Iraqi Spoils &  White Knights	Constraints and Opportunities Ahead	Public Sector Expenses
Humanitarian  Challenges Ahead	Financial and Political Challenges	Supplies
The Son of Oil for Food	Oil Exports and Reconstruction	Command and Control

Part I:  UN Sanctions and the Oil for Food Programme

Iraqi Spoils and White Knights

Food rationing shaped many European gourmets and gourmands after the Second World War. Today, it is a common experience in many developing, food insecure and poor nations. In Iraq, the biggest food rationing system in the world has been in place for the past six years. Every Iraqi receives the same food ration,[1] it makes up four fifths of household income, and sixty per cent of Iraqis could not pay for food from the market if it were withdrawn. It costs $200m per month in imported goods paid for by Iraqi oil. This figure is comparatively low for a nation of 27m people, since most Iraqis involved the ration system work for a wage below the poverty line.

In this article I highlight the extent of the sanctions and Oil for Food experience in Iraq that has contributed to this extreme dependence on foreign imports and functioning administration. The Oil for Food Programme (OFFP) is far bigger than its food component. In effect, it regulates all of Iraq’s external trade. Sanctions have suffocated most domestic economic activity – only state-owned and supervised enterprises survive. Iraq’s mechanistic economy managed to provide many material goods to Iraqis after subsequent modifications to the ‘humanitarian’ OFFP, but a generation of Iraqis has not been trained in modern technologies, techniques and has not been able to embrace new ideas. Most Iraqis struggle to survive, teachers moonlight, farmers need food rations to feed their families, and university students lack equipment, textbooks and, most of all, prospects for a future. 

Will freedom and liberty be able to change this overnight? The war against Iraq has not yet been concluded, as US officials at Central Command in Doha remind us daily. But action to meet the needs of Iraqis seems to lack guiding principles and a fair assessment of roles and responsibilities. Discussions limit themselves to US versus UN. At a recent meeting at the London Overseas Development Institute of humanitarians working in Iraq a presenter failed to mention the role of Iraqis that both the US and UK and, to some degree, the UN like to underline.

This may not have been by accident – the US has shared few plans about the next 3-6 months other than naming administrative sectors and nominating US administrators. It seems as though retired General Jay Garner, appointed to lead the Pentagon-controlled, but State Department financed, Office of Reconstruction and Humanitarian Assistance, is to appear as a deus ex machina on the scene. His bosses back Iraqi exiles to play a lead role in helping him administer the country, others in the US administration see this as a recipe for disaster, but have until recently been unable to put forward their own, preferred Iraqis. The UN only knows the Iraqi administrators of the Saddam Hussein regime, yet it knows them rather well. All US factions have said that competent technical Iraqi administrators need to stay on. The UN, through its agencies and programmes and through the Office of the Iraq Programme, also knows the status of Iraq’s economy, contracts and humanitarian needs better than US soldiers and their superiors in Washington and better than any cohesive body that could be convened in Iraq at present. An outside power and facilitator will be needed to set a framework for Iraqi political transition. This, in turn, should facilitate the transition from addressing emergency needs to maintaining basic services with better attention to rights-based development programming.  International development consensus, at least in theory, on human rights and development appears the antithesis of the proposed American way: a sectorally disjointed effort, centrally controlled in D.C., without consultations, and with profit repatriation. When the IMF will decide that Iraq’s public finances need tightening because of its debt, the natural response will be for the World Bank to privatise key public services – with US companies and USAID grants at the ready.

In Iraq, it is difficult to separate humanitarian from economic questions, or from those about public services.  The UN holds the financial cards for Iraq’s immediate needs. Over $12bn lie in its Iraq escrow accounts, but need Security Council and an Iraqi government’s approval for spending, contracting, or transferring. UN agencies have launched a Flash Appeal for $2.2bn over the next six months to meet Iraq’s humanitarian needs, including repairing some basic infrastructure, without political strings attached. $410m had been pledged to date, two-thirds by the US. However, UN agencies and humanitarian agencies still face political obstruction in the UN sanctions committee and military obstacles in getting aid into Iraq.

