[casi] News, 14-21/05/03 (2)

[Peter Brooke <pbrooke@DELETETHISukonline.co.uk>]

News, 14-21/05/03 (2)

NEW KURDISH ORDER (and see 'Return of the Natives')

*  Kurds making their own Iraq oil deals
*  On Oil, Iraqis Defer to U.S.
*  A Mix of 'President . . . and Pope'
*  [No. 10 Most-Wanted Iraqi Surrenders]
*  Iraqi Kurds Growing Restless Over Unpaid Wages
*  Power struggle emerges in Kirkuk

ENTERPRISING NEIGHBOURS

*  Lebanon lobbies UN over 'oil-for-food' contracts
*  Turkey emerges stronger for not bowing to US
*  U.A.E. Red Crescent completes water purification projects in south...
*  Iraqi business has key role to play - and so do Arabs


NEW KURDISH ORDER (and see 'Return of the Natives')

http://www.smh.com.au/articles/2003/05/15/1052885345587.html

*  KURDS MAKING THEIR OWN IRAQ OIL DEALS
by Sabrina Tavernise and Neela Banerjee in Suleimaniya
Sydney Morning Herald, 16th May

A Kurdish political party working with the United States to shape an interim
government in Iraq has quietly pushed ahead on three oil development
projects, acting autonomously as a local government.

The Patriotic Union of Kurdistan, one of the two main Kurdish parties in
Iraq, has signed production-sharing contracts with two Turkish companies,
PetOil and General Energy, to develop and survey oilfields in north-east
Iraq, according to Rasheed Khoshnaw, deputy director of the party's special
projects division.

Party officials also agreed recently to allow an Australian company to do
surveying work in eastern Iraq, Mr Khoshnaw said. He did not name the
company.

Mr Khoshnaw said that the most recent of the oil agreements was concluded
three months before the war in Iraq began in March. At that time, United
Nations sanctions limiting Iraqi oil exports were firmly in place, although
now the Security Council is considering a resolution that would lift them.

The US, pushing for a UN vote on Iraq next week, said on Wednesday it would
submit a "modified" resolution shortly. Diplomats said revisions would
centre on the role of the UN in postwar Iraq - hinting at a bigger role for
the body in forming a new government - as well as how the oil-for-food
program would be phased out.

The US Secretary of State, Colin Powell, said on Wednesday after talks in
Moscow with Russian President Vladimir Putin that the US had yet to agree
with Moscow on draft proposals to end sanctions. "With respect to Iraq,
there are some outstanding issues and we will be working these issues in a
spirit of partnership and trying to come to a solution," he said.

US military commanders in Baghdad, under pressure to impose order on a
still-lawless capital, are defending their approach to keeping the city safe
and said they were "aggressively targeting" looters. But they said they
would not authorise a shoot-to-kill policy, as previously reported.

In Washington, a US Treasury official said that Lebanon's central bank had
located $US495 million ($768 million) in Iraqi funds - thought to be some of
Saddam Hussein's hidden billions.

The Bush Administration has changed its tune on Iraqi weapons of mass
destruction - its argument for going to war. Instead of looking for stocks
of banned materials, it is now pinning its hopes on finding documentary
evidence. The change in rhetoric seems designed to prepare the public for
the fact that special US military teams have found little to justify the
Administration's claim that Iraq was concealing vast stocks of chemical and
biological agents and was working on a nuclear weapons program.


http://www.washingtonpost.com/wp-dyn/articles/A61611-2003May15.html

*  ON OIL, IRAQIS DEFER TO U.S.
by Peter S. Goodman
Washington Post, 16th May

KIRKUK, Iraq -- Around the conference table at North Oil Co., they were
ostensibly discussing a simple contract issue: Should the new security force
hired to guard the company's facilities be paid in the traditional monthly
lump sum, or instead by an hourly wage?

The contract expert from KBR, a Halliburton Co. subsidiary assisting with
the reconstruction of Iraq's oil industry, favored a timecard system: Work
for an hour, get paid for an hour. But the men from the security company
were dubious. Before the fall of Saddam Hussein, Iraq was a socialist
country. The government provided transportation along with meager housing,
food and health care. Who would take care of all that now?

