One man’s sanctions is another’s gold pot

The UN sanctions on Iraq are a mess. They don't stop the Iraqi government and elite people with connections from exporting oil and importing whatever they like - even new cars. They do make ordinary people starve.

The sanctions were imposed nearly eight years ago  after Iraq invaded Kuwait in August 1990. The Iraqis are a determined and imaginative bunch and you don't require too much investigative reporting to see their sanctions busting at work. I saw a steady stream of oil tankers and freight trucks moving both ways through the night along the 800 kilometres of desert highway between Amman in Jordan and Baghdad. I haven't made it to any shops in Baghdad yet to check out the shelves but I've noticed that the traffic cops have shiny new cars.

But it's equally obvious how ordinary people are hurting. I was standing in the entrance of the Information Ministry this afternoon after I arrived, asking how to change money and being told the deal on hiring a driver by the day, when a woman in a dusty green robe wandered in begging for money to feed her children.

You can see that the sanctions have distorted the whole economy - without actually making it collapse. Even with the sanctions-busting, exports are still way down on pre-war levels so nobody in Iraq is earning much foreign currency. Nobody outside Iraq wants Iraqi dinars, so the result is that the Iraqi dinar stands at 1,300 to the US dollar. If you're earning 3,000 or 4,000 dinars a month, which is a pretty reasonable salary, you can afford about two cans of imported Coke a month - although you can buy 300 litres of locally-refined petrol.

The result is that anybody with anything valuable to trade, and above all anybody with any kind of access to foreign currency, is surviving and possibly even making out like a bandit. An Iraqi journalist in London told me before I left that farmers in Iraq "are like kings" because they can sell produce such as chickens for a small fortune. Anybody from border officials to hotel staff who comes into contact with foreigners and can charge even a small bribe in dollars is a member of the priviligensia.

But if you're a city person with even a professional job, you're out on the street selling your jewellery, your books, anything to make money for food. I met two Jordanian women on the plane from London to Jordan who run an antique shop in Amman. They said middle class Iraqis often come to the shop offering family treasures which they've smuggled out.

There's still a lot I don't understand about the suffering, though. The sanctions have never covered essential food and medical supplies, so why are something like 30% of Iraqi children in Baghdad malnourished - the figure's from a UN Food and Agriculture Organisation study in 1995. Why can't government rations cover more than a third of people's food requirements, as the FAO estimates?

The official explanation has been that Iraq hasn't had enough foreign currency to pay for imports. The United Nations agreed an 'oil for food' deal under which Iraq was allowed to sell $2 billion worth of oil on the world market every six months to buy food, and the Security Council voted in February to increase this to $5.2 billion - but Iraq says that decay of its oil industry means it can only pump $4 billion's worth.

I'll try to talk to the United Nations and Iraqi officials here to compare their stories. But nothing they say can help the desperately unequal way these sanctions are hitting Iraqis - a man has a fistful of dinars because he speaks some English and drives foreign correspondents around all day, and a woman has to beg him for money because she's unlucky enough just to be ordinary.