>Subject: [pttp] Iraqi Sanctions Monitor Number 79

>
>Iraqi Sanctions Monitor Number 79
>
>Friday June 23 2000
>
>
>
>VISIT THE MARIAM APPEAL SITE FOR ALL THE LATEST NEWS AND UPDATES ABOUT
>WHAT IS GOING ON IN IRAQ.
>
>www.mariamappeal.com.
>
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>23rd June 2000
>
>
>WEAPONS' INSPECTOR EXPLODES SANCTIONS
>
>The controversial former UNSCOM weapons' inspector Scott Ritter knows That
>Iraq no longer has weapons of mass destruction - because he destroyed them
>all! And because they are all gone, the sanctions which have killed up to
>one million Iraqi children should be removed immediately, in line with the
>United Nations mandate.
>
>Ritter will launch the Great Britain-Iraq Society, a non-political Group
>working for peace and reconciliation between the two countries. He will be
>speaking about why his job is over and why the continuing and brutal
>sanctions against the Iraqi people should now end.
>
>The American, who was demonised by the leadership when he worked in Iraq,
>will argue powerfully and cogently that to continue victimising a people is
>a crime against humanity. Ritter, who has recently published a book on his
>experiences in Iraq, Endgame, joins the powerful voices of UN humanitarian
>workers like Denis Halliday and Hans Von Sponeck in calling for an end to
>sanctions.
>
>Ritter's inaugural speech to the GBIS will take place at 8pm on Monday, June
>26 in the Grand Committee Room of the House of Commons
>
>For further information contact Trish Meehan on 0207 872 5451 or 07932
>742633
>
>
>CRUDE FACTS - SADDAM IS WINNING CONTROL OF THE OIL MARKETS.
>
>By Malcolm Wallop and George Yates.
>It's been nearly 10 years since the West went to war against Saddam Hussein.
>A brilliant military campaign expelled his army from Kuwait in a little over
>a month. A sustained eight-year inspections regime curbed the Iraqi
>dictator's attempts to acquire weapons of mass destruction. But a nine-year
>UN sanctions policy designed to strangle his regime economically has not
>only failed to accomplish its objectives - it has actually helped Saddam
>accomplish his. Consider this week's meeting in Vienna of the Organisation
>of Petroleum Exporting Countries, where oil ministers voted to raise their
>production ceiling by 700,000 barrels a day, to 25.4 million barrels a day.
>Alas, increased output is not likely to bring down the price of oil. Many of
>OPEC's members are now at full capacity. Indeed, the spot price of crude oil
>for August delivery actually rose by 72 cents after the results of the
>conference were announced. Clearly traders believe that oil supplies are
>tight. Meanwhile Iraq, which does not participate in these conferences, has
>increased its output to a post-Gulf War high of 2.9 million barrels a day,
>up 26% since March. That makes Iraq the world's third largest oil exporter.
>And it gives Saddam the clout to throw the oil markets into chaos,
>particularly if he chooses dramatically to scale back production. Saddam is
>once again a force to be reckoned with in the world economy. How did we come
>to this? UN sanctions were supposed to allow Iraq to export just enough oil
>to purchase urgently needed food and medicine. But the fine print of the
>agreement was much more generous to Baghdad than most people ever realised.
>By 1998, the value of oil Iraq could sell on the open market was capped at a
>little over $5 billion every 180 days - a sum so high that Iraq could not
>even reach it during the period of low oil prices in 1998 and early 1999.
>Perversely, that ceiling allowed Saddam to more than triple his export
>capacity in 1998 alone. Additional volumes, unreported to the UN, are also
>believed to have been dumped on the market through Russian trading
>companies, sold to Jordan, or smuggled through Iran to Turkey. Then, in
>December 1999, the UN lifted its ceiling entirely on arguable humanitarian
>grounds, without considering the effect on the oil market.
>The flaw in UN sanctions policy should have been apparent from day one. The
>policy created a disincentive for Iraq to conserve resources, maximise
>price, or otherwise conduct affairs based on normal commercial
>considerations. Because the sanctions were based on a dollar and not a
>barrel ceiling, low prices made little difference to Saddam. He could create
>an oil glut without having to face the consequences, even if the glut had
>very serious consequences to the rest of the oil-producing world. Not
>surprisingly, it is Saddam who is largely responsible for the collapse in
>oil prices in 1998 and 1999.
>That collapse devastated the oil industry and resulted in the reduction of
>worldwide supplies. Approximately 560,000 daily barrels of oil production
>were lost in the U.S. alone. At the same time, non-OPEC production declined
>for the first time in decades. Even OPEC countries felt the pain, as they
>were unable to maintain existing reserves, much less drill for new supplies.