The UN system also holds the political cards – OFFP and sanctions are decided in the Security Council. The IMF and World Bank will not touch Iraq unless any governance structure there receives some international legitimacy, which US/UK occupation and hand-picked Iraqi Interim Authority (IIA) does not bring with it. The US is therefore trying to counter these odds by giving out hefty contracts to US companies and NGOs for making Iraq a better place – managing ports, rehabilitating the oil infrastructure, rebuilding Baghdad and reforming the education system, among other ‘nation building’ initiatives. Recent developments between war supporters and opponents have moved the UN closer to an endorsement role for a US-led post-conflict Iraq. Sacrificing an impartial UN mandate for diplomatic unity is like playing chess with Iraqi pawns.

The need for much work in Iraq is clear. America’s attempt to form Iraq in its own image by leaving a business reconstruction and development legacy after the military presence with strong US imprints will fail – however sincere the intentions – unless it becomes inclusive of Iraqi, regional and international experience. Humanitarian needs in the true sense of the word must be the top priority right now. These include water, food and medical supplies and protection to vulnerable groups. Stories of rape and abuse will only surface with time, if ever, but it would be a miracle if they didn’t occur as in all other situations of lawlessness. Furthermore, limited rehabilitation work will need to be undertaken on key infrastructure. Funding for this exists through the Oil for Food Programme, UN Flash Appeal, and independent NGOs – who will, where necessary, draw on private business to deliver on their mandate. For US/UK military personnel to carry out such duties runs the risk of providing a basis for future resentment because it inevitably entails elements of power and control. US civilians, through ORHA retaining control over these matters, will delay and complicate actions.[2] Medium term reconstruction and development (a word that has not been used much in this context) will need to be based on well-informed and negotiated priorities among Iraqi representatives of different constituencies. Implanting reconstruction and development strategies before Iraqi interlocutors can assess these and co-ordinate will also cause future resentment. A near exclusive reliance on US companies and NGOs bears the risk of being seen as cultural imperialism, especially because funding originates with the US government.

The US will have the largest role to play in post-conflict Iraq, but it should accept that its strengths in Iraq are of a military, financial, and political nature. They do not lie in humanitarian assistance or administration.  American military capabilities should be used to make Iraq safe and financial resources should be chiefly pooled into debt forgiveness schemes and to fund humanitarian assistance. American political weight should be used to ensure a good standing with many constituencies inside Iraq and for reintegration of Iraq into the region and international community.

The UN, on the other hand, is entrusted with Iraqi and donor financial resources to meet the immediate needs of the Iraqi people. There are no rivals internationally for this job. The UN also has the humanitarian and development expertise in Iraq The UN has made mistakes and learned lessons from complex emergencies, both administratively and politically.  A key shortcoming has always been its limited mandate, funding and splits between East and West, the Security Council’s permanent five and the Non-aligned Movement or other groupings. A major ingredient of success has been the maintenance of impartiality. The UN may, initially, be no better guarantor than the US/UK that Iraqis can take their own decisions, but the UN provides a better guarantee that children are protected, women are heard and the poor are given a stake in their future – even if that does not fit in with trickle-down economics.

Part II: Humanitarianism, Development and Reconstruction – the UN vs. the US

Humanitarian Challenges Ahead

Most relief agencies have predicted a breakdown of the food ration system under OFFP. There are four important points of possible breakdown.

