UN Sanctions Devastate Iraq's Isolated Economy Hunger Is Increasing, but Baghdad Regime Is Buffered by Hidden Assets, for the Moment

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ALMOST three years after the international community imposed trade sanctions against Iraq in punishment for its invasion of Kuwait, there are signs that the government is coming to share its citizens' desperation to see the ban lifted.

Government officials say confidently that Iraq's economy can withstand indefinitely the ban on all Iraqi exports and all imports except food and medicine.

But Iraq's agreement July 19 to allow long-term UN monitoring of its weapons program suggests a deeply felt desire to find a way out of its economic stranglehold.

With the true size of Iraq's hidden foreign reserves known only to President Saddam Hussein and a handful of his most trusted advisers, no one can tell how long those undiscovered, unfrozen assets can keep the Iraqi economy afloat and the people alive.

"We will survive," declares Trade Minister Muhammad Mahdi Saleh, who points to such grand projects as the construction of a new twin-level bridge over the Tigris River in Baghdad as "a sign to tell the West that we are a country that will never die."

After several standoffs, Baghdad has agreed to the installation of cameras at two missile-testing sites. That opens the door to negotiations on issues such as a limited resumption of oil exports.

Baghdad's move to cooperate with the United Nations comes at a time when the vast majority of Iraq's 19 million people are at the end of their tether. Wages may have doubled over the past three years, but the increase is meaningless when the price of wheat flour, for example, the most important staple of the Iraqi diet, has risen 355-fold and cooking oil has gone up 106-fold.

Begging boys, previously unheard of in this oil-rich state, are a common sight. Government employees drive taxis or hawk anything they can sell, and women flood jewelry shops to sell their traditional gold bracelets.

Most people spend every dinar they make just to eat. "I buy nothing but food, and it is still not enough," says Hamed, a middle-aged man standing disconsolately in front of a vegetable stall at the Doura market in Baghdad. "I make do with the clothes I have always had, and I still can't afford to buy a fish for my children."

Government rations, costing just 1 percent of their market values, provide each family with the bare necessities of rice, flour, sugar, tea, and vegetable oil.

Those rations "are all that stand between the Iraqi people and catastrophe," says Rudy Joseph, who last month led a UN Food and Agriculture Organization (FAO) mission to estimate Iraq's food needs. The rations offer only 50 percent of a person's nutritional needs, and Iraqis are enduring "persistent deprivation, chronic hunger, endemic undernutrition ... and widespread human suffering," the FAO said. …


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