Then there was the question of who had the power to decide such things.
Under the old system, bureaucrats at the Ministry of Oil in Baghdad decreed
salaries. "It is beyond our authority," said North Oil's assistant general
manager, Ghazi Talabani.

"You need to take that authority," implored Kevin W. DaVee, a civilian with
the U.S. Army Corps of Engineers. He had journeyed from his home in Tulsa to
help get oil pumping, but now he found himself wading into something far
deeper. "The old system had central control. It is gone."

As the United States proceeds with the reconstruction of Iraq, the people on
the ground with mundane jobs such as turning on lights and fixing pipes are
confronting far more complex issues every day. Beneath nearly every
pragmatic task lies a tangle of questions about the future of Iraq's
economic system.

The meeting at North Oil headquarters, set amid eucalyptus trees and fields
dried yellow by the sun, was aimed at settling how best to protect the
installations in the area. The northern oil fields emerged almost unscathed
by the war, but looting has reduced many control centers to glass-strewn
piles of junk.

Throughout a long, hot day, Capt. John Connor, a plain-spoken career
military officer who headed the Corps of Engineers group, stressed that they
were here to advise and not to dictate. "Our goal is to let the Iraqis make
their own decisions," he said. "This is their company and their country. We
don't plan to stay here. We're not here to make our mark."

Yet it quickly became clear that this doctrine had limits. North Oil's
managers -- conditioned by life under Hussein to fear independent action --
have simply transferred their deference from the oil ministry to U.S.
forces.

In the past two weeks, ethnically Kurdish soldiers known as Peshmerga have
moved into many oil facilities, setting up checkpoints and occupying plants
and offices. American forces have tentatively welcomed this development: The
Peshmerga resisted Hussein's control for more than a decade. But were the
Kurds to secure control, it would present the United States with a
geopolitical problem, perhaps provoking military action from Turkey, which
fears an independent Kurdish state. North Oil's managers, meanwhile, have
viewed the arrival of the Peshmerga warily, seeing it as part of their
ongoing struggle for local control with Arab and Turkmen factions.

The group at the conference table aimed to steer around politics, while
putting a new security force in place. Talabani, the North Oil executive,
sat at the head of the table, while Connor and DaVee -- both dressed in
military khakis -- sat on one side. On the other side sat three
representatives from the Coalition of Iraqi National Unity, a loose
confederation of anti-Hussein militias that also run trading, construction
and security companies.

The coalition was providing more than 100 security guards, all Sufi Muslims
from northwestern Iraq. North Oil and the Corps both viewed the Sufi as
preferable to the Peshmerga, because they are perceived as outside the local
political fray. They had already been vetted by U.S. intelligence, Connor
said. Still, he was unsure whether the Peshmerga would yield peaceably.
"When we go to the sites, we really don't know what's going on there," he
said.

Connor was concerned that North Oil was not taking security seriously
enough. Before the meeting, he and DaVee had driven out to a site that held
key documents about North Oil's pumping system. Connor had been disgusted
that no one was guarding it. "It's their company, it's for the people," he
said, "but if they can't see that this is really important, then we will
take action for them." Now, inside the conference room, he was seeking to
work out the particulars of deploying the Sufi guards, and hoping that North
Oil -- often called NOC -- would augment them with its own full-time police
force.

Talabani had no faith in his company's police. There were not enough of
them: Of the 480 officers on the force before the war, only about 130 had
returned to work. Those who had returned were routinely disregarding orders
to go to outlying facilities, he complained. A day earlier, he had ordered a
contingent of police to travel to the North and South Jamur oil fields south
of Kirkuk. "They just vanished," he said.

The police were reluctant to venture out in part because they lacked weapons
-- this in a society where assault rifles seem to outnumber working
telephones. Another reason, Talabani said, was their desire to maintain the
privileged status they enjoyed under the old regime: If they began accepting
orders to go to new places, they would be endorsing change, submitting to
the demise of a system that gave them preferred housing, higher salaries and
the ability to steer jobs to relatives via the patronage networks built into
the company.