• First, funding is important: since all food is paid for from oil revenues, there needs to be sufficient funds for future contracts. Food worth $2.5bn has already been contracted, but its funding status is unclear. Food contracts worth at least $450m are not funded.[3]
• Second, import of supplies can break down. With the renewal of the OFFP under resolution 1472 food contracts can now be renegotiated by the UN Secretary-General and shipped to Iraq. Currently, the Office of the Iraq Programme has priorities $875m worth of existing, funded food contracts, primarily for pulses and children’s food, as wheat has been stockpiled in the region. However, the port of Umm Qasr was the main port of entry for food and it is unclear how it can be used to capacity in the near future. Umm Qasr is important not only as a port, but because it is tied to rail and road network to Iraq’s most populous cities. Furthermore, the Baghdad ministries played a central role in shipping supplies to central storage facilities in each of the 15 governorates under their control. Future distribution will depend on the security situation, on improvised management and logistics and the proper functioning not only of roads and trucks but also of the warehouses and silos, many of which have been ‘completely looted’. Schedules for shipment to local agents are equally at risk. UN food monitors should have information on distribution sites and mechanisms; coalition forces do not.
• Third, no provision is being made for delivery of ration supplies to areas that have not been security assessed. Control by coalition forces over certain areas does not yet mean it is possible and safe to deliver assistance. Some elements of the ration, such as grain, soap and cooking oil are imported as raw materials and processed inside Iraq. It is not known whether coalition forces have secured these production centres and facilitated their early resumption of production. North Iraq, for example, has no milling facilities and depends on flour, rather than grain, reaching its population from Kirkuk and Mosul.
• Lastly, distribution from agents to families may break down for at least some parts of the country. Because food agents were often closely associated with the regime, albeit not for ideological reasons, they may prefer to move or to stop working in that capacity and destroy lists of beneficiaries. Perhaps other incentives need to be devised for them to continue their work. The politically and physically powerful, or armed, will ensure they get rations first if and when they become available again. Displaced persons cannot access their food ration through the normal distribution channels.

The renewal of OFFP entailed some modifications. It was entrusted to the UN Secretary-General on 28 March 2003 for the next 45 days and allowed for some changes, such as additional entry points for goods. So far, the port cities of Aqaba in Jordan and Lathakia, Syria, have been designated. Almost exactly at the same time, the UN released a Flash Appeal for $2.2bn for meeting the humanitarian needs of the Iraqi people over the next six months. The new OFFP and the Flash Appeal sit uncomfortably together.

The relation between the two is unclear, but it appears that the Appeal is subsidiary to OFFP. That means that only when OFFP is out of money for food, will WFP step in with its budgeted $1.3bn for food aid. This is problematic, since it will take time to renegotiate contracts with suppliers and deliver food to the ports, let alone distribute it. OFFP goods that are allowed and/or funded are much more restricted than Flash Appeal assistance – some of which is already pre-positioned. OIP’s Executive Director, Benon Sevan said on 8 April to the Council that much of the humanitarian emergency needs in Iraq could not be met through OFFP.

The Government of Iraq had rejected the new resolution and made it clear it will not co-operate paying for food distributed under coalition forces supervision. Impartial UN agencies could work independently from coalition forces in safe areas if their funding came from donors and not the Iraqi government alone. How will senior Iraqi administrators view the distribution of humanitarian supplies with their money, but without their involvement? Iraqi oil exports under OFFP will also pay towards additional costs of the programme. These could be substantial, including negotiation of insurance contracts and compensation for additional storage in vessels at sea. International UN staff and UN vehicles would need to be paid for not only in North Iraq, but also in distribution systems for the 23.3m Iraqis living in Centre/South Iraq.  There is at present no recognised party to authorise further oil exports to generate additional revenue. This comes at a time when, across the programme, there is a funding shortage of $5.8bn[4] and the oil storage terminals at Ceyhan are full to capacity with around 7m barrels of Iraqi oil.

The Son of Oil for Food

These are some of the concerns humanitarian agencies have about how to maintain food security in Iraq whose population is characterised by dependence the Oil for Food programme’s handouts. Aside from these larger questions of funding and logistics, there is at present no guarantee that female-headed households with malnourished children will receive the assistance they have a right to.

The first task now must be to establish a secure environment in order for the distribution of food to resume, which is currently contracted and en route to Umm Qasr and recently trucked through Turkey. Looting, rioting and reprisals must be prevented and stopped where they occur. A second task is to mandate a comprehensive and nation-wide needs assessment by an impartial body. This must be urgently undertaken to find out what existing stocks in storage and at the household levels are, who has moved and needs additional assistance, and what damage the war is causing to distribution mechanisms. The new OFFP’s mandate expires on 13 May 2003. This opportunity should also be taken to revise its funding. Iraqi money should not have to pay for Iraqi refugees or for UN international personnel – this must come from donors. OFFP had a restrictive mandate, designed as a handout system and relying on imports to prevent foreign exchange falling into the hands of the regime. Not only has this undermined local agriculture but it has also led to centralised production of key ‘national’ products.

