 986 as from May 1997 increased availability of such supplies to health institutions and people. As a result the quality of health has improved somewhat, but the insufficiency of funds has not allowed for significant improvement in the environment in which health care is provided nor has there been a renewal of basic equipment. Preventive activities are suffering from lack of communication and transport. The environmental risks of water borne communicable diseases, primarily diarrhea, but also malaria and leishmaniasis continue to be of great concern. There is a continuing threat of typhoid and cholera outbreaks. Central warehouses and warehouses in the Northern Governorates have deteriorated over time, and lack handling equipment and the minimum required tools for effective management of large quantities of supplies. A recent study quoted by WHO indicates that the central warehouses are operating at less than 20% of previous capacity.

33. In the Northern governorates the availability of equipment, trained staff as well as drugs and supplies have contributed to substantially increase patient attendance. There seems to be a decline in some infectious diseases such as measles and better control over polio, although documentation is only tentative due to lack of records for preceding years. Water and sanitation have also improved in the North, with renovated as well as new systems established under the "oil for food" program.

34. According to UNDP, there has been a slight recovery of the Iraqi power generating capacity in 1997 and 1998, which seems to reflect the results of the implementation of the 986 programme. However it was estimated that 7 billion US dollars would be required to rehabilitate the power system country-wide.

35. In the field of de-mining, UNOPS has been able to deal with 2.459 patients and to clear 362.249 square meters by destroying 2.263 mines and unexploded ordnance. General problems persist, however, in the form of delays and other difficulties in the importation of equipment, a degree of indifference of the authorities toward the mine problem and a lack of a central mines action body at local and national Government level. Although there are reports of humanitarian problems deriving from the presence of mines in parts of Iraq not covered by the UNOPS programme, so far the Government has not shown an inclination to request assistance for de-mining efforts in other regions.

36. Certain reports call attention to the fact that rural areas have been suffering more acutely from insufficiencies of unpolluted water supplies. Concern has been expressed among others by the Secretary-General and by the Special Rapporteur on Iraq of the Human Rights Commission over the slow pace of distribution of medicines and medical supplies by the Government. As of 31 January 1999, approximately 275 million US dollars worth of medicines and medical supplies had accumulated in warehouses, awaiting distribution by the Government.

37. While there is agreement that the Government could do more to make the "oil for food" programme work in a better and more timely fashion, it was not clear to what extent the problems encountered could be attributed to deliberate action or inaction on the part of the Iraqi Government. It is generally recognized that certain sectors such as electricity work smoothly while drug supplies suffer from delays in distribution. But mismanagement, funding shortages (absence of the so called "cash component") and a general lack of motivation might also explain such delays. While food and medicine had been explicitly exempted by Security Council resolution 661, controls imposed by resolution 986 had, at times, created obstacles to their timely supply.

38. It was noted that recent power cuts, which can last up to 10 hours a day, have been affecting humanitarian efforts in general, while the security situation has imposed additional constraints on the activities of humanitarian workers. The ICRC, which remained present in Baghdad and pursued its normal activities during the December 1998 air strikes, stepped up its support for treating the war wounded (over 200 casualties were seen by its delegates) and assisted with repairs to a hospital which suffered blast damage when three missiles fell nearby. Emergency assistance was also provided by the ICRC in the region of Basrah at the end of January 1999, when missiles hit areas inhabited by civilians.

39. Information reviewed by the panel indicated that while the humanitarian programme established by resolution 986 had clearly contributed to prevent a steadier decline in certain indicators than would have otherwise been the case, particularly in terms of nutrition, written submissions and oral presentations to the panel converged in recognizing the inherent limitations of such efforts in the medium term. The WFP considers that food imports alone could not address the problem of malnutrition in the absence of a drive to rehabilitate the infrastructure, especially as regards health care and water/sanitation.

