09 April 2002
Iraq's Suspension of Oil Exports Hurts Humanitarian Program
(U.N. concerned about ability to help Iraqi civilians) (500)
By Judy Aita
Washington File United Nations Correspondent
United Nations -- Iraq's decision to suspend crude exports will
seriously jeopardize the U.N. administered oil-for-food program, which
provides food, medicine, and other humanitarian supplies for Iraqi
civilians, the U.N. said April 9.
The amount available over the next six weeks will be cut by $1,000
million, the U.N. said.
Under the revised oil-for-food program, Iraq can sell an unlimited
amount of oil under U.N. supervision. The proceeds are to be used to
buy food, medicine and other humanitarian supplies to ease the effects
of sanctions for Iraqi civilians. Iraq has also been allowed to spend
$600 million for spare parts to upgrade its oil industry, which is in
disrepair after 10 years of sanctions. The program was set up after
the Gulf War to help Iraqi civilians affected by U.N. sanctions and
modified in 2000.
Iraqi oil authorities advised U.N. oil monitors on April 8 that
Baghdad had issued instructions to suspend production. According to
the Iraqi News Agency, no oil will be lifted for 30 days or until
Israeli armed forces have unconditionally withdrawn from the
Palestinian territories.
"We are concerned. As we've been saying, there is already a funding
crisis so this will not help," said Hasmik Egian, a spokesperson for
the oil-for-food program.
The distribution plan for the current six-month phase of the program,
which ends May 29, budgeted $4,600 million dollars for the
humanitarian fund. As of April 8 the total volume of oil loaded was
202.8 million barrels with an estimated revenue of $3,900 million at
current prices, the U.N. said.
Before Iraq suspended oil exports, program was already facing
increasing financial difficulties, the U.N. said. The oil-for-food
program had estimated that the oil revenue for the humanitarian
program would be $4,000 million, leaving a shortfall of $600 million.
Then on April 9 the U.N. estimated that Iraq's decision to stop
exports would leave only $3,000 million to buy needed supplies,
increasing the shortfall to $1,600 million.
Under the terms of the program, 72 percent of Iraq's crude revenue is
allocated to the oil-for-food program. Another 25 percent goes to the
U.N. Compensation Commission, which pays claims for damages arising
from Iraq's invasion and occupation of Kuwait. The remaining revenue
pays costs of administering the program and the U.N. Monitoring and
Inspection Commission (UNMOVIC).
"As of April 8, there were 824 approved applications from previous
phases with a total value of just under $2,000 million, for which
funds were not available," the spokesman said. "Accordingly, the
cumulative estimated shortfall in funds for the purchase of
humanitarian supplies under the program is $3,600 million."
Another $1.8 million still available in the U.N. Iraq account has been
put aside for the purchase of oil spare parts and humanitarian
supplies under a special allocation aimed at addressing the needs of
especially vulnerable groups, the U.N. said.
(The Washington File is a product of the Office of International
Information Programs, U.S. Department of State. Web site:
http://usinfo.state.gov)
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