Short to medium-term humanitarian assistance must rely on and foster local production capacities, it must involve Iraqis in the process as much as possible, and it should assess what parts of the ration do not need to be imported but can be supplied locally or domestically. The 2003 harvest, if it is not interrupted by conflict  (in which case the international community would have to feed Iraq for a further year) would be a starting point for this. Most of all, the blanket coverage of rations and its equitable distribution must be made more responsive to need – so that those who can afford food on the market do not receive it, while those who were forced to sell part of it continue to receive it.

Constraints and Opportunities Ahead

In short, the potential for further deterioration of the humanitarian situation remains great. What are the constraints and opportunities facing effective humanitarian assistance and sustainable development that maintains access of vulnerable groups to basic services and increases their chances of participating in public and economic life?

In the near and medium term of up to two years, assuming a benign scenario where security and law and order can be established fairly quickly , the challenges will be financial and political. In the longer term, international, regional and domestic economic aspects flowing from early decisions on political settlements will determine how quickly Iraqis can make up for the lost decade of sanctions.

Financial and Political Challenges

Over the next six months, how much will it cost to maintain basic human security in Iraq? This is the period in which occupation forces and the Pentagon Office for Reconstruction and Humanitarian Assistance will likely play a lead role in managing day-to-day affairs, while a political process with heavy US and potentially some UN involvement attempts to establish an Iraqi Interim Authority. The ideal scenario would see a return to work of thousands of Iraqi administrators, technicians and professionals. The UN and international humanitarian organisations will be immediately involved in humanitarian assistance but, with the exception of food and medicine, their work will focus around specific sectors and communities and will be no substitute for running the basic services throughout the country. There is, at present, a gap in humanitarian assistance that is not filled because of security concerns. Over the next months, there will be a potential gap in running basic services and providing assistance, because the UN need access and have capacity while ORHA has the legal obligation, wants control and has funds for private US companies to manage things.

Funding among the following three areas will entail various disputes over priorities, responsibilities and control: first, reconstruction and maintenance efforts; second, import of supplies, chiefly among them food, medicine and water; and third, the public wage bill, including pensions and unemployment and social welfare benefits. All are fraught with uncertainty about the extent of financial needs, political control and difficulties in transition management.

Oil Exports and Reconstruction

Although oil exports could and should resume quickly, political authority needs to rest ultimately with Iraqis on how to spend revenue. International humanitarian law permits the US/UK to export oil, but current sanctions may not. Any new export revenue should continue to be placed in a UN escrow account, to avoid charges that US/UK are exploiting Iraq’s ‘natural patrimony’ as one recent report put it. It is not known how much damage was done to oil fields, what the current export capacity is, how secure export routes are and how confident buyers would feel in the absence of legal clarity about the authority over Iraqi oil exports under sanctions. Some major oil companies like Chevron Texaco have indicated that they are ready to buy Iraqi oil, but will await further developments before making commitments. The US government has awarded contracts for the safety and rehabilitation of the oil industry for substantial amounts of money. Since these contracts do not involve a legitimate Iraqi authority and profits accrue to foreign, it would appear exclusively US, companies, funding for these contracts needs to come from the US government and cannot be supported by existing Iraqi revenue. Theoretically, $3bn dollars should have accumulated to date in Oil for Food UN escrow accounts for spare parts to the Oil industry, as established by resolutions 1330 (2000), 1284 (1999) and 1175 (1998). However, none of these funds have so far been tapped because of differences over their use for paying for services rendered inside Iraq by foreign companies.

