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| LIFTING SANCTIONS | |
 May 9, 2003  |
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As the U.S. calls for an end of economic sanctions on postwar Iraq, former U.N. Assistant Secretary General Denis Halliday and former Canadian Ambassador to the U.N. David Malone discuss the international body's role in rebuilding Iraq and the question of how to utilize Iraq's oil revenue. Background report
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And welcome to you both, gentlemen. Before we get into the politics of getting this thing passed, let's flesh it out just a bit more. David Malone, what would lifting economic sanctions mean for Iraq? For everyday Iraqis? |
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| Making the case for lifting sanctions | |||||||||||||||||||||||||||||
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It also eliminates, to a very large degree, under the American scheme, the U.N. role of oversight in Iraq, and will give the occupying powers and those Iraqi interim authorities they're able to bring together, the controlling hand of legally, as well as in fact, on the ground MARGARET WARNER: Denis Halliday, would it also mean though that if you were just an Iraqi businessman and you wanted to beef up a business and import computers, whatever, you would be free to do so? There wouldn't be any restrictions on what you could obtain from abroad, other than weapons? DENIS HALLIDAY: Yes. That is the clear implication -- that a normal economic program will emerge. The private sector hopefully will grow, which is essential in Iraq. There is a huge over-dependence on the civil service, the public sector. So I think we will see the economy be revived. And that's terribly important. Of course there are some questions that need to be answered. I mean, debt relief, to me, is one of the key issues for a successful revitalization of the economy. MARGARET WARNER: And there is no mention of debt relief in this resolution. DENIS HALLIDAY: No, exactly. But as David Malone says, when you lift sanctions, it gives Iraq almost 100 percent of oil revenues. And, until recently, they've received less than 70 percent, but I see 5 percent is still, or thereabouts, is still going to be set about for reparations to Kuwait. But, nevertheless, the revenue will be enhanced and opportunity for procurement by the ministry of trade and other aspects of government will be normalized. This is healthy. This is the way it should go. |
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| U.S. control over Iraqi oil revenues | |||||||||||||||||||||||||||||
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DAVID MALONE: Not a great deal at the outset. The role of that board could grow. But in the initial phase, really all decision making will lie with the Americans and, to a lesser extent, the British. As the Iraqi interim authority, whatever shape it takes, grows up so to speak, becomes capable of exerting some degree of power in Baghdad, I suspect it will have a much bigger role than the advisory international authority, the role of which is quite vague but helpful, of course, because we'll know, particularly if the audits are made public, and there's some public reporting capacity of the monitoring, what is going on, how the money is being spent; and that Iraq's oil revenues are being appropriately spent on priorities for the Iraqi people. I think there's been a suspicion all along that Iraqi oil will be used for nefarious American objectives. So having a monitoring board is very smart. It will go some way towards reassuring all sorts of actors internationally, that U.S. and British intentions are good. MARGARET WARNER: How do you see that, Mr. Halliday? Do you think the way this is set up will alleviate or fuel the accusations that the war was all about giving the U.S. and the British control over Iraqi oil?
And the same applies to weapons of mass destruction. We also need to see an audit capacity there to make sure that, in fact, we do indeed clear these weapons, if there are any in Iraq from Iraq and destroy them or whatever else is required. |
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| How will the U.N. Security Council vote? | |||||||||||||||||||||||||||||
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MARGARET WARNER: So David Malone, put on your vote counting hat now and tell us what you think the prospects are that the U.S. will get this through. DAVID MALONE: Well, I spoke earlier today with a couple of members of the council. Apparently the session at which the American text was formally presented was very low key. There were signs that the Russians and the French had serious questions; that they would be coming forward with amendments, particularly to strengthen the U.N. role. I think that the Russians are still very reluctant to roll over all together without anything further on weapons of mass destruction, but the elected members of the council, who froze under the pressure from the United States on the one hand, France on the other, a couple of months ago, now seem to be interested in moving ahead as the U.S. has emphasized, not looking back at the arguments of the past. They recognize that the U.S. and the British are in control on the ground; that the responsibility for making things work for the Iraqis is theirs.
