1. Introduction

When Iraq invaded Kuwait, the UN Security Council responded with sanctions against Iraq.¹ Amounting to a complete economic and political isolation, their aim was to force Iraq to withdraw from Kuwait. Following the military route of the Iraqi army, the UN Security Council passed a new resolution (687) on 3 April 1991 continuing the sanctions in order to secure Iraq's compliance with the terms of the ceasefire. During the last six years, and measured against the goal of isolating the Iraqi economy from world commerce, these have proven to be the most effective sanctions applied against a country in recent history.

The main goal of this paper is to study the impact of the sanctions on the Iraqi economy and its population. Its main focus is on the livelihood and the well-being of the civilian population in the area that has been under the control of the government, that is, the whole of Iraq except the three governorates in Iraqi Kurdistan. This study builds on an earlier study carried out in 1991, when sanctions were only one year old.² We document changes in the Iraqi economy and the impact of sanctions on the economy since then, as well as contrasting with the situation before 1991.

Resolution 687 inter alia required Iraq to accept unconditionally the following conditions:

• Kuwait's territorial boundaries as demarcated by the UN Iraq-Kuwait Boundary Demarcation Commission (IKBDC),
• To compensate for the damage caused by the invasion of Kuwait as determined by the UN Compensation Commission (UNCC), and
• To submit to dismantling by the UN Special Commission (UNSCOM) and the International Atomic Energy Authority (IAEA) of weapons of mass destruction and long-range missiles and also of all programmes associated with their development or manufacture.

Still in force over six years later, the sanctions against Iraq are, according to the former UN Secretary-General, "one of the most complex and far-reaching set of decisions ever taken by the [Security] Council" (United Nations, 1996, p 29).³ The sanctions are a landmark for the UN and international relations in three respects.

First, they have been unanimously agreed by the five permanent members of the Security Council and accepted by almost all other UN member states. Some observers hailed this consensus as a portent of a new cooperative spirit in the international community in the post-cold war era.⁴

Second, the UN and its agencies have taken on unprecedented roles in implementing Resolution 687 and enforcing the sanctions. These range from the demarcation of the boundaries between Iraq and Kuwait, conducting "rigorous, no-notice, on-site inspection anywhere in Iraq", itemised approval of what Iraq can import and a detailed policing of the use of revenue derived from the export of oil permitted under the recently-concluded "food-for-oil agreement". The breadth and depth of the UN involvement stands in a marked contrast to its marginal role in the enforcement of internationally orchestrated economic and political sanctions against other recalcitrant states, such as Libya, the Sudan, North Korea, Haiti, and the former Yugoslavia.

Third, the sanctions have been remarkably effective in their implementation if not in securing all their aims. As yet, there have been few attempts by UN member states to break the sanctions. Compared to multilateral sanctions against other states, the sanctions against Iraq stand out in their scope and effectiveness. Except for food and medicines, there has been a blanket ban on all commodities unless specifically exempted by the UN Sanctions Committee. Only limited oil exports to Jordan for own consumption were permitted until the recent "food-for-oil" agreement between Iraq and the UN.

The effectiveness of sanctions has been aided by geographical and political conditions. There are only two outlets for oil exports on a large scale: one is the shipping terminal at the mouth of a narrow strait on to the Gulf bordered by Kuwait on the one side and Iran on the other, and other is the pipeline through Turkey to the Mediterranean. The first has been blockaded and the second is easy to police. With five out of its six neighbours, Iraq has either been at war or has had strained relations. The sixth is Jordan, which having refused to join in the military alliance against Iraq during the Gulf war, has since distanced itself from the Iraqi regime.

As a result of their effectiveness, oil export restrictions have dealt a large blow to the Iraqi economy. In this report we argue that even while imports have been prohibited, the main effect of sanctions has come through the complete shut down of oil exports and other sources of financing. The sharp reduction in the purchasing power and the rise in the price of foreign exchange have rendered import controls largely otoise. The result is the "temporary" shut down of an economy that was highly dependent on foreign imports financed by oil revenues.

The result of this shut down is widespread economic disruption and impoverishment. The public sector has reduced wages to - a month due to limited revenues, and industrial production is down 80% in many regions due to reduced purchasing power and imports. The result is that millions of people have taken on casual work in the service sector, or shifted to food production which remains relatively profitable, while at the same time waiting for the "temporary" sanctions to end.

The main achievement of the sanctions regime is that the Iraqi regime has been forced to compromise, albeit grudgingly, on a number of issues relating to regional security, and Iraq's military power has been contained. The compromises include the unconditional acceptance by Iraq of its boundary with Kuwait, as demarcated by the UN Iraq-Kuwait Boundary Demarcation Commission, the (partial) destruction of the stockpiles of long-range missiles, biological weapons and fissile material, and the dismantling of the facilities for their production.

The sanctions have also severely weakened the Iraqi economy, and hence reduced the power of Saddam Hussein's regime to conduct belligerent activities in the future. But given that six years later the regime remains in power, it is clear that sanctions have failed to topple the regime as some observers had hoped. Further, the regime remains as brutal and uncompromising in its treatment of political opponents as it was prior to sanctions. If one goal of sanctions was to improve human rights in Iraq then to date sanctions have clearly failed in this regard.

Hence the main achievement of sanctions is a reduction in Iraq's offensive capability. But this has come at great cost in terms of increased poverty, and large dislocation in a country of 20 million people. Although the UN and its agencies have taken an interest in the impact of the sanctions on the Iraqi population - e.g. the Security Council has offered the Iraqi government the option of exporting a limited quantity of oil to finance humanitarian imports (SCR 706 & SCR 986) - even these concessions have been contingent on the "good behaviour" of the Iraqi government. By implication the UN and the international community have chosen to tolerate widespread suffering of the population in order to achieve the containment of Iraq's military power.

Recently a modest breakthrough in the direction of relieving poverty was achieved with the successful negotiations between the UN Security Council and the Government of Iraq over the implementation of a "food-for-oil" (FFO) agreement. This agreement allows Iraq to export a limited value of oil with part of the revenue available for the import of staples, medicines and other items to relieve suffering. The agreement involves detailed monitoring by UN officials to ensure that all of the revenues available to the Iraqi government are only used for approved and specified imports. As a result of the civil strife in Iraqi Kurdistan and military intervention in that region by the government of Iraq, the FFO agreement was temporarily suspended, but finally came to fruition in December 1996.

However, while we believe the FFO arrangement is a welcome change, we argue that it will not be sufficient to end the extreme disruption of people's lives in Iraq. The FFO programme does not provide sufficient funds to dent the large decline in Iraq's export revenues, so economic stagnation will surely remain.

Any observer of the current situation in Iraq cannot help but conclude that sanctions have been implemented with little assessment of their costs in terms of poverty, and their long-term consequences. If the aim has been, in the words of a former UN Secretary-General, to "build lasting peace and security in the region" (p.29), the very longevity of the sanctions and the absence of any end on the horizon warrants concern. Given the high economic costs of sanctions documented in this study, we believe that the United Nations should seriously consider alternatives to comprehensive economic sanctions in order to achieve its ultimate goals in the region. The unfortunate reality is that at this stage, none of the main parties to the sanctions regime appear interested in examining such alternatives.