This existing money under Oil for Food specifically for the purpose rehabilitating the oil industry can only be used under one of two conditions. First, the UN is given a mandate to assess current short term needs and allocates money for this purpose and changes the terms of reference so that foreign expertise can be used in Iraq where necessary. In that case, public and transparent tendering would need to occur and existing contracts placed by Saddam Hussein would not necessarily be honoured under new terms of reference. Alternatively, an Iraqi Interim Authority quickly comes into being, sanctions are lifted and funds in the escrow accounts turned over. At this point, legal experts would have to decide whether existing contracts, mainly with Russian companies, would need to be honoured. If occupation forces find buyers and export oil, the revenue should be put in a trust fund on which no claims may be made until a representative government can take a sovereign decision. Of course, the US commander can negotiate with an Iraqi Interim Authority terms under which US reconstruction services to improve the country’s infrastructure can be reimbursed in the future. Yet, without a UN mandate for a post-conflict role (which would give legitimacy and authority to the transition structure) it is doubtful whether a freely elected and recognised Iraqi government would be morally bound to honour those commitments.

Two scenarios emerge: In one, there is a UN Security Council Resolution soon, perhaps some time in May, giving the UN a political mandate for an international conference, lifting most sanctions and modifying further the Oil-for-Food programme. Then, Iraq could potentially export 1-2m bpd June-October. The six month time frame is chosen because it will take time to rehabilitate the oil industry and negotiate terms of contracts, and because an international conference may have chosen Iraqi representatives and decided mechanisms for registering parties and preparing elections by then. The other, more likely, scenario, is that ORHA will run Iraq with a US appointed Iraqi Interim Authority, at least until an international conference can decide on mechanisms for a transition from the transitional, US/UK occupation-cum-Iraqi rule of Iraq. It is unclear whether this would receive some UN endorsement without UN involvement up to such a conference. The conclusion, therefore, must be that either there is a UN mandate with UN involvement, or, that there is a US/UK-Iraqi collaboration, for which all oil revenues must be placed in trust and all reconstruction contracts must come from donor grant funds if executed by foreign companies.

Does this mean that whatever authority rules in Iraq cannot spend funds for maintaining services? International law, following the Hague Regulations and the Geneva Conventions, allows the occupying power to impose taxes and obliges the occupying powers to maintain public services essential for the population. A distinction is drawn between what the occupier does for its own benefit – this can only arise from military necessity – and what it does for the occupied people – this must take the resource situation for occupied territory into account. The occupier, by definition of the laws that govern occupation, is only temporarily in that position. Therefore, that power possesses, but does not own, property belonging to the occupied state. Private property – in which communal property is included as well as cultural and religious sites – must be respected. The occupier may not engage in rewriting the laws of the occupied state, but must respect them, unless they are in conflict with international laws. Since international humanitarian law is meant to afford minimum protection for life, survival and dignity to civilians, the immediate humanitarian needs override strategic decisions of investment.  The US and UK are therefore not only permitted, but obligated to pay out of Iraqi funds for public services. The problem is that there will be no existing funds.

Public Sector Expenses

Iraqi public funds are in the red, however, by between $100bn and $400bn from debt and 1991 war reparations. There are additional restrictions through UN sanctions that are imposed upon the use of Iraqi funds in UN escrow accounts. This is where it becomes difficult. Should the Security Council lift certain aspects of sanctions, recognise the occupation as the next best thing to an Iraqi government and allow it to disburse frozen Iraq assets of several billion US dollars recently seized by US authorities in addition to Oil for Food accounts? The practical, short-term answer is: in order to avoid a serious humanitarian crisis the occupiers must pay Iraqi salaries and all necessary supplies from their own funds, because Iraq does not have the funds. Occupation forces can export oil to pay for immediate humanitarian concerns, basic services and salaries, only if there is legal clarity and sanctions are modified. Decisions on spending oil revenue are intensely political: how to pay public servants in a country with two currencies, opposite rates of inflation/deflation and different wage levels? Should Ba’th Party administrators be paid by coalition forces who might later face criminal charges? Widows, pensioners, and the unemployed have had little call on oil revenue in the inflationary past – yet they need support most. Should salaries be paid in dollars, or one of the two existing dinars?