"If I could, I would shoot them all," Talabani said. "They will not adjust."
Connor had a suggestion: Call all the police in together in a big group and
ask them who was willing to work. Anyone who refused an order should be sent
home and not paid. Meanwhile, the Sufis would be deployed as needed.

But what would the Sufis be paid? Talabani had never had to make such a
decision. Perplexed, he asked for guidance. Connor had little patience for
this. "Whatever you pay the NOC officers," he said. "It's the NOC's company.
It's not the American company. You keep looking at me for approval."

Talabani explained that he was required to seek higher guidance. If he made
a decision on his own, he could face discipline from the Ministry of Oil.
DaVee countered that the people in the ministry "don't know what is
happening here." The only practical consideration, DaVee continued, was
getting the security people in place fast. "Without these men and their
security, your company would cease to exist," DaVee said. "You need to pay
them a fair market value."

Calculating that value was far from simple. Under the old system, North
Oil's police were paid $30 to $50 per month. But that failed to account for
the value of the state subsidies, the graft that anyone with an official
position could extract, plus the raft of less-direct subsidies such as cheap
gasoline and other commodities whose prices were now skyrocketing on
burgeoning black markets. One of the security company agents, Saman
Barzinji, asked for a monthly pay system and a work schedule that would
allow his men to return to their villages to see their families. Three weeks
on, then nine days off.

"Well, what happens if that individual gets sick?" asked Brian LeBlanc, the
contract expert from KBR, formerly known as Kellogg, Brown & Root. His
company would be paying for security until large volumes of oil are pumping.
"If it's an hourly rate, you wouldn't have to pay that guy and you could
bring someone else in."

LeBlanc asked for a list of all the guards and the hours they were working.
"Under the old system, you paid the man for the month whether the man was
there or not," LeBlanc said. "Do you have a problem with what we call a time
sheet, and you pay the man for the time that he is there?" The security
company had never heard of a time sheet. But they agreed to look into it and
respond with a written contract proposal. The company agents seemed more
interested in getting a lump sum and then handling internally the
particulars of paying individual guards.

"Maybe just give us some oil and we will sell it," said Malas Kaznazan, one
of the security company's representatives. The Americans took it as a joke,
but they weren't really sure whether it was intended as one. Connor and
DaVee headed out to their vehicle, a tan Humvee. They would visit the
fields, deploy some more Sufi and see how those already out were faring.
Connor fretted about the meeting. "They just keep looking at me to make all
the decisions," he said. At the wheel, DaVee grinned. "I like to think of us
as really nice conquerors," he said.

They drove east to the Jabal Burur gas separation plant. Sufi guards, who
had arrived the day before, scrambled into the road in their green knits and
black berets, pulling razor wire aside to let the vehicle enter. DaVee
inspected the works. A large oil spill stained the ground -- tens of
thousands of barrels, he estimated.

A dozen Sufis surrounded Connor and tried to communicate with him despite
lacking a common language. "No, no," said one, holding out an empty wallet.
Connor made a note to discuss payment, then spat tobacco juice on the
parched earth. "Any bombs, mines?" he asked. Hands pointed affirmatively
beyond the oil spill. The Sufis asked for food and water. "Potatoes,
tomatoes," came the voices. "That's not up to us," Connor said. "It's not
our contract."

An hour's drive south, on a rise above the flatlands of Kirkuk, the Humvee
pulled through the gates of South Jamur, still occupied by the Peshmerga.
They encircled Connor, two dozen men in green uniforms and sashes. The
looting here had been kept to a minimum. Connor told them that the United
States was "very grateful and thankful for the work that you have done," but
now it was time to clear out. As he spoke, two buses pulled in carrying a
fresh contingent of Sufis. They stepped out of the vehicles, carrying rifles
and cooking stoves. The Peshmerga told Connor they could not leave without
an order from their commander. A request would have to be engineered through
the 173rd Army. For at least a night, the Sufis and Peshmerga would live
here together.

