Cover Story

Outsmarting Sactions

A 6-year-old United Nations program-"smart sanctions"-designed to punish Saddam is giving the Iraqi tyrant imaginative ways to punish his own people

Issue: "Tools of a tyrant," Aug. 10, 2002

It is a normal day in northern Iraq when the trucks sit bumper-to-bumper for mile after endless mile, waiting to cross the border into Turkey. Oil transports clog the northbound highway for 15 miles without break. Some will idle for days. Their drivers will sip cardamom-flavored coffee and trade news with shepherds crossing the road behind sheep that look hurried by contrast. Eventually the Turks will give a go-ahead and the immense convoy will be on its way to market.

This is commerce under Iraq's mandatory Oil for Food program, an evolving tableau of economic dos and don'ts administered by the United Nations. The program with its "smart sanctions" is designed to punish Saddam Hussein for the Gulf War without causing average Iraqis to suffer.

Instead, in six years of operation it has spawned a bloated bureaucracy in Baghdad, corruption on both sides of the borders, and migraines for locals and private relief workers who once believed the name of the game was helping starving Iraqi children.

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This month Iraq's opposition leaders have sent their own experts-including a former UN manager of the Oil for Food program-to UN headquarters in New York. Their intent: to lobby the Security Council to become a better steward of Iraq's economy.

Bush administration officials, meanwhile, are planning a crucial gathering next month of the Iraqi opposition in Washington. If the Washington policymakers want to get tough with Iraq, they will want to look not only at a regime change for Iraq but also for its UN-managed economy.

The way the Oil for Food program is meant to work, Iraq is allowed to export oil on condition that the revenues be used to import goods that meet humanitarian needs. Allowed for import under the sanctions: food and medicine primarily, some building materials, and oil industry parts and equipment. Prohibited: imports with a military use and a sophisticated list of "dual use" goods. That puts the "smart" in smart sanctions.

In addition to controlling the import-export trade under prearranged six-month phases, the UN itself administers much of the humanitarian distribution, even actually delivering premeasured food baskets to each Iraqi family.

Reality, not surprisingly, is different. The program itself is a form of central planning that encourages Iraq's socialist government to squash private initiative. The government controls the oil sector, or more than 90 percent of Iraq's hard-currency earnings. Agriculture, on the other hand, left in private hands in Iraq, has been devastated by UN food imports.

More tragically, UN workers in Baghdad are increasingly co-opted by the government, giving Baghdad effective veto power over UN activities. For Saddam Hussein's regime, that's the "smarter" part of smart sanctions. Part of his power includes suppressing information-particularly related to child nutrition and health-that shows the Iraqi dictator is more to blame for malnutrition than UN sanctions.

At the same time, outlawed trade and black-market deals flourish. On the same day the legal trade in oil sits stalled at the Turkish border, fuel trucks across the Tigris River in northern Syria are busy hauling oil from a pipeline the locals say carries illegal Iraqi crude. If those deals benefit Iraq's neighbors enough, it will make coalition-building more difficult for the United States than before the Gulf War-smarter sanctions once again.

Barred from following the laws of supply and demand, entrepreneurs on both sides of the border are finding ways to manipulate the program. Local Kurdish governments levy a road tax on the oil trucks. They say the tariff is their only form of revenue outside the UN program and the only way to maintain roads and build new infrastructure. Turkey, in return, demands that for every shipment of Iraqi oil, one-and-a-half tons of food and other commodities from Turkey must be allowed back across to Iraq.

The quid pro quo can have bizarre consequences. One week after border officials dislodged the convoy of oil trucks, another traffic jam-open-bed delivery trucks all carrying the same thing, bananas-filtered across the border southbound into Iraq.

When the results aren't comical, they are deadly serious. The Oil for Food program began as a way to help starving Iraqi children. Comprehensive sanctions were first imposed on the Iraqi regime in 1990, following Saddam Hussein's invasion of Kuwait. But in post-war Iraq images of Iraqi Kurds clinging to snowy hillsides and tiny coffins in Baghdad moved the UN Security Council to alter sanctions in 1995 with the Oil for Food program as a "temporary measure to provide for the humanitarian needs of the Iraqi people." With the program into its 12th six-month phase, however, more children are actually dying in areas under Saddam Hussein's control than when it began.


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