Information about Iraq’s public sector wage bill is anecdotal, but a concerted effort should find the relevant information in collaboration with Iraqis. In general, the public sector has contracted over the past years, with many former state employees now unemployed or employed in Iraq’s growing informal sector. Teacher salaries were as low as $3-6 per month in Centre/South Iraq. Their salary was often supplemented with additional food rations. Revenue to pay public salaries will largely have ceased. Insecurity and infrastructure damage will prevent most businesses other than food and everyday commodities to cease. The construction sector employed a legion of labourers over the past two years when construction materials were allowed into Iraq. In the months leading up to conflict, Iraqis have stocked up on plastic sheeting, food, kerosene and other items – but will have no savings or assets to sell in order to cope with a loss of income. Even more than those in formal employment - administrators, teachers, nurses, transport officials and others – the unemployed, widows, ex-soldiers and the elderly will need continued and increased ‘state’ financial support. Maintaining a monetary economy that can deliver cash assistance to those dependent on it must be a high priority on the list of immediate tasks.

If we look beyond international law, UN sanctions and the Oil for Food programme, we must ask what is best for Iraqis. My guess is, that Iraq’s coffers are empty, both in the North and in Centre/South Iraq. This guess rests on four presumptions: first, that Iraq spent considerable extra cash on preparations for the war. Second, that illegal trade has largely ceased, for the Kurds for many months, but also for the Centre/South recently, on which public expenditure relies to some extent. Many Kurdish public employees have not received any or full payment of their salaries. Third, in the Centre/South, printing money was the way of paying salaries – ahead of inflation catching up, supplemented by free food rations and other price controls. This is unlikely to continue, because of political desires to introduce a new currency, possible looting of central bank reserves (by Ba’th party members and the public), and because reintroducing a system of complex benefits may be beyond ORHA’s competency. Finally, the tax base is almost non-existent as far as publicly available information reveals – neither domestic income nor value-added tax, nor tariffs from trade after numerous free trade agreements with regional states fill the state’s coffers.

Therefore, maintaining payment for public sector workers as well as pensions and social welfare benefits are imperative in the immediate short term. One million disabled Iraqis are receiving a nominal pension, while others are receiving the Anfal and Saddam pension. Plans to use Iraqi soldiers in reconstruction have been attributed to ORHA and its intellectual progenitors in the Pentagon. Cash-for-work programmes could be a short- to medium-term option, especially if the food ration becomes more targeted and local produce becomes more readily available in the markets. Whether priority is given to Iraqi soldiers or to the many unemployed is a question of policy preference – ultimately both groups will have to be kept in bread and butter. Even a down-sized Iraqi army will likely be several hundred thousand strong with a job in hand compared to the unemployed with no job in hand.

Supplies

Iraq has placed existing contracts for importing non-emergency goods, which the UN is now mandated to prioritise and supply under Oil for Food. These contracts are worth around $10bn in UN escrow accounts placed by Iraq for import. Around one fourth of these are for food and medical supplies, but an assessment for the current needs in Iraq found that only $1.6bn worth of contracts were appropriate and could be prioritised. A further $2.2bn in UN escrow accounts are ‘unencumbered’, i.e. in allocated and unspent. UN authority is restricted to medicine purchases. After the looting that followed liberation many hospitals reported supply shortages with an increase in caseloads. There is increased urgency for the military to allow the ICRC, WHO, Unicef, Merlin, MSF access to these hospitals with their pre positioned supplies. Save the Children is only awaiting military clearance to land the first aid flight with health kits into Iraq.

The UN agencies have an additional humanitarian mandate to work where the need arises – if and when occupation forces do not or cannot dispense of their obligations although the UN role could be much expanded if the US/UK were willing to do so. The UN has plans in the drawer for running and rehabilitating basic services. It is arguably much better placed than the US/UK forces to carry out these plans. In the medium term, until a recognised Iraqi government comes into being, there will be a gap of authority and mandate between ORHA and the UN. The UN cannot hand over escrow account funds to an occupying force. Indeed, OFFP currently only mandates the UN to renegotiate existing contracts and spend ‘unencumbered funds’ on medicines – not to plan for future needs, including salaries and pensions.