"While we have the two forces here, there will be no trouble," Connor said.
The Peshmerga nodded. Then, Connor walked up a hill to inspect the pumping
station and a gas separator. A fire truck sat parked against a shed, a good
sign since such vehicles have been stolen elsewhere. But the pump that
brought water from a nearby river was gone. "We need water," said a North
Oil engineer, Mazin Kadim. "Okay, you're the engineer," Connor said. "How do
we fix it? Let's say the pump takes a long time. How do you fill the tanks?"

Kadim motioned toward a tanker truck parked nearby. It had a flat tire, the
engineer said, shrugging. "So, you have to fix the tire," Connor said,
rolling his eyes at the recognition that it had come to this: An officer for
the victorious army, standing in the dust of northern Iraq, managing the
repair of a single bum wheel.


http://www.washingtonpost.com/wp-dyn/articles/A61699-2003May15.html

*  A MIX OF 'PRESIDENT . . . AND POPE'
by Scott Wilson
Washington Post, 16th May

MOSUL, Iraq -- Lifting off in a helicopter from the grounds of a Mosul
palace that he has made his headquarters, Maj. Gen. David H. Petraeus began
a tour of all that he commands, a vast northern Iraqi kingdom of desert and
wheat fields, military installations and Bedouin camps, where poetry and
strife fill the smallest corners.

"Look at that -- gas trucks," said Petraeus, pointing out the window of his
UH-60 Black Hawk as the journey progressed. A convoy was arriving from
Turkey with U.S.-bought gasoline to help alleviate severe shortages here in
Iraq's third-largest city. Farther along, he nodded toward combines
harvesting wheat in the fields below. The agreement he brokered that sets
grain prices for farmers and distributors was holding.

Escorted by two AH-64 Apache attack helicopters, the Black Hawk skimmed low
over sand on its way to Rubiyah, a dusty town on the Syrian border. In
plumes of sand, the helicopters landed there and Petraeus, with a stroke of
his pen, formally opened a border crossing that had been closed since the
start of the war.

More than 1,000 tribal dignitaries sat in silence as he spoke at a feast
that followed. He explained that another crossing would mean more money for
all and cheaper chickens in Mosul because of competition. Ushered by sheiks
in flowing white robes, he then moved to tables groaning under ceramic
dishes; he tore off chunks of lamb with his hands and scooped up handfuls of
rice.

"Amazing, isn't it?" Petraeus said later as he waved to the mob from his
departing Black Hawk. "It's a combination of being the president and the
pope."

In normal times, Petraeus is the wiry, intellectual commander of the U.S.
Army's 101st Airborne Division, the Screaming Eagles of military lore.
During the Iraq war, his division fought along the Euphrates River, pounding
through an epic sandstorm and subduing the cities of Najaf, Karbala and
Hilla. His unit arrived in this walled city 220 miles north of Baghdad last
month after U.S. soldiers killed at least 10 Iraqis during anti-American
demonstrations.

Now Petraeus is the face of the 18,000-troop occupying army in Iraq's
northern tip, a viceroy in a land of competing interests and uncertain
loyalties. His job, and those of the other division commanders in Iraq, is
to win the peace as deftly as they did the war, building the beginnings of
democracy in a country with no experience in representative government. The
Bush administration has given them enormous authority, with the expectation
they will remake Iraq into a regional showcase.

Petraeus, 50, a West Point graduate with a PhD in international relations,
acknowledged that "we haven't quite stopped fighting." But he has mostly
turned his attention to other matters. Now, as a recent two-day visit
revealed, Petraeus worries about building new armies and disarming old ones,
taxi rates and gas supplies, the state of Mosul's amusement park and
anti-American sentiment in its mosques. He also confronts questions over how
much freedom to allow Iraqis, even though freedom is precisely what the
United States has promised a country still somewhere between war and peace.

"Combat is hard because you are losing soldiers, killing people. But at the
end of the day you are destroying things, and we know how to do that,"
Petraeus said. "This work requires inordinate patience. There are incredible
frustrations. And you can't just pull a trigger and make it all go away."

