Kurds reap sanctions' rewards

David Hirst
THE WASHINGTON TIMES 
Published 8/15/2001 

DOHUK, Iraq -- In "liberated" Kurdistan's two other main cities, Suleimaniyah and Erbil,
public parks have replaced the army barracks. In Dohuk, the Mazi supermarket has taken
the barracks' place.
Vast, gleaming and air-conditioned, its shelves abound with all one could possibly need, and
a good deal more. From cheap clothing to the trappings of middle-class affluence, the store
features Hitachi fridges and Moulinex mixers, peanut butter and soy sauce, inflatable garden
swimming pools, lawn mowers and grandfather clocks. At the checkout counter, uniformed
young women scan bar codes with infrared scanners.

Judging by a large warning sign, affluence has bred shoplifting: "High-quality monitors are
in operation, so please beware not to fall into an embarrassing situation."

It can't be said that prosperity has come to Iraqi Kurdistan -- it would take three months of a
teacher's salary to buy the pair of Italian women's shoes on display -- but it's obvious that
these northern provinces, which until 1990 were the most backward, deprived and oppressed
of President Saddam Hussein's domains, are now much better off than those where his writ
still runs.

Goods cheaper here

The local currency -- still the pre-1990 Iraqi dinar -- buys 100 times as much as it would
elsewhere in Iraq. All perks included, a university professor here earns the equivalent of at
least $250 a month; in Baghdad he might get a tenth of that.

There are Mercedes, even an occasional BMW, on newly paved highways. Hotels are
opening, and open-air restaurants flourish beside mountain streams. There's a tourist
industry too, mainly summer visitors from the Kurdish diaspora, or Iranians who cross the
border for a weekend's dancing, drinking and veil-free relaxation.

"This area," said Jamal Fuad, a minister of reconstruction, "is achieving a revival surpassing
all countries in the region."

The Kurds date their mini-boom from 1996 and the passage of Security Council Resolution
986, the "oil-for-food" program. It contained the provision that 13 percent of all
U.N.-authorized humanitarian resources should go separately to the north.

'It's Iraq's money, after all'

Although under the U.N. program the Iraqi government decides how the goods and services
should be distributed throughout the country, in the Kurdish north it is the United Nations
that distributes material and pays for the operating costs.

The money involved in "oil-for-food" in Iraq, including the north, is more than the entire
U.N. budget for the rest of the world. As for Iraqi Kurdistan, its mountains and valleys are
blue with the signs of nine U.N. implementing agencies that are not even present in the rest
of Iraq -- and for each of them, this is their largest operation in the world.

The sums at the disposal of the United Nations are vast, and the way it spends them often
hugely wasteful. "The attitude is, 'so what?'" said a former U.N. official now working in the
north, "It's Iraq's money [from oil exports], after all."

Shafiq Qazzaz, Kurdish regional government (KRG) minister for humanitarian affairs, said:
"It was 986 that saved us." Overnight, every inhabitant had a free, 10-item monthly food
basket that would previously have cost a whole family's monthly income, or more. The
World Food Program (WFP) distributes it, with the willing collaboration of the KRG which,
officially, the U.N. does not recognize.

Development funds blocked

But the WFP is the only U.N. agency able to spend all the resources at its disposal, for food
manifestly qualifies as "humanitarian." What Kurdistan now needs is development --
sustainable, income-generating growth.

"We're not an Afghanistan or Somalia anymore," said Azar Barwari, a Kurdish Democratic
Party official. "We're a potentially rich country."

It could do great things with its 13 percent of Iraq's oil revenue -- if only it could spend it. As
Iraq's oil revenues have risen, the proportion of it going for food has fallen to less than a
third. But the rest is not going for "development," for under sanctions that remains a
forbidden word in the U.N. vocabulary -- though "reconstruction" and "rehabilitation" are
often euphemisms for the same thing.

"When the U.S. and Britain formulated the Memorandum of Understanding" governing
implementation of Security Council Resolution 986, said Nasreen Sikeek, minister of
reconstruction, "perhaps they assumed that the U.N., being in charge in the north, would
make things work properly. But the truth is that we are still at Baghdad's mercy."

Baghdad drags its feet

And the Iraqi capital objects to anything that smacks of development or real progress in the
Kurdish north, from which the government is excluded by a U.S. and British-imposed "no-fly
zone."

Since Baghdad doesn't have to approve of any U.N.-run project it doesn't like, Kurdistan has
now accumulated in excess of $2 billion in unspent Iraqi oil revenues.
It is partly the fault of U.N. officials, the Kurds say. These officials are very deferential to
Baghdad. They risk harassment or expulsion if they rock the boat, and self-interest dictates
caution for those on a tax-free salary of $10,000 a month instead of the few hundred dollars
they might be earning at home.

The 200 foreign U.N. officials in Kurdistan refuse to talk to reporters "unless you have a
visa from Baghdad," they add, knowing that the reporters never do.

Power projects languish

"It's hardly surprising," said one foreign U.N. official who was about to resign over the
whole "sorry story" of the United Nations in Iraq, "that the government, so anxious to
discredit sanctions, should try to prevent the Kurdish economy from taking off in spite of
them -- and thereby showing up its own performance."

The procedure is for the KRG to propose projects, "developmental" or otherwise. They go
first to the U.N. office in Erbil, which passes them to its headquarters in Baghdad, which
submits them to the Iraqi government, which ignores them.

Having cut off all electricity supplies to the north since the early 1990s, the Iraqi
government now seeks to prevent it becoming self-sufficient in this area, either by building
of dams for hydraulic power or through oil- and gas-fired generation. Vast swaths of the
country depend entirely on private generators.

In government-controlled territory, Baghdad supplies sprinkler systems to Arabs newly
installed on formerly Kurdish farmland but denies them to Kurds in Kurdistan. It impedes
the growth of agro-industry -- weaving or fruit and vegetable canning -- in a region where 70
percent of the population is directly or indirectly dependent on the land.

U.N. spending constrained

It withholds authorization for bridges, road extensions, hospitals, a slaughterhouse, spare
parts for an existing cement factory and, of course, a drilling rig to raise output from the
Taktak from the 14,000 barrels per day it now yields to the 500,000 bpd of which it might
be capable.

Because under sanctions the United Nations is forbidden to buy locally, the Kurds buy their
"oil-for-food" wheat at $200 a ton, using U.N.-withheld Iraqi oil revenues. The Kurds
themselves grow a better-quality wheat, and more of it than the 500,000 tons a years they
consume, but smuggle it to Turkey and Iran for less than $100 a ton.

Nor can the Kurds persuade the United Nations to spend some of their huge surplus of
"food-for-oil" money to, say, raise the salary of teachers to $50 a month to boost the local
economy.

The Kurds may not like sanctions, but they do love their 13 percent of Iraq's oil revenues.

Kurds want guarantees

"Are you surprised," asked Mr. Barwari, the KDP official, "that every time the U.N.
discusses the possible lifting of them we get nervous?"

This is not just for economic reasons, but for what they signify as a measure of the
10-year-old Anglo-U.S. political commitment to Kurdistan.

Would a weakening of sanctions imply a loss of other ingredients in the "containment" of
Saddam Hussein -- above all the northern "no-fly zone"?

Lifting them, without compensating guarantees for Iraqi Kurds, would instantly raise the
specter of another 1991 -- another panic flight to the frontiers by an entire people fearing the
tyrant's return and his long-delayed vengeance.
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Liberated and safe, but not yet free
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