www.scoop.co.nz Friday, 14 March 2003, 12:08 pm Press Release: United Nations

Includes Video Report: United Nations Secretary General Kofi Annan made yet another appeal today for united Security Council action in ridding Iraq of weapons of mass destruction as the 15-member body continued to wrestle over whether to give UN inspectors more time or to declare Baghdad in default by next Monday.

“I think what is important is that governments have to find a way of working together,” Mr. Annan said in reply to reporters’ questions at UN Headquarters in New York. “Regardless of how this crisis or the current issue is resolved, the Council will have to work together, and the Members States will have to work together to deal with the situation in Iraq, in the Middle East and in many other issues.”

The Secretary-General said he had spoken to British Prime Minister Tony Blair on Monday night and “he seemed very genuinely looking for a compromise and a way forward.” He also said Brazilian President Luis Inacio Lula da Silva had sent him a message proposing a summit meeting of world leaders, not necessarily Security Council members, who are also searching for “a compromise to get us out of this crisis.”

The United States, United Kingdom and Spain have introduced a draft resolution that presents Iraq with a 17 March deadline to cooperate fully with disarmament demands, which France says it will veto. France, Germany, the Russian Federation and other Council members have voiced opposition to action at this time and seek continued and enhanced weapons inspections.

After meeting with the Russian and British Ambassadors on Wednesday, Mr. Annan is holding a series of one-on-one meetings with the remaining Council members today. He is “urging them to continue their strenuous efforts to find compromise and exploring with them what might be done to further their objective to define a united position,” spokesman Fred Eckhard said at a press briefing.

The Council has scheduled closed-door consultations this afternoon to continue discussions on Iraq.

www.dailytelegraph.co.uk (Filed: 16/03/2003)

A war could have ruinous consequences for Western economies, but there are also rich pickings to be had for the oil majors and the construction industry. Mary Fagan and Edward Simpkins report

If Sheikh Yamani, the feted former Saudi oil minister, is to be believed, the imminent war with Iraq is all about oil.

Many people, including the American and British governments, fiercely disagree with Yamani's assessment, but what no one can deny is that the conflict could have enormous consequences for the price of oil and the world economy. 

Oil prices have already soared by almost 60 per cent since the middle of last year when fears that there might be war with Iraq began to crystallise. Last month crude oil prices in the US nudged $40 a barrel, a level not seen since 1991 in the aftermath of the Gulf War.

In America, the situation has been hugely exacerbated by a severe winter and a shortage of gas. But prices of crude in the UK have also soared above $30 and increased the cost to consumers at the petrol pump, with prices up by 4p a litre within the past few weeks.

The optimists in the market say that, assuming a quick and "clean" war, the oil price will go up further but then fall back rapidly when hostilities end, as happened after Iraq invaded Kuwait.

The doomsayers fear wider instability in the Middle East (and in particular in Saudi Arabia, the world's largest producer with an output of 8m barrels per day) could see prices clinging to $50 or more.

The experience of previous oil shocks in 1973/74, 1979/8 and 1990/91 shows the damage that can be caused to global economies. In this case, the big question is whether the aftermath of war will release Iraq's potentially huge reserves for world consumption. Or will Saddam Hussein wreak havoc on his (and neighbouring) oilfields to terrible effect?

Yamani, speaking to The Telegraph, warns that the consequences for the world economy could be "disastrous".

"Is it going to be a quick war? Is Saddam going to resign? Will America go in and restore and manage the oil fields. If so the price will drop," he says.

"But if Saddam sets fire to the oil fields or damages those fields in any way then the price will jump. All these ifs. If he has chemical and biological weapons [and manages to mobilise them] there could be an absence of crude from the market. Its a disaster. We do not know the outcome and anyone who says they do is just taking a guess."

The short-term problem is that when war breaks out the world will lose Iraq's oil exports of between 1.5m and 2m barrels per day. The Organisation of Petroleum Exporting Countries, led by Saudi Arabia, has been quick to reassure markets that it will increase production to plug any gap in world supplies.

Opec, however, has already been increasing output to offset the shortage caused by a crippling general strike in Venezuela. There is growing concern as to whether, in the short time available, the cartel can do much more.

