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UN: Resignation Raises Questions Over Iraqi 'Oil For Food' Program

The resignation of Hans von Sponeck, director of the UN humanitarian aid program for Iraq, raises doubts about the program's effectiveness. Iraq says the oil-for-food program is unworkable. Some Security Council members, however, say the problems are due only to corruption and a lack of cooperation from Iraq. RFE/RL correspondent Joe Lauria looks at the origins of the program and the main issues.

United Nations, 14 February 2000 (RFE/RL) -- When Martti Ahtisaari, then UN undersecretary general for humanitarian affairs, was sent by the UN to Iraq just after the 1991 Gulf War to assess the humanitarian situation there, the report he came back with shocked the Security Council.

He said the coalition's air campaign had not only liberated Kuwait, but had bombed Iraq "back to a pre-industrial state."

Ahtisaari put a stain on the allies' victory by pointing out the human costs of the war on ordinary Iraqis, with whom President George Bush often said he had no feud.

Needing to counter the situation, Britain and the United States devised a scheme whereby the Iraqi population could get some relief while maintaining a punishing oil embargo and other economic measures London and Washington insist must remain until Iraq is rid of its weapons of mass destruction.

Iraq would be allowed to sell a limited amount of oil -- the lifeblood of its economy -- but the proceeds would be seized by the UN and used solely to buy humanitarian relief, pay war reparations to Kuwait and pay for UN weapons inspectors. The inspections must be complete before the Security Council lifts sanctions imposed after Iraq's 1990 invasion of Kuwait.

Believing those sanctions would soon be lifted, Baghdad rejected this first oil-for-food plan in 1991.

Subsequent reports by UN humanitarian agencies and human rights groups kept the situation of the Iraqi people in the news. The contrast was drawn with pre-war Iraq, one of the most advanced countries in the Arab world.

The plan was revived by the Security Council in 1995 and this time the Iraqis -- seeing how difficult lifting sanctions would be -- accepted it in May 1996.

The first oil was exported in December that year and the first shipments of food arrived in March 1997. Since then, more than 10 million tons of food worth more than $4 billion and $740 million of medicine and health supplies have been delivered to Iraq.

In addition, more than a $1 billion worth of supplies for electrical, water, sanitation, agricultural, education, oil industry, human resettlements and de-mining work have arrived in Iraq. More is on the way.

Under the plan, Iraq was initially allowed to pump $2 billion worth of crude every six months. That amount was later raised to more than $5 billion. The proceeds go to a UN escrow account in a French bank in New York.

Iraq then makes requests to companies to purchase food, medicine and other supplies. These contracts are vetted by the Security Council's Iraqi Sanctions Committee to see if the purchases indeed are humanitarian in nature.

Some of the purchases have been blocked or are being held up by the council. For example, requests to purchase mountain bikes, wine glasses and liposuction equipment were deemed not essential. But most purchases that are delayed are technical or agricultural equipment the council believes could also serve a military purpose.

Distribution of the goods that are approved was a problem that was only solved after long negotiations. Iraq is permitted to distribute the goods itself -- with minimal UN monitoring -- in central and southern Iraq and by the UN itself in the mostly Kurdish north.

The program has been dogged by reports of black marketing of the goods, of rationing by the Iraqi government to provide better for the elite than for others and by smuggling, which is recently on the rise.

The U.S. Navy, which patrols the Persian Gulf, said last week that oil smuggling out of Iraq has increased with the rise in world oil prices. The problem was highlighted by the Navy's seizure of a Russian vessel last week said to be hauling 4,000 tons of Iraqi oil.

Another controversy has been upgrading Iraq's oil-drilling equipment. The UN wants the Security Council to increase money from the escrow account toward this end. The U.S. opposes the increase.

Britain and the U.S. say the oil-for-food plan has worked well except for smuggling and corrupt rationing. Washington has accused Iraqi president Saddam Hussein of hoarding goods to cause his people to suffer as a public relations ploy to get the Security Council to lift the sanctions once and for all -- Baghdad's ultimate demand.

Iraq, on the other hand, says the program is a disaster. Iraq's ambassador to the UN, Saeed Hassan, said in an interview the program is better than nothing but that "it has never worked."

Hassan says sanctions must be lifted and that spending money in Iraq under current conditions is a waste. He says the Iraqi economy needs to be restarted so that "one dollar of foreign investment there can turn into two dollars and two dollars into three."

The resignation yesterday of Hans von Sponeck, the senior United Nations humanitarian coordinator in Baghdad, underscores the fact that at least some people at the UN now agree with Iraq.

Von Sponeck, a German, was highly critical of the economic sanctions, saying they had provoked a "true human tragedy" in Iraq.

He said the oil-for-food program was not meeting the "minimum requirements" of the Iraqi people.

UN Secretary-General Kofi Annan today (Monday) accepted Von Sponeck's resignation. The two are expected to meet later this month at UN headquarters in New York. It's not clear who a successor will be.

Iraq also has supporters on the Security Council in France and Russia, both of whom are looking to win lucrative gas and oil contracts once sanctions are lifted. Russia also is owed $7 billion from Soviet-era arms sales to Iraq.