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Issue: "Middle East: No easy answers," May 31, 2003
1
un plugged
Workers at the UN Office of the Iraq Program could be receiving pink slips after the Security Council voted on May 22 to end almost 13 years of sanctions against Iraq. A resolution ending the sanctions regime passed 14-0, with Syria boycotting the meeting. It capped a month-long campaign by President Bush, who urged that sanctions be dropped once U.S. forces liberated Iraq. Veto-wielding Security Council members France and Russia wanted to keep sanctions in place to retain UN (read: European) control of Iraq's oil and lucrative postwar reconstruction contracts. Instead, the measure grants the United States and Britain political and economic authority in Iraq until an internationally recognized, representative government is installed in Baghdad. The UN sanctions regime at one time employed nearly 4,000 people in Iraq, along with a substantial staff overseeing the oil-for-food program and nearly 10 separate UN agencies it took to run it from New York, Paris, Geneva, Rome, and Nairobi. Thanks to Iraq's oil wealth, they oversaw a fund flow of $15 billion a year, more than five times the UN's annual operating budget. Beyond the immediate implications for Iraq, the vote has important implications for the international body, which faced irrelevancy after the rancor over going to war. U.S. opponents on the Security Council chose to unite behind Mr. Bush after lengthy negotiations on the language of the resolution-a return to diplomacy as usual at UN headquarters. It was also a symbolic end to a program that in reality ended months earlier. Weapons inspectors and others UN staff left Baghdad and suspended the oil-for-food program in March just ahead of war. Under sanctions, UN diplomats were notably ineffective in prompting Saddam Hussein to divulge his weapons program and other violations of the sanctions. They scored better at distributing basic aid to all parts of the country with some of the oil-for-food proceeds, and plan to move over $900 million in aid to Iraq before the program expires on June 3.
2
orange again
The risk of fresh terrorist attacks at home and abroad prompted a flurry of U.S. precautions going into Memorial Day weekend. The United States closed its embassy in the Saudi Arabian capital, Riyadh, and two consulates elsewhere in the country on May 20. President Bush also hiked the terror alert at home to orange, the second-highest level on the five-color scale, for the third time in three months. A day earlier, Saudi Arabian authorities arrested three suspected al-Qaeda members in Jeddah airport on charges of plotting to hijack a plane. On May 21, Qatar-based Arab satellite television station al-Jazeera aired a voice recording it attributed to al-Qaeda's second-in-command, Ayman al-Zawahri. The voice exhorted Muslims to attack embassies and commercial hubs in the United States, Britain, Australia, and Norway. Secretary of State Colin Powell complained to Qatar's foreign minister and said airing the tape served only to inflame an already tense situation. While it was unclear if the tape was genuine or not, the United States immediately closed its Norwegian embassy. With back-to-back suicide attacks in Saudi Arabia and Morocco in mid-May, American officials were also watchful elsewhere in the world: Employees at the U.S. embassy in Kenya were given the option of leaving the country. Britain and Germany were equally cautious-the two countries also shut down their Riyadh embassies.
3
change for a dollar
Superstar financier George Soros says he's short-selling the dollar-and that has set Wall Street spinning. The billionaire expects U.S. currency to drop even farther. "I listen to what the secretary of the treasury is telling me, so who am I to stand in the way?" he told CNBC. Mr. Soros, whose monster hedge fund controls $11.5 billion in assets, referred to Treasury Secretary John Snow's suggestion that he is comfortable with the currency's fall. Many American investors and analysts worry that overseas traders will become pensive about U.S. stocks and bonds. Dollar-denominated assets have long been a safe haven for people in shaky parts of the world. Right now, foreigners hold almost half of U.S. Treasury securities and 10 percent of U.S. stocks. If they start selling, that could create problems.
4
indonesian anxiety
Indonesia's latest violent clash was about oil wealth and not religion, but tensions between ruling Muslims and minority Christians are never far from the surface. Government troops stormed into the western province of Aceh on May 19 to crush separatist rebels after talks collapsed between the two sides. The renewed war buried a 5-month-old peace deal designed to end 26 years of conflict. As 45,000 troops and police descended on Aceh, each side blamed the other for arson attacks that left about 150 schools in ashes. While staunch Muslims dominate Aceh, the province's conflict has nothing to do with the religious tensions that fuel unrest in the rest of the archipelago. Aceh was never officially part of the Dutch East Indies, and natives still chafe because the colonial power included it in the newly independent Indonesia. The central government is loath to relinquish the oil-rich area, while some 5,000 rebels would like the wealth to remain in the province. Aceh is nonetheless the site for an experiment that Muslim hardliners in other provinces are watching closely: Early last year officials there introduced Shariah law. The first court opened in March, and the province's miniscule Christian community worries that it will eventually have to conform to its strictures.

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