On Wednesday the International Energy Agency warned that world oil production capacity would fall short of demand this month by 1.68mbpd in the event of war. The IEA also said that Opec's spare capacity is just 900,000bpd, which is well below the amount estimated earlier by the US government.

One oil price expert with a major Western oil producer says people are panicking unnecessarily and that, assuming any damage is limited to Iraq, there is no shortage.

"The reason Opec's capacity is down is that Opec has been increasing production in anticipation of war. There is oil loaded on tankers out there. The world has more than enough oil to get through war. We are talking about 2mbpd [at risk] out of a daily consumption of 77mbpd," he says.

That said, the tenaciously high oil price even before the start of war is putting pressure on Western governments to release precious emergency reserves.

The US has been steadily building its strategic petroleum reserves to a record level of about 600m barrels and could, say analysts, release up to 4mbpd when war breaks out. That would be more than enough to account for the Iraqi shortfall, but it may not be enough to make up for potential disruption in production from neighbouring Kuwait.

According to Vincent Cable, the Liberal Democrat spokesman on trade and industry and former chief economist at Shell, the severity of the pre-war "oil shock" means that Western governments should be acting before it is too late.

"There is genuine scarcity. Why on earth are the Western governments not releasing strategic stocks? This is the time to do it," he says.

"The oil price is doing a lot of damage which may not be percolating through yet. It is almost certainly having a severe effect on oil importing developing countries such as India and China.

If this goes on for a few weeks, let alone months, we would have the kind of adverse effect on the world economy we had in 1991. We are back to 1991 with the potential for worse if the war does not go smoothly."

It is the prospect of the war "not going smoothly" which strikes fear in the heart of many industry experts. The main worry is that Saddam will attack oil reserves and infrastructure beyond his own - notably in Kuwait or Saudi Arabia.

Cable says that the most serious risk is if the new Gulf war were to hasten the collapse of the Saudi regime. That could happen, he believes, either because of an intensification of anti-Western feeling or because of a sharp post-war rise in Iraqi production. That could, in turn, cause prices of oil to slump to the detriment of the Saudi economy and its ability to provide cheap public services.

"The potential for revolution is all too plain. And regime change could bring to power people with little interest in worldly problems such as oil, much like the mullahs did in Iran in 1979," Cable says.

Philip Lambert of Lambert Energy Advisory is also deeply concerned about the effect of potential instability in the Middle East on the oil price. And he argues that the markets appear to be forgetting about the wider political difficulties in the oil world.

"What worries me is that Iraq is not the only place that is politically difficult. Our view is that political instability could create an almost permanent risk premium in the oil price," he says.

"A solution in Venezuela is not yet certain. Nigeria (which produces 2mbpd) is unstable and the Middle East will almost certainly be unstable after war. We have to ask whether there will be a fundamentalist backlash. All that has to be priced in by the market. What this crisis has proved is that there is not a lot of spare capacity in the world."

www.iol.co.za March 14 2003 at 06:04AM

Baghdad - For months, this city's residents have tried to maintain the appearance of normality while the threat of war grew closer.

But the city seems to have finally dropped its business-as-usual pretence, succumbing to the reality that a United States attack could come soon.

Embassies are closing. The United Nations is pulling out expatriate staff. Residents are hoarding food, water and fuel, buying generators, drilling neighbourhood wells and cleaning out basements to use as bomb shelters.

Throughout the city, workers are building sandbagged positions and digging trenches.

'We must defend our nation because right is on our side'Members of the ruling Ba'ath Party are organising neighbourhood resistance cells. The dinar, Iraq's currency, is slumping and food prices - especially for canned food and bottled water - are soaring.

As recently as a few weeks ago, many Baghdad residents had at least publicly adopted a fairly laid-back attitude toward the threat of war, reflecting the experience of having lived through two wars and periodic US strikes over two decades.

Now store owners have begun moving their merchandise to warehouses. Others are not replenishing their stocks. Some residents are honing their evacuation plans, making arrangements with relatives in what they see as the relatively safe countryside.

Families can be seen moving out from central Baghdad's apartment blocks, loading trucks with suitcases and boxes.

On Wednesday, 35 high school students filled burlap sacks with soil and piled them into a defence position opposite the Al-Rashidiyah Bridge over the Tigris River.

