[Article] U.S. wants end of U.N. control of Iraq's oil

Victor

This piece reminded me of something I saw in Air Forces Monthly recently. If all the sanctions are lifted, Iraq qill be able to re-arm (military imports expected to rise from $1.5bn to $3bn). I wonder who the main suppliers will be? :rolleyes:
http://home.eircom.net/content/reuters/worldnews/614566?view=Eircomnet

U.S. wants end of U.N. control of Iraq's oil
From:Reuters
Friday, 25th April, 2003
By Evelyn Leopold

UNITED NATIONS (Reuters) - After extending until June 3 emergency arrangements for Iraq's oil-for-food plan, the U.N. Security Council faces contentious U.S. demands that U.N. controls be struck entirely from the multibillion-dollar plan.

President George W. Bush has said several times he wants the sanctions, imposed in 1990, lifted entirely and diplomats said the United States was crafting a resolution that would guarantee that proceeds from future oil sales be held in trust for an interim Iraqi authority rather than the United Nations.

The consequences of any resolution would be to free oil sales and give the United States firm control over contracts and expenditures until an Iraqi government is in place, they said. Without Security Council endorsement, no oil firm will sign a contract with an entity that has no legal standing.

On Thursday, the Security Council renewed emergency procedures, first instituted on March 28, for the oil-for-food plan until June 3, the end of the program's current phase.

Currently, the program has some $14 billion (8.8 billion pounds) in funds. The council authorised U.N. Secretary-General Kofi Annan to expedite emergency health and food supplies to Iraq. Some $400 million worth of goods are en route to Iraq and an additional $130 million are expected by June 3.

The oil-for-food program, originally designed to ease the impact of the sanctions, puts Iraq's oil revenues into a U.N. escrow account, which pays suppliers of food, medicine and a host of civilian goods that Iraq ordered.

Russia this week floated its own informal plan that would leave the United Nations in firm control of Iraqi oil revenues until a new government was recognised. France suggested that sanctions be suspended but not lifted immediately and that the U.N. oil-for-food program be phased out gradually.

To assuage fears that the United States and Britain are grabbing Iraq's oil, the United States plans some kind of international oversight, but not from the United Nations, diplomats said.

But doing away quickly with 16 resolutions the United States helped craft over the last decade is bound to engender opposition among a majority of council members and force Britain again into the role of seeking a compromise.

Adolfo Aguilar Zinser, Mexico's U.N. ambassador and the current council president, said on Thursday most members did not want the oil-for-food program stopped abruptly because 60 percent of the Iraqi people were entirely dependent on it.

"We feel that it should be phased out gradually because we cannot terminate a program that has such significance for such a large proportion of the population," he told reporters.

WORLD BANK, IMF MAY MONITOR OIL FUNDS

The Washington Post, in its Friday editions, said Bush administration advisers on Wednesday adopted the Pentagon's proposal for eliminating all U.N. controls over Iraq, rather than the State Department's preferred step-by-step approach.

Distributions would be monitored by the World Bank or the International Monetary Fund. But the Post said the Iraqi Central Bank would be in charge of profits from oil, some of which would be spent on reconstruction designated by the Pentagon-run Office of Reconstruction and Humanitarian Assistance or by the Iraqi Interim Authority.

The U.S.-drafted resolution would also ask Annan to appoint a special representative, who would work with American officials in Baghdad but apparently have little power. Annan so far has refused American requests to do this, arguing that the Security Council would have to make a decision and Washington would have to spell out clearly what the envoy would do.

France on Wednesday moved to meet the United States half way, saying that sanctions should be suspended immediately and lifted entirely only after U.N. arms inspectors certified Iraq no longer had weapons of mass destruction.

But the United States does not want the U.N. inspectors back, blaming them for not coming up with a "smoking gun" that would have given ammunition to the war plans.

Russia circulated to a few council members an informal draft resolution that would give Annan the right to "sign new contracts for the export of Iraqi oil and purchase of humanitarian goods" providing that those supplies were not covered by contracts signed by the previous Iraqi government.

Moscow's proposal was an apparent attempt to keep intact obligations of Saddam Hussein's government, which had favoured Russia in oil and goods contracts.

shotamoose

In the absence of any kind of government or authority in Iraq (Jay Garner plus a few dozen bureacrats does not count) keeping oil revenues in the control of the UN would seem fairly sensible. Otherwise, how could you guarantee that the money would go where it is most needed?

Distributions would be monitored by the World Bank or the International Monetary Fund

That's just bizarre. It is not the role of the World Bank or IMF to divvy up oil revenues or distribute food or medicine or even to 'monitor oil funds'. Why would anyone want to take the operation of the Oil for Food programme away from the UN's staff, who have been handling it perfectly well for years in Kurdish Iraq, and give it to the IMF and World Bank, who have no experience or capability to run it? Because the US is the only country with a veto on the executive committees of the IMF and World Bank, because they are run on a one-dollar-one-vote rather than a one-country-one-vote basis.

bonkey

Originally posted by shotamoose
Why would anyone want to take the operation of the Oil for Food programme away from the UN's staff, who have been handling it perfectly well for years in Kurdish Iraq, and give it to the IMF and World Bank, who have no experience or capability to run it?

Because the UN is a defunct and disfunctional organisation which time and time again has shown its pointlessness?

(According to the US stance anyway).

jc

Sparks

I'd be more inclined to think that it's so that there are no obstacles to taking a small percentage (say 40% or so :rolleyes: ) to help repay the costs of the war to the US ...

Besides, this (taking control of the OFF program) was pretty much covered by the US's statement when it seized $1.7 billion of iraqi assets in the US, placed them under the personal care of the Treasury Secretary and then informed other nations that not doing the same would put you on a number of US blacklists, including "people we don't let use the US banking system" and "people we accuse of money-laundering".