Iraq’s oil production after domestic consumption has gradually declined over the past years to under 2m bpd. Although no oil revenue could be used towards paying for public services under sanctions, the import of goods, rather than foreign exchange reserve, functioned as a stabilising factor against Dinar inflation, which was still running at around 100% recently.

How much can the Iraqis do themselves? In North Iraq, there is little local production, although telecommunications and other services have expanded over the past years. More than half of Iraqi Kurds are poor; over one fifth are destitute. They are unemployed or live off meagre earnings as civil servants, subsistence farmers, street vendors and drivers. Only traders, UN and NGO employees do well. Not more than a dozen large factories exist, mainly in food processing and construction materials. The average Iraqi Kurdish family comprises between six and seven members. Around half the population is under 15. In Centre/South Iraq, unlike in the Kurdish parts, the economy has a banking system, some loans are available for businesses, but inflation is running high. Centre/South Iraq has some intermediate-goods production, such as medical supplies, chemicals and petrochemicals, tanneries and the like. These factories appear to be national, one-of-a-kind in the country, with little competition and domestic sourcing.

Reconstruction needs in Iraq are vast. The electricity, water and sanitation and oil industry sectors are said to require around $60bn over the next 3-5 years. Some put the figure much higher. There will be significant need in the education and health sector for construction and training. At least 5,000  classrooms are lacking and over 8,000 schools needed repairs before the current conflict. Existing food import needs run at a minimum of $200m per month. After the harvest, part of that could be substituted with local produce. If Iraq produces the same 2.2m metric tons (MT) of wheat in 2003 that it did in 2002, this would suffice for about six months and three weeks.[5] However, at least in North Iraq, domestic wheat is cheaper than OFFP-imported wheat by 70%-100%.[6] WFP estimates that 80% of the household income is constituted by the food ration. In north Iraq, the market value of the food ration in December was about $4.50, or about $30 per household of 6-7 persons. If wheat and all other ration items could be purchased locally for 6.75 months for 4.15m households the bill would come to over $840m – cheaper than imported rations of over $1.35bn for the same period. However, it will not be possible to produce all ration items immediately, locally and in sufficient quantities. Additional costs will be incurred for administrative tasks of managing and targeting a localised distribution system. Yet this amount of around $1bn would be injected into the local economy – a significant growth potential for GDP and personal incomes for the initial phases of reconstruction.

Command and control

Moving Iraq away from a command economy, where centralised control in Baghdad and in the UN Security Council in New York presides over the livelihoods of all but the most fortunate and connected Iraqis, requires careful management of the transition. Before this occurs, control over immediate humanitarian assistance will remain a contentious issue between the UN and international NGOs on the one side, and USAID together with the US/UK military and private companies on the other.

Who should initially be in charge of providing food and medicine and water – material goods, and electricity, running water and sanitation, health and electricity – the services – to Iraqi families? The extent of the Oil for Food programme, which has inputs into all of these sectors, suggests that there is only a fine line between provisions of humanitarian assistance, strictly speaking, and running of services, where decisions about payment and management have wider consideration beyond the need of the recipient. A clear separation between humanitarian assistance and civil services will be difficult to achieve in Iraq.

There is little question that with around 250,000 troops and effective supply lines the military appears well-placed to carry out such duties. But those impressive numbers quickly dwindle when considering the security duties of the occupying powers:  border security and internal law and order. The use of military equipment and personnel would also make military aid (that is, so-called humanitarian aid conducted by the military) a hugely costly enterprise. More important is the fact that the military will only concern itself with aid to the villages formerly under Ansar al-Islam control on the Iranian border if that is politically convenient. Or, for example, the return of refugees may not be politically convenient although their needs will have to be met. In short, the military is extremely badly placed to be the impartial judge of humanitarian need. Military skills are not those required in humanitarian assistance, and costs involved in a military hearts and minds campaign outstrip those of traditional actors by far.