40. Although Iraq is exporting more oil than ever since 1991, revenue remained insufficient due to a negative correlation linking low oil prices, delays in obtaining spare parts for the oil industry and general obsolescence of oil infrastructure. As has been pointed out by the 011), the present ceiling of 5.2 billion US dollars is not being met, with exports generating a maximum of 3.1 billion dollars. The oil price question could not be ignored, as every extra barrel of oil pumped by Iraq exerted downward pressure on the world price. The spare parts needed were out of date and hard to acquire, and imports would probably not allow Iraq to increase its present production of 2.5 million BPD before March 2000. Moreover, the current strategy of squeezing maximum production out of the existing facilities would not ensure a sustainable increase in financial returns, while posing serious environmental and worker hazards and causing additional infra-structure damage.

41. According to the United Nations independent oil monitors (Saybolt), by March 2000 sufficient spare parts will have arrived to increase Iraq's output somewhat. In their opinion, however, further increases in production would require capital investment of a much greater magnitude than was possible under the "oil for food" initiative. It is estimated that it would take approximately 1.2 billion US dollars to ensure a gradual and sustainable increase in the production of crude oil in Iraq so as to allow for production levels to reach 3.000.000 BPD (see the Report of the Group of Experts established pursuant to paragraph 12 of Security Council resolution 1153 (1998). The full rehabilitation of Iraq's oil industry, however, would require several billion dollars, as pointed out by the Saybolt representative to the panel.

42. It was acknowledged that factors independent from the effectiveness of the humanitarian efforts to assist the Iraqi population could help to improve the situation, such as a sustained rise in international oil price levels. However, in order for Iraq to aspire to social and economic indicators comparable to the ones reached at the beginning of the decade humanitarian efforts of the kind envisaged under the "oil for food" system alone would not suffice and massive investment would be required in a number of key sectors, including oil, energy, agriculture and sanitation. Finally, it was pointed out that if and when sanctions are lifted, it will take a long time before the. infrastructure is repaired and the economy recovers.


IV. Observations and recommendations.


43. The data provided to the panel point to a continuing degradation of the Iraqi economy with an acute deterioration in the living conditions of the Iraqi population and severe strains on its social fabric. As summarized by the UNDP field office, ""the country has experienced a shift from relative affluence to massive poverty". In marked contrast to the prevailing situation prior to the events of 1990-91, the infant mortality rates in Iraq today are among the highest in the world, low infant birth weight affects at least 23% of all births, chronic malnutrition affects every fourth child under five years of age, only 41% of the population have regular access to clean water, 83% of all schools need substantial repairs. The ICRC states that the Iraqi health-care system is today in a decrepit state. UNDP calculates that it would take 7 billion US dollars to rehabilitate the power sector country-wide to its 1990 capacity.

44. The North of Iraq is clearly doing better than the Center/South for a variety of reasons. The per capita allocation of funds under the 986 programme is higher, distribution of food and medicine through UN agencies is comparatively more efficient than distribution by the Government, and the Northern border is more permeable to embargoed commodities than the rest of the country. At the same time, it is noted that the number of internally displaced persons in need of assistance in the North remains high, at approximately 500.000, compared with 80.000 in the Center/South. Although the historic vulnerability of the North, as recognized in paragraph 8 (b) of resolution 986 (1995) would seem to justify the special attention it receives, it is a matter of concern that the situation in the Center/South is, in general terms, comparatively worse - a circumstance which most UN agencies felt should not be overlooked. It was also noted, in this context, that the territorial integrity and sovereignty of Iraq has been consistently upheld by Security Council resolutions.

45. Although Member States should not shun their collective responsibility in the face of acute Iraqi humanitarian needs, this does not exempt the Government of Iraq from its own responsibilities in providing relief to its citizens, given its unsatisfactory performance in certain areas - as noted in Section III of this report - nor can Iraq's original responsibility for the current situation be ignored. At the same time, it is the panel's view that, under current conditions the humanitarian outlook will remain bleak and become more serious with time. Even if not all suffering in Iraq can be imputed to external factors, especially sanctions, the Iraqi people would not be undergoing such deprivations in the absence of the prolonged measures imposed by the Security Council and the effects of war.

