As Saddam chips away, the sanctions cordon crumbles

Published November 9th, 2000 - 02:00 GMT

Iraqi President Saddam Hussein appears to be proving his legendary survival skills once again. Taking advantage of a political vacuum in the run-up to US presidential elections, he is chipping away at the edges of the UN sanctions cordon, which has contained his country ever since the end of the Gulf war in 1991.  

 

The uprising in the Palestinian territories has helped as well. By taking a typically uncompromising stand against Israel, Saddam has been able draw on the increasingly antagonistic attitude toward its main backer — the United States — in the Arab world. In such a climate, increasingly more individuals, companies and governments are showing themselves ready to assume the role of sanctions busters.  

 

It should be noted that the only thing standing between Iraq and the end of the official suspension of sanctions is the threat to veto such a Security Council resolution by the United States and the United Kingdom.  

 

This year, a record 1,500 companies from 45 countries attended the Baghdad International Fair, so demonstrating growing foreign interest in doing business with Iraq. Russia has sent 250 deputies, oil executives and other industrialists, while more than 100 French companies are taking part in the 10-day business exhibition. In addition, official trade delegations from Brazil, Italy, Spain, Germany, Sweden, Belgium, Finland, China, Turkey and Greece are among those attending. 

 

Many of the delegates attending the fair flew into Baghdad, and that, in and of itself, was in defiance of the UN sanctions. On Tuesday, October 31, alone, seven foreign planes landed in Baghdad, transporting officials and business delegations, all of intended to defy and gradually wither the economic embargo.  

 

On October 30, Iraq had announced that it intended sending civilian domestic flights into both the northern and southern “no fly” zones. Instead of standing up to the provocation, the United States and Britain said that they would only enforce the ban against military flights. On November 5, two commercial airliners belonging to Iraqi Airways took off from Baghdad and passed through the “no-fly” zones imposed by the United States and the United Kingdom, with one landing in the southern city of Basra and the other in the northern city of Mosul. Ahmed Murtada Ahmed Khalil later said that the two flights would take place on a daily basis from now on. 

 

Iraq’s attractiveness from the perspective of the international business community should come as no surprise. With 22 million people citizens, the country is in possession of the world’s second largest oil reserves. Even allowing for the fact that since late 1996, Iraq has only sold crude under UN supervision, within the framework of a humanitarian program that authorizes oil exports to finance imports of food, medicine and other essential goods, including oil industry spare parts, with world oil prices running high and a UN cap on export levels scrapped the program has generated a windfall this year. The oil deal is expected to produce more than $10 billion in its current six-month phase, and that opens the door for more trade deals than in previous years. 

 

Despite its outcast status, Iraq was never really abandoned by the international business community, and in particular not by the energy sector. A recent study by Deutsche Bank indicated that ExxonMobil, RoyalDutch/Shell, BP, Respol and ENI have all maintained contacts with Iraqi oil officials. France’s TotalfinaElf enjoys exclusive negotiating rights for the lucrative Majnoon and Bin Umar fields, and for years has been close to signing a deal.  

 

But, with that said, it remains extremely unlikely that any of the multinationals will be prepare to openly defy the US government, and in so doing risk their assets in the United States. Only a UN Security Council decision can remove the sanctions, and that will not happen with both the agreement of the United States and the United Kingdom. Until then, Saddam will not be able to control the vast majority of his country’s oil revenues. 

 

But, in the meantime, he evidently feels that time is on his side, and, judging by the number of foreigners flocking to the Iraqi capital, so is public opinion. — (Albawaba-MEBG)


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