No economic windfall for Iraq from Amman summit

Published March 29th, 2001 - 02:00 GMT

Many of the Arab heads of states who headed to Amman, Jordan, this past week for their two-day summit, went there hopeful that, after more than 10 years, a formula would be found according which the bitter divide between Iraq and Kuwait could be bridged. 

 

They were to be disappointed. While the summit's final declaration did call for "the lifting of the embargo on Iraq and to deal with the humanitarian issues related to the Kuwaiti prisoners and missing people and Iraqi missing people," it was an insipid compromise accepted because no common ground could be found the Iraq and the country that it invaded in 1990.  

 

Right up until the final hours of the summit, a group of Arab leaders, including King Abdullah of Jordan, President Hosni Mubarak of Egyptian, President Ali Abdullah Saleh of Yemen, President Abdel Aziz Bouteflika of Algeria, Muammar Qadhafi of Libya and Saudi Defense Minister Sultan bin Abdel Aziz tried to persuade Iraq’s Vice President Izzat Ibrahim to accept a three-point, middle-of-the-road resolution.  

 

It called on Iraq to fully implement all UN Security Council resolutions passed its invasion of Kuwait, a lifting of UN economic sanctions that have been in force on Baghdad ever since, and the resumption of commercial flights in and out of Iraq.  

 

But the Arab leaders were not prepared to back an Iraqi request for a unilateral Arab lifting on the sanctions in defiance of the United Nations, and so the Iraqis refused to along. 

 

So that the issue would not be put into the deep freeze after the Amman event, the summit asked King Abdullah continue consulting with the government s in the region, consultations and contacts to improve ties between Iraq and Kuwait for the sake of Arab "solidarity.”  

 

Referring to the devastating effects of the UN sanctions on his country, Iraq's Ibrahim urged that the Iraqi people plight should be linked to the "Palestinian people's struggle for the liberation of their territories."  

 

He added: "Any disregard of these two issues means disregarding the common basis of the Arab nation's position ... for a prosperous and peaceful present and a guaranteed future."  

 

The Iraqi government’s refusal to bow to UN demands involves is largely political. Economically, the country has little to gain by taking an independent stand.  

 

The true extent of Baghdad’s economic plight is difficult to gauge, because very little reliable economic data s released, but what is not known is not encouraging.  

 

A chilling detail, according to official Iraqi sources, is that some 717,000 children have died as a result of the UN sanctions. 

 

Virtually all sectors of the Iraqi economy suffered as a result of its war with Iran during the 1980s, leaving it with a foreign debt exceeding $75 billion.  

 

Much of that money was owed to Saudi Arabia and Kuwait, which well may have been one of the incentives for Iraq’s invasion of the latter in 1990.  

 

But its economy suffered a devastating by the trade embargo imposed by the United Nations after the invasion of Kuwait in 1990 and the Gulf War in 1991 

 

For his part, Iraq's commerce minister recently estimated UN embargo against Iraq has cost the international community more than $200 billion dollars in lost trade. 

 

Quoted by the official news agency INA, Mohammad Madhi Saleh said Russia lost almost $40 billion, France $35 billion, Turkey almost $30 billion, and the United States, Britain and China each lost $25 billion.  

 

Despite its reluctance to buck the UN trade embargo, since the international body okayed the oil-for-food program in 1996, the Arab world has functioned as Iraq’s largest trading partner.  

 

Trade between Iraq and Arab countries reached $6.2 billion in 2000, representing 47 percent of Iraq's total trade.  

 

For its part, Kuwait, which was forced to rebuild much of its economic infrastructure after being liberated from Iraqi occupation in 1991, is riding high.  

 

On March 26, the National Bank of Kuwait (NBK) reported that the country would post a record budget surplus of $5.6 billion at the end of the current shortened financial year, as a result of high oil prices. That is equivalent to $7.5 billion on an annualized basis. 

 

In fact, the projected budget had forecast a deficit of $5 billion dollars. But oil revenues were calculated at a conservative price of $13 a barrel, whereas the actual price averaged around $25.6 a barrel in the July-February period.  

 

Kuwait's current OPEC quota is 2.021 million barrels a day, but will be reduced to 1.941 million barrels from April 1. – (Albawaba-MEBG) 

© 2001 Mena Report (www.menareport.com)


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