46. Due to a substantial shortfall in revenue for the implementation of approved distribution plans, the "oil for food" humanitarian programme established by the Security Council has not been able to achieve fully its objectives. But even if all humanitarian supplies were provided in a timely manner, the humanitarian programme implemented pursuant to resolution 986 (1995) can admittedly only meet but a small fraction of the priority needs of the Iraqi people. Regardless of the improvements that might be brought about in the implementation of the current humanitarian programme - in terms of approval procedures, better performance by the Iraqi Government, or funding levels - the magnitude of the humanitarian needs is such that they cannot be met within the context of the parameters set forth in resolution 986 (1995) and succeeding resolutions, in particular resolution 1153 (1998). Nor was the programme intended to meet all the needs of the Iraqi people.

47. Given the present state of the infrastructure, the revenue required for its rehabilitation is far above the funding level available under the 986 programme. In light of the near absolute dependence of Iraq on oil exports to generate foreign exchange, the precarious state of the oil industry infrastructure, if allowed to deteriorate further, will have disastrous effects on the country's ability to cover the costs for basic humanitarian needs. Irrespective of sanctions, low oil prices remain an important constraint on the availability of funds, further underscoring the importance of exploring alternative sources of funding. Although the full impact of the recent decision of oil producing countries to reduce output could not be factored into this report and would warrant further analysis, it is noted by the panel that current trends, which point to a gradual increase in oil prices, could benefit the implementation of the programme.

48. The fact that basic humanitarian needs are being met through hand-outs does not contribute to stimulate the economy and has an indirect negative impact on agriculture, while increasing State control over a population whose private initiative is already under severe constraints of an internal and external nature.

49. The gravity of the humanitarian situation of the Iraqi people is indisputable and cannot be overstated. Irrespective of alleged attempts by the Iraq authorities to exaggerate the significance of certain facts for political propaganda purposes, the data from different sources as well as qualitative assessments of bona fide observers and sheer common sense analysis of economic variables converge and corroborate this evaluation.

50. However, the panel remained fully cognizant of the fact that it is up to the Security Council to decide whether the economic sanctions imposed on Iraq should be maintained, modified or lifted in light of other interrelated aspects and broader political considerations that were beyond its mandate.

51. Having in mind these limitations, the panel is proposing several recommendations it believes may lead to incremental improvements. Some of these could be contemplated within the existing framework of Security Council resolutions and legal arrangements, while others might require adjustments in the present legal framework, without departing from its basic philosophy.

52. The panel wishes to call attention to a number of specific suggestions for improvements in the implementation of the humanitarian programme pursuant to resolution 986 (1995) from different UN agencies and programmes, especially with regard to nutrition, health and education. The panel recommends that these suggestions, as well as others forwarded through the UNOHCI on the social overview be borne in mind by the OIP in the context of its ongoing efforts to improve the "'oil for food" initiative, within the mandate it was given by the Security Council.

53. Particular attention should be given to the following set of suggestions which are presented as recommendations for consideration by the Security Council, on the one hand, and recommendations addressed to the Government of Iraq, on the other.

A) Additional revenue.

54. The question of securing additional funding to finance humanitarian efforts is of paramount importance, as virtually all submissions to the panel underlined the insufficiency of present levels of revenue to deal with pressing humanitarian needs. Having acknowledged the link between the gradual deterioration, of the humanitarian situation and the degradation of Iraq's oil production facilities, as well as the deterioration in basic infrastructure in health/sanitation and power generation, among other sectors, the panel proposes that the Security Council consider a combination of the following measures.

(i) Notwithstanding the current situation of the oil industry, as indicated in paragraphs 41-42 above, the panel recommends lifting the ceiling of allowable oil exports from Iraq and facilitating the speedy provision of the necessary spare parts to enable Iraq to increase its export capacity, on the understanding that the United Nations would continue to closely monitor all oil export outlets at Mina al-Bakr and Zackho on the Iraq-Turkey border as well as at Ceyhan, Turkey. Since it is recognized that the lifting of the ceiling in itself would have no automatic impact on the generation of additional revenue, it is suggested that this measure be coupled with one or both of the two following recommendations.