The general receives his visitors in an upstairs salon at the Mosul palace,
the Tigris River a ribbon of blue in the middle distance. The walls and
floor are white marble, the ceiling made to resemble the drooping folds of a
tent. He has added elements of the army's utilitarian design. Plywood panels
serve as doors, closed with a strand of wire, and a plastic sheet
substitutes for a window blown out during the war.

Gen. Babeker Bederkhan was his first guest on a recent morning, an ally
about to get an earful. The pesh merga, a Kurdish militia force that
Bederkhan helps lead, worked effectively alongside U.S. troops in the war.
But in victory Kurds have displaced hundreds of Arabs who were paid by
then-President Saddam Hussein's government years ago to come from the south
and settle here to alter the ethnic balance.

Bederkhan's pesh merga fighters have, at times, appeared to support the
"de-Arabization" campaign even after promising Petraeus they would work to
stop it. The day before, in the village of Zamar west of Mosul, thousands of
Kurds and Arabs had squared off in a confrontation that left one Arab dead
and another wounded before U.S. troops arrived.

"Unless you are careful, you will lose the support of the United States,
even though we have been allies for years," Petraeus told Bederkhan, adding
that in the long term, "I want what you want" but only through a national
legal process. "I saved your soldiers yesterday from killing more people."

Petraeus calls his heavy hand, even with allies, the "Big Man concept" and
he often follows even his simplest instructions to Iraqis with the phrase
"those are my orders." In a culture used to centralized power, he has
employed the technique to begin the difficult task of assembling a
multi-ethnic army and a functioning city government.

Two weeks ago, Petraeus invited 250 city leaders to a convention to choose a
new interim mayor and council in Mosul, crimping the invitations with his
division's notary seal in a country where stamps are signs of power. "They
think it's a super-secret Pentagon thing," he said. The all-day convention
produced a 24-member council consisting of Arabs, Kurds, Turkmens, various
tribal leaders, an Islamic imam -- and two retired Iraqi generals, an
irksome constituency of special importance here because Mosul produced so
many of them during Hussein's rule.

The local government is the first to be "democratically selected" in Iraq,
although Petraeus still sits next to the mayor in semiweekly council
meetings. Using the Army division's money, he has carpeted and furnished the
mayor's suite in the looted downtown government building.

The final four mayoral candidates were interviewed individually by Petraeus,
who was mostly interested in their past ties to Hussein's Baath Party.
Ghanin Bassook, a major general in the Iraqi army who was forced to resign
in 1993 after his cousin and brother were executed for treason, emerged the
winner. He was given a Kurdish deputy to bring ethnic balance to the top of
the administration.

The Baath Party dominated Mosul, as it did the rest of Iraq, and deciding
who should remain in government has been a mystifying process.

Some measures are symbolic. Police recruits must sign an agreement to
disavow their membership in the Baath Party or a statement denouncing the
party if they never belonged. Others are more delicate. Bassook, who has
been accused of ties to the former government, wanted to know what to do
with the president of the University of Mosul, a senior Baath official kept
on after the war.

"You should congratulate him for being selected to the position of president
emeritus," Petraeus told the mayor. "He can either accept the position
gracefully with an office and a salary or he can be fired."

The mayor agreed, put the item on the next day's council agenda, and asked
when elections would be held for the job. Petraeus explained that the
president would be named, not elected, just as he informed puzzled employees
at the Telecommunications Ministry days earlier that they would not be
voting for a new boss.

"There's really no understanding of what democracy is here," he said later.

Nonetheless, political parties have flowered since the Baath Party was
toppled. Kurdish and exile parties have arrived, Islamic political organs
have sprung up, and a variety of homegrown organizations with few
ideological underpinnings and even fewer constituents have hung banners. But
most of them have armed mini-militias that they have used to take over
government buildings. Now they fly partisan flags outside them and keep a
few men with worn AK-47 assault rifles on the sidewalks in front.