Humanitarian assistance requires an impartial assessment of needs and safety and access to respond to need. In Iraq, direct, supply-driven assistance may be shorter than initially feared, largely because most of the population has access to service infrastructure, albeit in a damaged or dilapidated state. Nonetheless, water, food and electricity repairs will have to resume immediately and can only be led by the UN – with NGOs filling gaps in the overall effort. Only UN agencies have the funds, expertise, plans and mandate to carry out these tasks in a co-ordinated manner at present. The UN is necessarily involved through OFFP and the sanctions regime. Some outside co-ordination and framework of control is required, because of difficulties in local sourcing for example.  This is why such a task cannot be carried out in the next three weeks solely by an Iraqi co-ordinating body.

Managing the transition will involve more actors. The UN could facilitate public sector and pensions and welfare payments if given the right mandate. The UN has experience in peacekeeping, civil policing and constitutional reform. The US government’s Pentagon and State Department are attempting to take over all of these functions without revealing a central plan,  and delegating implementation matters to Jay Garner of ORHA. The UN is committed to similar goals of development and human rights throughout the world. Spokespersons for the US/UK have so far spoken only of liberation, freedom, wealth redistribution and capitalism. Humanitarian assistance without needs assessments will remain stop-gap measures. Service rehabilitation without household economy studies will likewise miss key information. Development strategies without a coherent cross-sectorial approach often do not bear fruit. Coherence is a key ingredient in managing this transition; framework support for an emerging Iraqi polity to focus on these issues will also be helpful. There are a few reasons the UN is better placed to lead than coalition forces/governments.

• The UN will already be involved in humanitarian assistance, and this will be on a large scale and involve certain infrastructure rehabilitation as well.
• The UN will necessarily be involved in handing over existing OFFP contracts to an Iraqi government in a post-sanctions scenario. The UN has consulted, studied and implemented Iraqi development plans to a limited degree as per mandate 1997-2003.
• When the UN contracts private business the process is to some degree transparent and accountable.
• Iraqi citizens would have a voice and stake in the UN-led process, whereas they would only have a stake in a US-led process.
• The UN leaves when it is done, because it depends on the renewal of mandates. This would not be the case with a US/UK military force enmeshed in upholding US (and other) business interests.
• The IMF can only involve itself in Iraqi public finances and debt restructuring if there is a UN mandate for overseeing the emergence of such a new Iraqi polity.

The US/UK could fulfil many, but not all, of these UN functions if the UN co-operated with its forces and administrators. According to its mandate, however, the UN cannot subcontract to one or two of its member states occupying a foreign country without assent. The UN, on the other hand, could provide legitimacy to Iraqi stakeholders and regional governments, ensure external stability and internal safety through a US/UK-led and regional peacekeeping force, provide a guiding framework for a political transition process, and co-ordinate humanitarian assistance and basic service rehabilitation and poverty alleviation – if supported by the US and UK governments.

The UN system is often incoherent, yet interdependent and, most of all, slow. The Secretariat has to be accountable to its member states who may not subscribe, for example, to UNDP’s vision for Iraqi reconstruction, or to a possible compromise reached in the Council that relegates UNDP to fixing electricity lines. The war was not sanctioned by the UN in its own, organisational, view and in that of the majority of member states. Under pressure, the UN has disbanded a post-conflict working group under Deputy Secretary General Louise Frechette. Only this past week has Kofi Annan taken to the road to negotiate a deal for the UN. The upshot of this situation is that on the humanitarian side with limited infrastructure rehabilitation as necessary or as per OFFP mandate, the UN needs to get immediate access to Iraq. It is ready for that. A role between ORHA, the UN, and the establishment of an IIA may well take longer. Perhaps it is not the worst thing for Iraqis and others to take a long view of how the political process of transition should be managed. But how will Iraqis receiving humanitarian handouts, be able to voice their concerns over priorities on the ground when US companies are implementing $3 billion worth of reconstruction contracts? 

 

Home - Mission - News - Opinion - Publications - Links - Search