19 November 2002
U.N. Expected to Renew Iraq Humanitarian Aid Program
(Oil-for-Food Program has serious funding problems) (910) By Judy Aita Washington File Staff Writer United Nations -- The Security Council is expected to extend the U.N. humanitarian program for Iraq, known as the oil-for -food program, for another six months, diplomats said November 19. After a two-hour private meeting with the program's executive director, Benon Sevan, diplomats said that the program likely would be continued without major changes before phase 12 of the program expires on November 25. The 15-member Security Council was "very supportive of the program," Sevan told journalists outside the council's chamber. "We expect the program to be extended for another six months." "While all attention is focused on the return of the inspectors to Iraq, we should also provide equal focus in the direction of the humanitarian needs of the Iraqi people," Sevan added. Asked if the U.N. had plans for providing aid to Iraq should the weapons inspections fail, Sevan said that the United Nations has contingency plans for any country in which it operates. But "we are concentrating on the return of the inspectors and the implementation of the humanitarian program and, therefore, we are not talking about the possibility of war," he said. The oil-for-food program was set up by the council to ease the impact on Iraqi civilians of economic sanctions imposed on Iraq after the 1990 invasion of Kuwait. Iraq accepted the plan in 1996. Under the plan, Iraq was allowed to sell $2,000 million worth oil every six months, with two-thirds of the money to be used to buy humanitarian supplies under U.N. supervision. In December 1999, the ceiling on Iraqi oil exports was lifted, allowing Iraq to sell unlimited quantities of oil to fund the program. The Security Council also streamlined the procedure for approving civilian goods for ordinary Iraqis. The council still has strict oversight on Iraqi purchases of items that have military applications. Currently, 72 percent of the revenues go to the humanitarian program, 25 percent to the compensation fund for war reparation, and 2.2 percent for U.N. administrative costs. Less than 1 percent is used to fund the weapons inspection program (U.N. Monitoring, Verification and Inspection Commission). About 80 percent of humanitarian funds are used by Iraq to buy supplies and equipment for the central and southern governorates. The remaining 20 percent is used for the Kurdish governorates in the north where the program is administered by the U.N. The program has "serious funding problems," Sevan said. "We have $3 billion worth of contracts for which we have no money. These are contracts which have been approved," he said. Compounding the problem will be an anticipated shortfall of about $1.5 billion in the current six-month phase. The main reason for the shortfall is the "substantial reduction in Iraqi oil exported under the program," according to a report from Secretary General Kofi Annan to the Security Council. "The level of oil exports has dropped from an average of over 2 million barrels a day in 2000 to under 1 million barrels in recent months," Annan said. Iraq has budgeted over $5 billion for humanitarian supplies during the current six-month phase, which ends in November, he continued. To make enough money to cover the amount of goods needed, Iraq would have to export about $7 billion worth of oil by November 25. "By the most conservative assessment, some $4 billion has been lost due to the low level of exports during phase 12," the secretary general said. Annan blamed the drop in Iraqi oil exports on Iraq's unilateral suspension of exports, the lack of an agreement between Iraq and the Security Council on the way prices are set, and concerns by traders over the reliability of the Iraqi supply. "Iraq's periodic unilateral suspension of its oil exports, such as its suspension for 30 days during the previous phase ... resulted in over $1.2 billion in lost revenue," he said. The secretary general also urged Iraq and the Security Council to resolve the disagreement over the oil pricing. Unless the shortfall is addressed, many of the program's achievements will be compromised, leading to a worsening of the humanitarian situation, Annan said. It also will not be possible to sustain or capitalize on the gains made to date, he said. Sevan said that based on past records, Iraq could export 2.1 to 2.2 million barrels of oil a day, well above current exports. According to the oil-for-food program's weekly report, Iraq exported less than 1.2 million barrels a day during the week of November 11. Since the program began in 1996, almost $25 billion worth of humanitarian supplies and equipment has been delivered to Iraq with another $10 million in supplies in the delivery pipeline, the report said. "In addition to improving the overall socio-economic conditions of the Iraqi people countrywide, the program has prevented the further degradation of public services and infrastructure," the secretary general said in the report. The nutritional value of the monthly food basket distributed countrywide has almost doubled since 1996 to about 2,200 calories per person per day, and the trend of malnutrition among children under the age of five, while still relatively high, has been arrested and reversed, the report said. The health care delivery services have improved significantly, major surgeries have increased by 40 percent, and there has been a reduction in a number of communicable diseases, the report said. The distribution of 1.2 million school desks has met 60 percent of the school needs, a great improvement since 1996, when students were forced to sit on bare floors, the report 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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