Trade ministry preparing to resume food distribution

Many Iraqi trade ministry staff will soon return to their jobs distributing monthly food rations across the country under the Oil-for-Food programme, currently being administered by the UN. At the same time, Iraqis, along with US-led administrators, will start operating the programme. They are meeting UN officials in the Jordanian capital, Amman, this week to work out the details, according to Fakhr al-Din Rashan, the Iraqi deputy trade minister. Workers of the UN World Food Programme (WFP) have been distributing rations country-wide since the end of hostilities in April. "We appreciate all they have done, but let us be frank: before the World Food Programme, the Ministry of Trade did all the distribution and supply of food in Iraq," Rashan told IRIN in Baghdad. "We have all of the warehouses, the staff, the transportation, so handing over will be easy," he added. According to plans laid out by recent UN Security Council resolution 1483, no new Oil-for-Food contracts would be signed with effect from 21 November, Rashan said. However, the validity of contracts signed before that date, almost all of which run through 2004, would continue. Under the UN-sanctioned US $10 billion Oil-for-Food programme, former President Saddam Hussein was allowed to sell some of the country's oil to buy food, medical supplies and other humanitarian-related products. The UN Development Programme, UN-Habitat and the UN Children's Fund also worked on humanitarian-aid related aspects of the programme. As soon as coalition forces entered the country, trade ministry officials and others brought them documents showing that Saddam had taken kickbacks from all Oil-for-Food vendors of at least 10 percent, Rashan and others say. The UN had not been aware of the kickbacks, according to Ian Steele, a spokesman in New York for the programme. "We were not in a position to know about arrangements that might have been made bilaterally between the former government and its suppliers outside of the UN contract review process," he told IRIN. But UN workers and US-led administrators have been going through all existing contracts to get the 10 percent fee chopped off vendors' bills, according to Rashan. They had been working day and night to finish the job before 21 November, he said. UN inspectors would not have known about the kickbacks, because they was tagged on after the original contracts had been signed, Haydar, a health ministry worker who declined to give his last name, told IRIN. He was worried that members of the former secret police who appear to have been in charge of some of the bank accounts might come after him if they found out that he was involved. "It was a big game - how to get money without the United Nations knowing about it," Haydar said. "The contract would go to the United Nations as a simple amount. The 10 percent was hidden later." The 10 percent fees collected may have totalled in huge sums. For example, health ministry-related contracts totalled $879 million last year, so 10 percent would have been around $88 million, according to Scott Svabek, an American administrator working at the health ministry, said. Rashan said he expected the transition to proceed smoothly, since workers had only been away from their jobs for a few months. Since UN sanctions against Iraq ended following the war, there is plenty of Oil-for-Food money waiting to go into the new administration. About $1 billion was turned over to the Iraq Development Fund following the war, Torben Due, a WFP manager, told IRIN. "I expect everything to go OK. As far as food is concerned, we can proceed with distribution until next year - that's what we negotiated," Rashan said. "Budgets for 2004 call for $1.2 billion for food, as Iraq figures out how to transition to a free market economy. One option in the future is that people who need it may receive the money to buy the food they need rather than the actual items, for example," Rashan explained. Shops in the capital and around the country are full of fresh food and vegetables and imported products, but the unemployment rate is currently at least 60 percent, according to unofficial estimates following the war. "It is very complicated," Rashan said. "We don't want to create another problem in this context." At the moment, officials are preparing for the handover in more specific ways. They will have a new operations centre in Baghdad to enable them to communicate with border control posts country-wide, which will not be easy inasmuch as the bombing during the war destroyed much of the country's telecommunications network. Virtually all Iraq's 27 million people get rice, flour, sugar, chickpeas, tea, milk and other basic food items after showing a ration card and paying about 20 US cents under the Oil-for-Food programme, according to Rashan. The food provided at this price actually costs about $15.