(ii) Authorizing bilateral production sharing agreements between the Government of Iraq and foreign oil companies. Under such arrangements - which would be strictly monitored by the United Nations - foreign companies would be authorized by the Security Council Committee established pursuant to resolution 661 (1990) to import requisite oil spare parts and equipment in order to increase Iraq's oil production and export capacity. With foreign companies supplying maintenance and related equipment as part of their production sharing agreement, up to 300 million US dollars could be freed for the acquisition of humanitarian supplies, out of the funds earmarked for oil spare parts through the "oil for food" programme. Unless the Security Council takes different decisions based on other policy considerations, revenue generated through such bilateral arrangements would go to the United Nations Iraq Account. Foreign Companies would be required to report to the Security Council Committee on the implementation of their contractual obligations.

(iii) As an additional measure, the Security Council may consider authorizing private investment flows into the oil industry and other secondary export industries unrelated to the military complex (fertilizer, sulfur, urea, dates, nuts etc), as well as into agriculture, on the understanding that strict international controls would be maintained over financial resources obtained through exports under the escrow account, and that a strict arms embargo and control over dual use items would remain in place. In this context, foreign companies could assume other responsibilities that might positively impact on the humanitarian situation, particularly in terms of reconstruction and infrastructure rehabilitation.

(iv) The Security Council might examine ways and means to bring petroleum and other oil products presently exported outside the humanitarian programme established pursuant to resolution 986 (1995) into the framework of the programme.

(v) The international community should be encouraged to provide supplementary funding for humanitarian efforts in Iraq, both within the context of the "oil for food" programme and outside its parameters, either bilaterally or through multilateral organizations as well as international non-Govern mental organizations. Such funding could be channeled through UN agencies to support such initiatives as the parallel intervention by the WFP to provide special assistance, in addition to efforts carried out under resolution 986 (1995).

(vi) Notwithstanding the provisions of paragraph 8 (C) of resolution 986 (1995) to transfer to the United Nations Compensation Fund the same percentage of funds deposited in the escrow account as that decided by the Council in paragraph 2 or resolution 705 (1991) of 15 August 1991, the Security Council could authorize - possibly as a temporary measure - reducing by an agreed percentage the revenue allocated to the United Nations Compensation Commission or borrowing from the Compensation fund up to a level to be determined by the Council, in order to increase the amount of revenue available for the purchase of urgently needed humanitarian supplies. Claims from individuals would be given priority whereas Governments and institutions would agree to the deferral of payments for their own claims.

(vii) In order to increase the amount of revenue available for the purchase of humanitarian supplies to Iraq, the Security Council may wish to suspend, as a temporary measure, the implementation of paragraph 8 (g) of resolution 986 (1995) which provides for the transfer of up to 10 Million US dollars every 90 days from the escrow account established by the above resolution to the escrow account provided for in resolution 706 (1991) and 712 (1991) for the purpose envisaged in paragraph 6 of resolution 778 (1992).

(viii) At the request of States holding frozen Iraqi assets, the Security Council may authorize the release of such assets to the 986 escrow account or another agreed upon mechanism in order to fund the procurement of urgently needed humanitarian supplies.

(ix) The Secretary-General could be requested to ensure that every effort be made to minimize actual costs of the United Nations activities associated with the implementation of resolution 986 (1995) for which deductions are provided for pursuant to paragraph 8 (D) of that resolution, in order to maximize the availability of revenue for the purchase of urgently needed humanitarian supplies.

(x) As a confidence building measure, it is recommended that Iraq be furnished by the UN with a daily statement of the status of the escrow account.

B) Supply of humanitarian goods.

55. In line with paragraph 16 of the Note by the President of the Security Council on the Work of the Sanctions Committees of 29 January 1999 (document S/1999/92), and in response to concerns expressed by several other presentations, the panel proposes the approach outlined below.

(i) Pre-approved humanitarian supplies.

Foodstuffs, pharmaceuticals and medical supplies, as well as basic or standard medical and agricultural equipment and basic or standard educational items included in a list of exempted humanitarian supplies, pre-approved by the 661 Committee, on the basis of a proposal from the Office of the Iraq Programme (OIP), should be contracted and procured directly by the Government of Iraq without any requirement for approval or notification to the 661 Committee. The exporting State should notify the OIP of the goods to be exported, the agreed price, as well as the estimated time of arrival of the goods in Iraq. Payment from the escrow account would be authorized by the United Nations Controller after receipt of confirmation of the arrival of the goods in Iraq from the independent inspection agents stationed at the agreed entry points.

