Oil Prices

March 9, 2000

Oil Prices in the Sanctions Balance

 By Gwynne Dyer

 United Nations Secretary-General Kofi Annan has publicly told Hans von Sponeck, until recently the U.N. official responsible for coordinating humanitarian aid to Iraq, to shut up about the horrendous impact of sanctions on that country so long as he is drawing a U.N. paycheck. However, that will come to an end pretty soon – and probably so will sanctions. Only it will be Western concern for oil prices, not for the plight of ordinary Iraqis, that finally ends the sanctions.

Mr. Von Sponeck resigned from his post in mid-February, saying he could not stay because he believed that the sanctions were unfairly harming Iraq’s civilian population. The U.S. and British governments, the most enthusiastic supporters of sanctions, were furious: “I think an article in the Iraqi press praising his approach to his work is ample evidence of his unsuitability for this post,” said James Rubin of the State Department. But Mr. Von Sponeck’s predecessor, Dennis Halliday of Ireland, walked out of the job two years ago saying exactly the same thing.

It’s almost 10 years since the United Nations imposed a total ban on trade with Iraq after Saddam Hussein invaded Kuwait. After the liberation of Kuwait, the trade sanctions were extended until all of Saddam’s nuclear, chemical and biological weapons had been found and destroyed. Since that task was never satisfactorily completed, the sanctions were never lifted – and Iraq began its long descent into poverty.

The sanctions have utterly destroyed the Iraqi middle class. Women have been driven out of the work force as jobs disappeared and as the formerly irreligious Saddam decided that his best chance of riding out the storm was to wrap himself in the green banner of Islam. Worst hit were the children: A report by the U.N. Children’s Fund estimates that the death rate for Iraqi children under age 5 rose from 56 per thousand births in 1984-89, before the Gulf war and sanctions, to 131 per thousand in 1994-99.

There is disagreement about how much of the damage to the health services actually stems from U.N. sanctions and how much from Saddam’s choice to spend his limited funds on his own priorities: weapons, palaces and rewards for his key supporters. Some even accuse him of deliberately letting children die in order to generate anti-sanctions propaganda.

But the larger question is what sanctions are really for, given the growing evidence that total elimination of Iraq’s weapons of mass destruction was simply not in the realm of the possible. The U.N. Special Commission charged with tracking down Saddam’s hidden weapons was withdrawn in November, 1998, with Iraq claiming that some of the agents were Western spies and the Western powers saying that Saddam was systematically hindering the commission’s work. (Both accusations were true.)

As a face-saving measure, the United States and Britain began regular attacks on Iraqi military targets: During 1999, they conducted around 15,000 sorties over Iraq, dropping thousands of tons of bombs. The United States claims 200 military installations have been destroyed; Iraq claims that 200 civilians have been killed. (Again, both allegations are probably true.) But behind this pantomime, the West has started to move toward ending sanctions.

The goad has been oil prices, which have soared from only $10 a barrel in late 1998 to more than $32 this week, mostly because the Organization of Petroleum Exporting Countries has succeeded in restricting its members’ output. The best way to persuade OPEC to open the taps and bring the price back down into the $20s is to threaten it with a flood of Iraqi oil on the market. So in December the U.N. Security Council passed Resolution 1284, offering Baghdad an end to all sanctions in return for a new arms inspection mission in Iraq.

The new mission, the United Nations Monitoring, Verification and Inspection Commission, would be a toothless body that posed no real threat to Saddam’s hidden weapons. It is mainly another face-saving device for the West, as is the provision that the embargo will only be lifted if a 120-day inspection turns up no hidden weapons. But Saddam immediately rejected the package. He smells blood now, and he wants a clearer victory.

As oil prices kept on rising, Iraqi Deputy Foreign Minister Nizar Hamdoon warned in late January that his country might stop exporting oil entirely. Maybe Saddam is overplaying his hand, as he has in the past. But when it’s election year in the United States and the party in power is afraid that rising oil prices will kill the economic boom, I’d put my money on Saddam.