>Shutting down the upstream industry for two investment cycles has had
>serious implications for spare capacity - that is, capacity that could be
>produced within two months time. While no one has perfect knowledge of spare
>capacity, we do know that today's spare capacity is small relative to the
>current 77 million-barrel-a-day market. Measuring this capacity against the
>needs of a growing market, the natural depletion of oil wells, and various
>transportation and supply infrastructure bottlenecks, worldwide oil supplies
>are tenuous. Few realise that the world needs enough spare capacity to
>ensure a stable supply of oil. And this failure has created a potent gift
>for Saddam Hussein. We have made it possible for him to become a swing
>producer - able to set the world price of oil. He can and probably will use
>this economic weapon. A few months ago, Iraqi Oil Minister Amer Rasheed said
>that Iraq planned to ramp up production by another million barrels a day by
>the end of the year. Ominously, Mr. Rasheed also threatened to curtail
>exports if the U.S. doesn't compromise on sanctions. Is this an idle threat?
>Almost certainly not. Saddam has now achieved what the allies thought they
>had prevented by forcing him out of Kuwait - control of the oil market. He
>can use this leverage to set oil prices or undermine sanctions. As fuel
>supply is relatively inelastic in the short term, very high prices would be
>the obvious result of any export curtailment until the world's oil industry
>can respond. Finding and developing supply requires a substantial lead-time.
>Oil production is not a "just-in-time" business. Obviously, the world has a
>problem. Can it be solved without bowing to Saddam's demands? Fortunately,
>the answer is yes. We absolutely must maintain surplus capacity worldwide
>and support the process that is necessary for the maintenance of that
>capacity. We also need an information system that gives us more accurate
>data on excess capacity and production worldwide than we have at
>present. Western countries that don't have policies to encourage indigenous
>production of oil and gas need to adopt them. In the short term, our only
>recourse to respond to an oil shortage and maintain necessary sanctions on
>Iraq may well be using the world-wide strategic petroleum reserves created
>after the OPEC oil embargo - a system that so far has never been used.
>Whether Saddam will ultimately wrestle control of the oil market remains an
>open question. But he's never been in a stronger position to do so. It's
>time the West starts playing its cards more wisely.
>-
>Mr. Wallop, a former U.S. Senator from Wyoming, served as ranking minority
>member of the Senate Energy and Natural Resources Committee. George Yates,
>an independent oil producer from New Mexico, has served as chairman of the
>Independent Petroleum Association of America. Source: WALL STREET
>JOURNAL EUROPE 23/06/2000
>
>AUSTRALIA: NEWS - NEW IRAQ CRISIS AHEAD - BUTLER.
>
>By MEAGHAN SHAW.
>Another Iraqi crisis was likely in about six weeks, the former United
>Nations weapons inspector, Richard Butler, said yesterday. Mr Butler
>predicted the "crunch point" would come in August when it was most
>likely Iraq would refuse to allow the UN's new weapons inspection agency to
>enter the country. "Iraq has said for the last six months that it will not
>permit it to enter Iraq ... and I suspect that Iraq isn't speaking
>tactically," he said. "I suspect that it will not let that new organisation
>to enter Iraq and therefore we'll probably have another Iraqi crisis on our
>hands." Mr Butler, the former chief executive of the UN Special Commission,
>said the deputy chairman of the new organisation, the UN Monitoring,
>Verification and
>Inspection Commission, Hans Blix, would have his team and inspection
>procedures ready by August. Mr Butler said he was unsure how such a crisis
>would affect the United States presidential election in November, but there
>were three possibilities. One was that Russia would support Iraq's stance,
>which would be acceptable to the Americans because it would push the crunch
>point back until after the elections.
>The second was that George W. Bush and Al Gore would campaign on the issue
>to try to "demonstrate their muscularity". And the third was that the
>commission would move to review sanctions  against Iraq, which it must do by
>17 December according to the provisions under which it was established. This
>would be after the election. Mr Butler also called on the Security
>Commission to urgently review the use of sanctions as an instrument of
>enforcing compliance with international law. He proposed targeting sanctions
>against the leadership rather than the whole population. Mr Butler was
>speaking at The Age/Dymock's literary lunch following the release of his
>book, Saddam Defiant - The threat of weapons of mass destruction, and the
>crisis of global security. Outside, watched by police, a small group of
>activists protested against Mr
>Butler's involvement in sanctions against the Iraqi people. Source: AGE
>(MELBOURNE) 23/06/2000 P4
>
>MYSTERY VIRUS KILLS 30 IN IRAQI HOSPITAL - EGYPTIAN AGENCY.
>
>A mystery virus has killed 30 people and threatens the lives of 25 others in
>the main hospital in the Iraqi capital Baghdad, the Egyptian news agency
>MENA reported on Thursday. It quoted the Iraqi paper `Babel' as saying that
>the virus had contaminated the six main operating theatres at the Saddam
>surgery centre, which it described as "the biggest in Iraq and the Middle
>East".
>
>Doctors at the centre have so far not been able to pinpoint the cause of the
>infection, which has killed all patients undergoing open-heart surgery, and
>all operations have been cancelled since the existence of the virus was
>discovered.
>
>
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