By Anne Penketh
February 25, 1999
A humanitarian effort that lets sanctions-hit Iraq export oil finance badly-needed supplies cannot continue in its present form because of a funding shortfall, a senior United Nations official said Thursday.
Benon Sevan, the official in charge of implementing the oil-for-food program, told reporters after briefing the U.N. Security Council that council members needed to find "alternative methods" to finance the plan. "All members of the council, irrespective of their positions, have to understand that the program cannot continue the way it is now," Sevan said.
Sevan briefed the 15-member council during a closed session which focused on the latest three-monthly report on the oil-for-food program's implementation by U.N. Secretary General Kofi Annan, submitted to the council on Tuesday.
Annan said that for the current six-monthly phase, which started on Nov. 26, the revenue shortfall "may reach some $950 million" out of a total $2.75 billion which was to be set aside for the humanitarian supplies. The Security Council currently authorizes Iraq to export up to $5.2 billion in oil every six months to pay for the badly-needed humanitarian supplies.
But because of depressed oil prices and the problems of the Iraqi oil industry, the current six-month phase is projected to result in only $2.9 billion, Annan said.
Washington has proposed totally lifting the ceiling on the oil-for-food program, introduced after sanctions were imposed on Iraq following its 1990 invasion of Kuwait. But Sevan said Thursday that such a proposal was "simply an academic exercise, unless bold, imaginative and pragmatic alternatives for investment in Iraq's oil industry are considered by the council."
Sevan's briefing comes as a Security Council panel, of which he is a member, is reviewing the humanitarian situation in Iraq before making recommendations to the council by mid-April.
Sevan, a Cypriot national, warned the council that even when a total $600 million worth of spare parts for the oil industry were delivered, no significant impact for oil exports was expected before March 2000. "Therefore it is time for the council, and governments concerned, to start looking for alternative methods of financing the requirements for the oil industry in Iraq in order to increase the output and exports as speedily as possible," he said.
Annan's report also blamed the Iraqi government for some of the program's problems. He said that "the quantity of medical equipment in warehouses is alarmingly high," noting that medicines and medical supplies worth about $275 million dollars had accumulated in Iraqi warehouses. He said that figure represented "more than half of all supplies that arrived in the country" since the program began in December of 1996.
U.S. Ambassador Peter Burleigh, during the council session, accused Iraq of a "premeditated act" against the Iraqi people, by holding up the supplies' distribution, diplomats said. But French Ambassador Alain Dejammet argued that Iraq needed trucks, computers and improved rail links in order to improve distribution.
In a letter distributed to the council -- the first such detailed and substantive contribution according to Sevan -- the Iraqi government said that products had accumulated in the warehouses because of missing parts or a lack of documentation.
Council permanent members France, Russia and non-permanent member Malaysia called during the briefing for the lifting of the oil embargo imposed on Iraq after the 1990 invasion of Kuwait, the diplomats said.