'My wife Mariam prayed all night and I could not sleep until daylight, when I felt safe'"This is a sensitive area and it must be defended," said Ahmed Yassin, 16. "We must defend our nation because right is on our side."

Baghdadis whisper rumours that authorities are preventing people from leaving the city, but motorists reported on Wednesday that traffic in and out of the city was normal, with routine identity checks at roadblocks.

Only the wealthy can afford to leave the country for Jordan or Syria. Most of the city's five million people must face the grim prospect of war. Their fears are accentuated by nightmarish memories of a similar situation 12 years ago.

Muwafaq Fadil, a 54-year-old taxi driver, said his son Simon, then four, was so afraid during the six-week bombing campaign in the 1991 Gulf War that he hid under the sofa every night. His daughter Mariam, 6, fell unconscious when the bombing grew intense.

"My wife Mariam prayed all night and I could not sleep until daylight, when I felt safe," Fadil said. "I wish we could go abroad, but I don't have money."

Fadil said that for the past few weeks, his son has been unable to concentrate and suffers from stomach aches. Fadil blames this on the prospect of war.

The war jitters are also being felt in Baghdad's limited nightlife. Fewer patrons show up at restaurants.

Many of Baghdad's estimated 60 embassies - including those of Portugal, Spain, Thailand and Japan - have pulled out their staff. A rapidly shrinking number of others remain, including most countries vocally opposing a war: France, Germany, Russia, Cuba, Venezuela and most Arab countries.

Grace Princesa Escalante, the Philippines' top diplomat in Iraq, remains as well. She has enjoyed a reputation for giving the best parties in Baghdad since she arrived two years ago. They have become a symbol of normality in a city where such symbols are increasingly in short supply.

But she may have given her last party this week - and even that didn't prevent war talk from dominating the conversation. It wasn't until she switched on the karaoke machine that the pace picked up.

Guests sang a rendition of the Eagles' 1970s hit Hotel California, replacing the chorus with "Hotel Al Rasheed", the name of Baghdad's most famous hotel. The evening's finale was another apropos 1970's classic: Gloria Gaynor's I Will Survive. - Sapa-AP

• This article was originally published on page 6 of The Cape Times on 14 March 2003

www.natcath.com By CHARLES DAVIS

Last September, I wrote a column for NCR that opposed the coming war. I said at the time that the United States was overstating the threat from Iraq while downplaying more real dangers. But I am revisiting the issue because I now believe that to not use force to back up the many U.N. resolutions over the past decade could lead to more serious injury to the world than to maintain the current situation of phony containment of Iraq.

My main reason for opposing war was that I believed that Saddam was deterred from using weapons of mass destruction as both the United States and Soviets were deterred during the Cold War. However, in reviewing the 1962 Cuba crisis, I found that when the United States was putting pressure on the Soviets to remove their missiles from Cuba in 1962, Castro was screaming at Moscow to launch a nuclear attack on the United States from Cuba -- even though Castro knew that Cuba would have faced destruction from the U.S. response. This unnerved Khrushchev because he knew the conflict would then probably escalate to full-scale nuclear war. Khrushchev was perfectly willing to threaten to use nuclear weapons but was constrained from using them; Castro, however, would not have been so constrained had he had them.

There is a strong possibility that Saddam is not deterred from providing chemical and biological weapons to terrorists. He has used chemical weapons against his own people in the past and there is no reason to believe that deterrence would persuade him not to provide chemical or biological weapons to terrorists. Short of an invasion of Iraq, Saddam may be persuaded to not make an overt attack with weapons of mass destruction. However, there are all sorts of ways to clandestinely provide them to terrorists.

As President Bush said in his State of the Union address: “Secretly, without fingerprints, [Saddam] could provide one of his hidden weapons to terrorists or help them develop their own.” Imagine how attention would be diverted away from Iraq by, say, near simultaneous chemical and/or biological weapons attacks in European and/or American cities by terrorists with weapons supplied by Iraq. Without regime change in Iraq, disasters such as this are waiting to happen.

