BY DOUG LORIMER
On May 9, the United States presented a draft resolution to the UN Security Council calling for the lifting of 12-year-old economic sanctions on Iraq. It would give Washington control over the Iraq's oil revenues and proposes the abolition within four months of the system of subsidised food rations upon which 60% of Iraq's 24.5 million people depended before the US-led invasion.
The resolution would lift economic and trade sanctions imposed on Saddam Hussein's government after its 1990 invasion of Kuwait, and phase out the food-for-oil program, which was instituted in 1996. Under the program, revenue from UN-approved Iraqi oil sales was used by the Iraqi government to purchase food and medicines.
Hussein's government distributed this food through a subsidised rationing system, under which Iraqis paid the equivalent of 12 US cents to collect a monthly ration of sugar, flour, rice, cooking fat, soap, detergent, milk, lentils and beans. They got their supplies from a network of 45,000 retailers.
The system was severely disrupted by the US-led invasion that began March 19-20, but not before Hussein's government had issued a six-month ration in advance in anticipation of the attack. The prices of commercially distributed food have soared by up to 50% since March 20.
"Iraqi agriculture is on the brink of collapse, with fears that many of its 24.5 million people will go hungry this summer, according to a confidential report being studied by the UN's Food and Agriculture Organisation", the May 11 British Observer reported.
"Government warehouses that would have served as the main suppliers of seeds, fertilisers and pesticide sprays have been looted, particularly in the centre and south of the country", the Observer continued. "In southern and central areas, vital irrigation networks have been destroyed, a once-thriving poultry industry has been ruined and there are predictions of disease and pestilence among both plants and animals."
The dire state of Iraqi agriculture will make the country dependent on food imports for a year or longer.
The UN World Food Program is due to resume the food rationing system in early June, with the transportation of 2.8 million tonnes of food, worth US$1.85 billion, to Iraq over the following six months. Most Iraqis who stockpiled food before the US invasion will have food until the end of May, WFP executive director James Morris told reporters on May 11.
'Occupying powers'
However, Washington is seeking a vote on its draft resolution by June 3, when the food-for-oil program comes up for renewal for a further six months. Under the US-sponsored resolution, the UN food-for-oil program and its subsidised food rationing system would be phased out over the following four months.
"Our view is that it's desirable to have this resolution passed as soon as possible, that the June 3 deadline for the expiry of the food-for-oil program is in fact very much the outer limit", US ambassador John Negroponte told reporters at the UN headquarters in New York on May 9.
The resolution envisions the US and Britain running Iraq as "occupying powers" for at least a year, and probably much longer. Under the resolution, the 12-month initial authorisation for the US and British occupation "authority" in Iraq would be renewed automatically, unless the Security Council decided otherwise. Since the US and Britain have veto powers, they could block any attempt by the council to end their occupation of Iraq.
Lifting sanctions immediately and phasing out the food-for-oil program would take Iraq's oil revenues out of the hands of the UN and put them under the direct control of Washington and London. At the moment, any country wanting to buy Iraqi oil must have UN approval and the revenue from such sales is put into a UN-controlled account.
The resolution proposes that Iraq's oil income be placed in a new "Iraq Assistance Fund" (IAF) at the Iraqi Central Bank, now managed by former US deputy treasury secretary Peter McPherson, and spent "at the direction of the authority, in consultation with the Iraqi interim authority". Some $13 billion from Iraq's past oil revenues are now in the food-for-oil program. According to the resolution, whatever is not spent in four months would be deposited into the IAF, and thus be under Washington's control.
The UN secretary-general, the International Monetary Fund and the World Bank would name representatives to an advisory board to oversee the IAF but the resolution does not say how many other people would sit on the board, nor what powers it would have. The IAF would stay in place until "a new Iraqi government is properly constituted", which could take years.
While the US ignored the opposition of the majority of the UN Security Council to launch its invasion of Iraq, Washington now needs the council's backing for its plans for a US-controlled post-war Iraq. Writing in the May 9 British Guardian, Simon Tisdall, the paper's chief foreign affairs leader writer explained why: "Having abused and abandoned the United Nations and gone to war in Iraq without UN backing in defiance of international law, the Bush administration has returned to the Security Council this week — hoping to win UN legitimacy and legal authority for its postwar plans...
"The administration needs the UN if any new US-sponsored and US-conceived government of Iraq, interim or otherwise, is to receive international recognition. This is a practical as well as symbolic matter.
"It does not matter, for example, whether the US decides Ahmad Chalabi, to pluck one name from many, is Iraq's next leader if neighbouring Arab countries and the international community as a whole do not formally accept him as such. Without such recognition, Chalabi might find himself in a position not unlike that of Rauf Denktash, the 'president' of northern Cyprus whose government is ignored by all but the Turks."
Without UN agreement, Tisdall added, Washington "cannot sensibly proceed with its ambitious plans to reorganise and expand the Iraqi oil industry, sell its product abroad and use the resulting earnings to fund reconstruction."
"The White House needs to obtain the UN's blessing if international lending institutions such as the World Bank and IMF, multinational corporations and private investors are to provide funds to the Iraqi authorities and contract with Iraqi businesses without fear of default or legal challenge."
Sharing the spoils
Seeking to protect the lucrative contracts that French companies had negotiated with Hussein's regime — the largest of which would have given the giant French-owned TotalFinaElf oil company control over 25% of Iraq's oil reserves — Paris has raised objections to the US resolution.
In a lengthy interview published in the May 12 Le Monde newspaper, French foreign minister Dominique de Villepin said the resolution was not clear enough on how revenue from Iraq's oil reserves would be exploited. "We have to establish rules for sharing oil revenues and ensuring that the management is placed under international and uncontested control", he declared.
To put pressure on Washington to include French representatives in managing Iraq's oil industry, Villepin held out the threat of Paris opposing the lifting of UN sanctions until the UN weapons inspections process is completed. "For that it would need some international certification after cooperation between [UN] inspectors and the forces on the ground", he said.
After talks in Moscow on May 14, US Secretary of State Colin Powell told reporters he failed to reach agreement with Russia's President Vladimir Putin on the lifting of UN sanctions against Iraq. Putin is insisting that UN weapons inspectors return to Iraq first.
Like the French government, Moscow wants to ensure that oil contracts that it had with Hussein's government are not abrogated by a US-installed puppet regime. Russia also wants guarantees from Washington that the debts owed to it by Iraq are honoured by any new government in Baghdad. Moscow, like Paris, is seeking to pressure Washington to cut a deal by refusing to vote for the immediate lifting of UN sanctions.
According to Associated Press, during Powell's talks in Moscow, Russia's deputy foreign minister Yuri Fedotov said his government wanted all contracts approved under the UN food-for-oil program to be fulfilled or compensated before economic sanctions were lifted. He put the value of Russian contracts at $4 billion.
To safeguard their commercial interests in Iraq, Paris and Moscow are also seeking to have a say in the construction of an Iraqi interim government via a UN-organised conference to draw up the framework for such a government. They are lobbying other Security Council members to support the idea of such a conference, despite Washington's insistence that the "occupying powers" will set the framework.
From Green Left Weekly, May 21, 2003.
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