(ii) Other supplies.

Goods not included in the pre-approved list of humanitarian supplies that are not dual use items should be authorized by the 661 committee within two business days, upon receipt of a request from the exporting State, containing a description of the goods to be exported and the agreed price, as well as the estimated time of arrival.

(iii) Dual-use items.

Dual-use items should be processed under the Export/Import Mechanism as per Security Council resolution 1051 (1996). The requests for the supply of such items, along with the evaluation and comments as per the aforementioned resolution, should be submitted to the 661 Committee for approval under the no-objection procedure.

C) Other recommendations

56. (1) Under the relevant Security Council resolutions the Government of Iraq may not have direct or indirect access to revenue raised under resolution 986 (1995). This limitation is seriously impeding the distribution of some humanitarian supplies, especially in the Center/South. Given this situation, which was raised by several presentations to the panel, the Security Council should consider the establishment of a "cash component" for the Center/South on the basis of plans submitted by Iraq and approved and monitored by the OIP. Respect for the legitimate national sovereignty and dignity concerns of Iraq should be ensured in the negotiation of any appropriate arrangement.

(ii) The panel notes that imported food and grain should supplement rather than substitute local produce. "Oil for food" resources should be used to procure food locally if and when available, thus stimulating local production. This will not only contribute to keep farmers active instead of turning them into aid-dependent consumers, but also free additional resources for other necessary humanitarian supplies. It is recommended that a joint assessment be conducted by the UN and concerned Iraqi authorities to establish the scale of the issue and ident1tv remedial measures.

(iii) Relevant contracts arrived at in the context of the "oil for food programme might include a clause for installation and training services to be provided by the supplier or other parties, utilizing Iraqi labor and expertise to the maximum extent possible.

(iv) A time-limit clause could be introduced into all "oil for food" contracts so as to provide an incentive for early delivery of goods and help clear blocked resources in the escrow account.

(v) International organizations and NGO's should be encouraged to provide published material of an educational character to Iraq. Greater access to the international media and to imported publications in general should be promoted. Additional measures aimed at reducing the isolation of Iraqi educators, health care providers, students and others - including, possibly, civilian air traffic for the promotion of cultural and intellectual exchanges - should also be considered. Specialized UN agencies and programmes could be requested to identify measures destined to improve the situation of Iraqi youth.

(vi) In line with paragraph 17 of the aforementioned Note by the President of the Security Council (document S/1999/92), solutions should be sought to ensure that exemptions to the sanctions regime on religious grounds be made effective.

D) Recommendations to the Government of Iraq.

57. It is clear that improvements in the humanitarian situation require the full cooperation of the government of Iraq. In this regard, the panel makes the following recommendations.

(i) The Government of Iraq should do its utmost to ensure the timely distribution of humanitarian goods, in particular medical supplies, and clear existing and unjustifiable bottlenecks at its warehouses.

(ii) The Government of Iraq should address effectively the needs of vulnerable groups in the Center/South, especially those of street children, the disabled, the elderly and the mentally ill, among others, and allow freer access to UN agencies and recognizably impartial and bona fide NGOs to restricted areas and sections of populations for adequate evaluation of their nutritional and general humanitarian condition.

(iii) The Government of Iraq should refine their list of priorities in terms of packaging contracts through the humanitarian programme established pursuant to resolution 986 (1995).

(iv) The Government of Iraq should ensure that those involuntarily displaced receive adequate humanitarian assistance, without having to demonstrate that they have resided for six months in their places of temporary residence.

(v)The Iraqi Government should extend full cooperation to the mine-clearance programme in the North (e.g. through provision of mine-field maps, expeditious transit of equipment et c.) facilitating the work of UNOPS, and consider the initiation of de-mining efforts in other areas of the country.

58. In presenting the above recommendations to the Security Council, the panel reiterates its understanding that the humanitarian situation in Iraq will continue to be a dire one in the absence of a sustained revival of the Iraqi economy, which in turn cannot be achieved solely through remedial humanitarian efforts.