My second major reason for advocating regime change is the suffering of the Iraqi people. The tortures, executions and other activities of the Saddam regime against its own people are comparable to the suffering of the peoples of Europe under the Nazis. Many argue that the U.N. sanctions policy is the cause of the suffering of the Iraqi people. In response, I would point out the situation of the Kurds in Northern Iraq. Under the protection of the U.S. and British aircraft in the “no-fly zone” the Kurds have prospered, while Iraqis in other regions have suffered severely. Saddam has clearly manipulated the sanctions to cover up his spending “oil for food” to build his palaces and weapons of mass destruction -- while at the same time allowing the blame for the suffering of the Sunnis and Shiites to be put on the U.N. sanctions.

There also have been accusations that “the war in Iraq is about oil.” I believe that is true -- but for reasons different from those who advance that argument.

As I see it, the United States can buy oil from whomever it wants. Note that in the current crisis in Venezuela, the Saudis have proposed increasing OPEC oil production; the sheikhs know that their financial future depends on healthy Western economies. At the same time, oil producers are signing oil contracts with Russia and other Black Sea states to diversify their suppliers.

Clearly, if Iraq was not an oil producer, the United States would not have the same interest in that country. At the same time, no country without energy to sell (except the bankrupt North Koreans) would have interest in developing weapons of mass destruction.

The United States has alternative sources of supply and among the major world economies dependent on imported energy, it is itself one of the world’s greatest energy producers. Since, unlike the other advanced Western economies, the United States also has the capability of developing other sources of energy -- shale, natural gas, hydroelectric, solar and so on -- it is a canard to assert that the United States is going to war to dominate Iraq’s oil resources.

On the other hand, few in the Western press publish the interests of the French and the Russians in perpetuating the status quo in Iraq. John Hall, a columnist for the Media General News, writes, “To a certain extent the source of the current deterioration in French-American relations over Iraq is traceable to oil.” The French have extensive contracts with Baghdad. “There is clearly a huge French financial interest in a peaceful settlement of the Iraqi issue. That doesn’t explain dovish French policy, any more than oil explains hawkish U.S. policy.” In addition, Baghdad has significant debts it owes to Moscow for arms purchased during the Soviet era. Moscow wants to collect on those debts, and both the Russians and the French have contracts to develop Iraqi oil fields once the sanctions are lifted.

Certainly, the United States will want to use some of the funds from Iraqi oil to pay for rebuilding the country after the war and the costs of occupation. But Washington knows it cannot be seen as exploiting the situation for controlling Mideast oil for its own purposes or setting up a colonial regime in Iraq. Secretary of State Colin Powell said, “The U.S. had sent its soldiers into foreign wars over the last century, most recently into Afghanistan, without having imperial designs on the territories it secured. We’ve put wonderful young men and women at risk, many of whom have lost their lives. ...We’ve asked for nothing but enough land to bury them in.”

I believe those who shout that the war in Iraq is “about oil” should consider these factors.

There are other significant reasons why the status quo in Iraq cannot continue. To briefly enumerate:

• The League of Nations collapsed in the 1930s after Hitler marched into the Rhineland and Mussolini conquered Abyssinia. Many in the league said forceful measures to expel the conquerors were not needed, collective security would protect Western Europe. The result was the league turned out to be toothless and civilization plunged into World War II. Since the end of the first Gulf War there have been innumerable U.N. resolutions calling on Saddam to disarm. He has not disarmed. Short of invasion there will be no disarmament.
• We owe the Kurds in Northern Iraq. They have been the most “sold out ally” in history. Most recently, at the end of the first Gulf War, they were brutally repressed by both the Turks and Saddam’s forces. According to a March 2 New York Times editorial, “Forcefully repressing Kurdish national aspirations has been a central doctrine of the modern Turkish state. … The Bush administration is trying to convince a skeptical world that it is ready to fight for a free, democratic Iraq. Nothing would undermine the American assertion faster than abandonment of the Kurds.”

There is a need to provide an example of democracy to the Arab world. New York Times columnist Thomas L. Friedman calls Bush’s plan for regime change: “the mother of all political gambles. … It could help nudge the whole Arab-Muslim world onto a more progressive track.”

• Considering the lack of confidence among the American electorate of our president’s domestic policies, it is not surprising that there should be broad skepticism over U.S. foreign policy. There is doubt over whether the administration will keep its promises for reconstruction in Iraq (and Afghanistan) after the fighting ceases.

