Iraq's Oil-for-Food Program: A Lifeline under Sanctions

Strategic Insights -

Iraq has sold more than $20 billion worth of oil under a restricted sales program to meet its citizens' most urgent needs since December 1996, with an additional $13 billion raised in recent months. The influx of funds has enabled Iraq to meet essential needs, including food, medicines, and basic educational and agricultural supplies. Despite some delays, the money has rolled in, inflated by record oil prices, with purchases expanding beyond food and medicine.

Key Takeaways:

  • Iraq has raised over $20 billion for food, medicines, and other vital supplies under the United Nations oil-for-food plan.
  • The program has allowed Iraq to sell oil without a ceiling on exports since December, resulting in billions of dollars in additional imports.
  • Despite some persistent problems, the oil sales program has provided essential goods to 24 million Iraqis, including a rise in caloric value of basic foods and introduction of dairy products.
  • The program has seen significant improvements in health care, including a 46% increase in patient attendance and 90% of essential drug needs met in hospitals.
  • The United Nations has expressed concern over delays in the approval of contracts by the Security Council sanctions committee, which has held up hundreds of millions of dollars.
  • American diplomats say 85-90% of Iraqi purchases go through, despite concerns over potential secret arms programs.
  • Contractors have been vague, and the Iraqis have not always signed and submitted contracts expeditiously, contributing to delays.

Statistics:

  • $20 billion worth of oil sold by Iraq under the restricted sales program since December 1996.
  • $13 billion raised in recent months under the program.
  • 24 million Iraqis provided with essential goods through the program.
  • 46% increase in patient attendance in health care.
  • 90% of essential drug needs met in hospitals.
  • 85-90% of Iraqi purchases go through despite concerns over secret arms programs.
  • $600 million increase in spare parts for Iraq's disintegrating oil industry approved by the Security Council.
  • 1,000 contracts held up by the Security Council sanctions committee.

Sources:

  • A report sent by Secretary General Kofi Annan to the Security Council.
  • United Nations agencies working in Iraq.
  • Independent experts hired by the United Nations.
  • American diplomats.
  • Security Council sanctions committee.