So the French and the Russians, I would argue, are in a relatively weak position. They can hold this up and gain improvements from their point of view, but I don't think that can last too long. For one thing, both countries are expecting President Bush in early June. Both will want the president to come. And I don't think they will want to generate a great deal of unpleasantness in the run-up to those visits. MARGARET WARNER: How do you read it, Mr. Halliday? DENIS HALLIDAY: Well, the ambassador is much closer than I. But having heard what he said, I hope that doesn't mean that the assistance fund of the Iraqi government is misused. I mean that money is Iraqi money. There is no assistance per se. And in fact, the immediate repair of war damage that we see in Basra and in Baghdad and Mosul and elsewhere is the responsibility of the United States and Britain under the Geneva Conventions and Hague conventions. That should not be Iraqi money. That money should financially provided by Britain and the United States. Let's hope the fund is not misused. MARGARET WARNER: How do you read the prospects for getting it through or whether you think the U.S. is going to have to make further concessions? DENIS HALLIDAY: Well, I'm hoping there will be some concessions but I don't read the situation as well as the ambassador. I think there is a need for recognition that disarmament needs audit, that debt relief is required, that the U.N. coordinator must have a meaningful role and that he must be allowed to bring in the technical agencies of the United Nations system, have them properly funded, not from Iraqi resources but elsewhere so they can bring in expertise like the World Health Organization, like the food and agriculture, like UNICEF for example for children. These are important entities. They have good work to do. They'll need funding; they'll need support. These are things that need to go through. So I'm hoping that the member states will get over their differences and think only of the best interests of the people of Iraq, who have had a very difficult time, let's face it, for what, 13 years? |
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| Does the U.N. have a role in postwar Iraq? | |||||||||||||||||||||||||||||
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DAVID MALONE: Well, absolutely. The U.N. is cut out of any decision-making role. Its role can doubtless be enhanced in the negotiations to come. More positive verbs can be used, some adjectives thrown in. But the key is that the U.N. isn't able to control decisions on the ground, particularly affecting political life. Now I would argue that actually the United States may be making a mistake here. While it indeed needs to set up an interim Iraqi authority with the Brits, the longer term Iraqi government to emerge as the Americans and Brits withdraw, which needs to be credible in the Arab world and beyond, which needs to be legitimate within Iraq, I think would greatly benefit from U.N. involvement; indeed, a U.N. lead. But clearly in Washington, decision-makers aren't in the mood for that at the moment. That's been very clearly telegraphed in this message. I don't think the French and the Russians, in essence, will be able to turn that around. But I think, sadly, there it is a mistake. And the U.N. should be playing more of a role on the political future of Iraq. It did a very good job on Afghanistan. Kofi Annan's representative there -- Lakhdar Brahimi -- is still the linchpin on the more positive political developments in that country, working with President Karzai. And so I think there, Washington may be being short sighted and cutting off its nose to spite its face. MARGARET WARNER: Mr. Halliday, do you see any potential deal breakers or things that the French or the Russians would really stand firm on, for instance, either getting all their former contracts under oil-for-food honored or maybe something having to do with getting U.N. weapons inspectors back in?
MARGARET WARNER: Most of those were with the Russians and the French? DENIS HALLIDAY: Exactly. $1.5 billion is Russian, I think $300 million is French. So they're going to get that piece of the action, but I think they're not going to have such an easy time on the big contracts they signed with Baghdad many years ago for oil exploitation and the big profit making areas. That may be much more difficult and I'm sure that is an area that they are concerned about. MARGARET WARNER: All right. Denis Halliday and David Malone thank you both. DENIS HALLIDAY: Thank you. DAVID MALONE: Thank you. |
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MARGARET
WARNER: For more on the U.S. proposal and its prospects for winning
Security Council approval, we turn to David Malone, who was the Canadian
ambassador to the United Nations from 1992 to 1994. He's now president
of the International Peace Academy, a conflict resolution organization
in New York City; and Denis Halliday, who was assistant secretary general
of the U.N. from 1994 to '98. At the end of his tenure, he also served
as the on-the-ground humanitarian coordinator of the oil-for-food program
in Iraq.
DAVID
MALONE: Well, first of all, it would mean that Iraqi oil could be pumped
again, the revenues from that could be rapidly available for the purchase
of food, medical supplies, everything else that Iraq needs.So that will
be very welcome to Iraqis.
MARGARET
WARNER: David Malone, this resolution, explicitly, as we just laid out,
gives the U.S. and Britain the authority over both oil sales and then
spending out of this account made up of the oil revenues. But there
is this advisory board with representatives from the U.N. , the IMF,
and the World Bank. How much real leverage or authority does that give
the international community over this process? 
DENIS
HALLIDAY: Well, a great deal depends on how the oil production and oil
sales is handled by the occupying forces, by Britain and the United
States, and what role the advisory board plays. As we've just heard,
there is an audit capacity, which is certainly very important and the
information of that audit must be made public to make sure we do an
honest job and that the people of Iraq get the best possible prices.
It's a competitive process and the revenues go into the treasury, central
bank in Iraq. I mean, all that must be above board and proper. 
And
I think they're very reluctant to stand in the way. The problem for
the French and the Russians, is if they're seen to be obstructionists
on this, the Americans will be able to say, well, where is your interest
in the Iraqi people? You have claimed to be interested in them all along.
Or are you simply interested in your own economic and geostrategic position
in the Middle East?
MARGARET
WARNER: How do you read, Mr. Malone, the role for the U.N. ? There's
a lot of language about what the U.N. is asked to do other than coordinating
the relief agencies. But most of the verbs are things like encourage
or advise or, you know, setting up of say a police force. But they don't
seem to be given a primary role. How did you read it? 
DENIS
HALLIDAY: On the first issue you mentioned, in fact, my understanding
is that in the next four months, the oil-for-food will be wound up.
But during that period, all of the contracts outstanding will be delivered.
That's very important for the people of Iraq, who have had food supplies,
which are now running out, clearly. That's really urgent.