I believe there is no greater effort the United States could undertake at this time than the liberation of Iraq, winning the peace in both Iraq and Afghanistan and creating an example for democracy for the Arab world -- as the United States nobly did in Western Europe and Japan after World War II. Such a course would set the stage for then turning to more effective policies to resolve the Arab-Israeli situation.

Charles Davis was a pilot for the Navy and flew antisubmarine warfare aircraft in the late 1950s. In his civilian career he was an analyst of Soviet military and foreign policy for the Defense Intelligence Agency and National Intelligence Council.

National Catholic Reporter, March 14, 2003

www.katu.com March 13, 2003

BAGHDAD, IRAQ - For months, Baghdad residents have tried to maintain the appearance of normalcy while the threat of war grew closer. Now the city seems to have finally dropped its business-as-usual pretense, succumbing to the reality that a U.S. attack could come soon.

Embassies are closing. The United Nations is pulling out expatriate staff. Residents are hoarding food, water and fuel, buying generators, drilling neighborhood wells and cleaning out basements to use as bomb shelters.

Throughout the city, workers are building sandbagged positions and digging trenches. Members of the ruling Baath Party are organizing neighborhood resistance cells. The dinar, Iraq's currency, is slumping and food prices - especially for canned food and bottled water - are soaring.

As recently as a few weeks ago, many Baghdad residents had at least publicly adopted a fairly laid-back attitude toward the threat of war, reflecting both fabled Arab fatalism and the experience of having lived through two wars and periodic U.S. strikes over two decades.

Now, though, store owners have begun moving their merchandise to warehouses, fearing bombing or looting. Others are not replenishing their stocks. Some residents are honing their evacuation plans, making arrangements with relatives in what they see as the relatively safe countryside.

Families can be seen moving out from central Baghdad's Soviet-style apartment blocks, loading trucks with suitcases and boxes.

On Wednesday, 35 high school students filled burlap sacks with dirt and piled them into a defense position opposite the Al-Rashidiyah Bridge over the Tigris River on Wednesday.

"This is a sensitive area and it must be defended," said Ahmed Yassin, 16. "We must defend our nation because right is on our side."

Baghdadis whisper rumors that authorities are preventing people from leaving the city, but motorists reported Wednesday that traffic in and out of the city was normal, with only routine identity checks at roadblocks.

Only wealthy Baghdadis can afford to leave the country to neighboring Jordan or Syria. Most of the city's 5 million people must face the grim prospect of war.

Their fears are accentuated by nightmarish memories of a similar situation 12 years ago.

Muwafaq Fadil, a 54-year-old taxi driver, said his son Simon, then 4, was so afraid during the six-week bombing campaign in the 1991 Gulf War that he hid under the sofa every night. Daughter Mariam, 6, fell unconscious when the bombing grew intense.

"My wife Maria prayed all night and I could not sleep until daylight, when I felt safe," Fadil said Wednesday. "I wish we could go abroad this time, but I don't have money."

Fadil said that for the past few weeks, his son has been unable to concentrate and suffers from stomach aches. Fadil blames the prospect of war.

The war jitters are also being felt in Baghdad's limited nightlife. Fewer and fewer patrons show up at restaurants. Nightclubs have been closed by presidential decree since the early 1990s.

Many of Baghdad's estimated 60 embassies - including those of Portugal, Spain, Thailand and Japan - have pulled out their staff. A rapidly shrinking number of others remain, including most countries vocally opposing a war: France, Germany, Russia, Cuba, Venezuela and most Arab countries.

Grace Princesa Escalante, the Philippines' top diplomat in Iraq, remains as well.

She has enjoyed a reputation for giving the best parties in Baghdad since she arrived two years ago. They have become a symbol of normalcy in a city where such symbols are increasingly in short supply.

But she may have given her last party this week - and even that didn't prevent war talk from dominating the conversation. It wasn't until she switched on the karaoke machine that the pace picked up.

Guests sang a rendition of the Eagles' 1970s hit "Hotel California," replacing the chorus with "Hotel Al Rasheed," the name of Baghdad's most famous hotel. They sang especially loudly when they came to the line: "You can check out any time you like, but you can never leave."

The evening's finale was another apropos 1970's classic: Gloria Gaynor's "I Will Survive."