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Weapons of Mass Destruction (WMD)

No more oil for Food in Iraq

IRNA

Moscow, Nov 22, RIA Novosti/ACSNA/IRNA -- The UN Oil for Food 
humanitarian programme for Iraq will officially expire on November 
21, ending an entire era in the life of Iraq and other nations that 
have been co-operating with Iraq in the past seven years. 
The totalitarian economy of Iraq limited by international 
sanctions is giving way to a free market, with completely different 
rules of the game. 
The Oil for Food programme was approved on April 14, 1995 by UN 
Security Council Resolution 986, but it was launched only on December 
10,1996. 
It regulated Iraq`s foreign trade in conditions of sanctions 
imposed on Iraq after its invasion of Kuwait in 1990-1991. Returns 
from the regulated production of oil were used to purchase 
humanitarian commodities, i.e. food, industrial equipment, stationery 
and medicines (involving 24 sectors of the Iraqi economy), as well 
as to finance the UN`s work in Iraq and reparation payments in the 
wake of the Iraq-Kuwait war. 
From December 1996 to March 20, 2003, Iraq exported oil to the 
tune of dlrs 65 billion and received humanitarian goods worth dlrs 31 
billion from March 20, 1997 to October 21, 2003. 
Russia used the Oil for Food programme to return to the Middle 
East markets and reach out into the Gulf region. Russian firms that 
went to Iraq subsequently moved on to Saudi Arabia, Kuwait, Algeria 
and other regional countries. 
The humanitarian aid programme also became one of the first 
examples of co-operation between business and diplomacy in Russia. 
Diplomats proudly recall that the foreign ministry shouldered the 
responsibility for promoting Russia`s involvement in the Oil for 
Food programme. As a result, the Russian share in the purchase of 
Iraqi oil reached 30 percent (40 percent in some years) of the 
overall volume of Iraqi oil exports. 
Russia was also a leader in the humanitarian deliveries to Iraq, 
though the bulk of them were not made in Russia, but re-imported from 
other countries, including the USA with which Iraq did not officially 
collaborate. 
Well-informed sources say the aggregate worth of contracts signed 
by Russian firms with Iraq totalled dlrs 5-6 billion. 
Russia has delivered to Iraq commodities to the tune of dlrs 2.3 
billion and will deliver approximately dlrs 2 billion worth of goods 
within the next six months. In all, 100-150 Russian companies took 
part in the programme. 
Initially, a large part of humanitarian goods delivered by Russian
firms to Iraq were foreign-made. But the share of Russian-made 
commodities, mostly machinery and equipment, grew considerably by the 
end of the 1990s.It is difficult to provide exact figures, as a large 
part of the deliveries were of joint make. 
Russian companies have won a niche in the Iraqi power engineering,
irrigation, water supply and transport spheres. In particular, Iraq 
imported about 3,000 Russian KamAZ lorries. 
The contacts Russian firms have established in Iraq offer them a 
chance to keep their place in the country after the lifting of 
sanctions. Russians traded via Iraqis who will carry on their 
commercial operations in their country, no matter what. 
The Oil for Food programme was suspended when the military 
operation against Iraq was launched on March 19, 2003. But the Iraqis 
needed humanitarian aid, above all food and medicines, more than ever 
before. 
Accordingly, in late March the UN Security Council adopted 
Resolution 1472, which changed the scheme of the humanitarian aid 
programme. 
The UN assumed the functions of the Iraqi government, in 
particular concerning the distribution of commodities among Iraqis. 
Resolution 1483, adopted on May 22, 2003, defined the status of 
the USA and Britain in Iraq as occupying powers and made them 
responsible for developments in the country. At the same time, 
economic sanctions against Iraq were lifted. It was also stipulated 
that the humanitarian aid programme would expire on November 21. 
The USA wanted to curtail the programme sooner, but Russian 
diplomats ensured that it was continued for six months, a period 
needed to determine the fate of 5,000 signed and already financed 
contracts to the tune of dlrs 10 billion. 
Under Resolution 1483, the Iraqis, the UN and the interim 
coalition administration were to analyse all financed contracts and 
choose priority ones. Work on these contracts will continue until the 
summer of 2004 and possibly longer, until they are implemented 
completely. 
Moscow ensured the recognition of 85 percent of the fully financed
Russian contracts as priority deals. One of the largest is the 
construction of the Yusifia heat and energy station by the 
Tekhnopromexport equipment exporting company, one of the very few that
has resumed operation in the unstable situation in Iraq. 
Others are so far making reconnoitring visits to the country. 
As for the remaining 15 percent of the Russian contracts, they 
have not been annulled. Instead, they have been put on ice until the 
appearance of a legally elected Iraqi government, which will decide 
their fate. 
The former Iraqi authorities signed contracts on the construction 
of irrigation and industrial facilities and agricultural elevators 
with Russian companies, in particular with the North Caucasian 
Sevkavkazelevatorspetsstroi elevator building company, the 
Gidromashservice hydro equipment firm, the Intermash machine-building 
company, and the Selkhozpromexport agricultural machinery exporter. 
These contracts are worth dlrs 15-20 to dlrs 170 million each but 
they had not been UN-approved before the last war and hence were not 
given priority rating. However, Russian diplomats hope they will be 
implemented as part of the economic rehabilitation of Iraq. 
Indeed, why should Iraqis look for new partners when they have old
reliable ones? Although the USA is distributing Iraqi contracts, 
Russian firms do not think their work in the country in the past seven
years has been for nothing; they firmly believe that they will 
preserve some of the standing they have won there. 
Meanwhile, Russia is preparing to fulfil its remaining obligations
to Iraq as part of the Oil for Food programme. The USA has pledged to 
assist it because commodities worth dlrs 6 billion are to be delivered
to Iraq in the next six months. 
These deliveries will play the leading role in the restoration of 
the country because the donor assistance, which the international 
community has promised to give Iraq, will not take any practical form 
soon. In other words, the programme will continue to benefit the Iraqi
people even after it has officially expired. 
MB/MM/212 
End 



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