Mishaan Jabouri, a returned exile, now claims to be the real power in Mosul.
He has taken over, for his Fatherland Party, the riverfront compound of Ali
Hassan Majeed, known as "Chemical Ali" for his role in gas attacks on Kurds
in northern Iraq in 1988. The Pentagon backed Iraqi National Congress
occupies the mayor's house.

"I need permission for another bodyguard to carry a gun," Mahdi Duleimi, a
retired general who is the INC's representative in Mosul, said to Petraeus
during a recent meeting. "Right now I only have the one."

"No more bodyguards, no more guns," Petraeus answered. "We have too many
guns. And I believe your offices are in the mayor's house? Well, I think
he's going to want to live there again soon."

The potentially explosive process of evicting the parties and disarming
their followers will come later. For the moment, Petraeus has opted for a
strategy of accumulating "small wins." The power is on, telephones work, the
water is running. He has used operational funds to resurrect the amusement
park. (He expressed concern at his recent morning security briefing about
the color of the pool's water.) He plans to replant the soccer fields in the
days ahead.

Few public employees, however, have been paid since the war began. But a
chipper man named Doug Hamilton, a Congressional Budget Office employee
assigned to the reconstruction effort, recently arrived with $5 million to
do so.

Trash is piling up on street corners. Sporadic gunfire rings out at night.
Taxi fares have risen; Petraeus sent a one-star general to the
transportation companies to coax down prices. Long gas lines and rationing
pose a huge problem here.

"I waited three days for my share of 25 liters," complained Ayad Mohammed, a
40-year-old taxi driver, who said the supply lasted him three hours. "You
see there is order in these lines. But it is only because the Americans are
here with weapons. If not, there would be chaos."

With unrest near the surface, Petraeus monitors the mosques for strains of
anti-American feelings. Lately, he has not liked what he has heard. So he
has turned for help to Saleh Khalieh Hamoodi, a Sunni cleric and city
council member who issued his own prewar call for Iraqis to resist U.S.
forces. Hamoodi, who was jailed a decade ago, said he was forced to do so by
the government.

Now he is the general's link to the city's powerful clerics. The two met
recently in the mayor's suite to see how they could help each other.
Sweating in long gray robes, Hamoodi was the first to ask for assistance.
Kurds were trying to drive members of the Iraqi Islamic Party out of their
offices, he said. Could the general send some help?

"I'm not going to secure Islamic Party headquarters if the imams say bad
things about coalition forces," Petraeus told him. "And some of your
colleagues are. It hurts me and my men to hear that."

Hamoodi smiled. He took the names of six imams identified by U.S.
intelligence as potentially problematic and assured the general he would
speak to them at once.

Perched above a former Baath Party parade stand, Mosul's only television
station has been a U.S. Army post for almost a month. Shirtless soldiers
from the 3rd Battalion of the 327th Infantry Brigade played touch football
on a recent evening in the courtyard outside the small, concrete station.

Never before has Ahmed Jasim, the station manager, been allowed to pick his
own programming. Pudgy with a gray comb-over, Jasim is still not entirely
free to do so. He said U.S. Marines entered the station and seized a
videotape of Jabouri, the returned exile claiming authority, while it was on
the air in the days after last month's deadly riots.

More recently, Petraeus sent the station manager a letter telling him to
give fair access to all political parties, not just Jabouri's, and censor
anti-American messages. Petraeus's next step, he said, would be to review
material before it airs.

"I am the occupying power, make no mistake," Petraeus said, arguing that
censorship to preserve public order was his "obligation" under the Geneva
Conventions. "I am responsible for this place."


http://abcnews.go.com/wire/World/ap20030517_544.html

*  [No. 10 Most-Wanted Iraqi Surrenders]
ABC News, from The Associated Press, 17th May

[.....]

Elsewhere Saturday, the U.S. military commander in the region said the
northern oil city of Kirkuk will become the latest community in Iraq to edge
toward democracy next week when it installs a new municipal council.

The body will be elected by 300 community leaders chosen by U.S.
authorities, said Maj. Gen. Ray Odierno, commander of the U.S. Army's 4th
Infantry Division.

They will elect 24 delegates to form a city council, along with six other
members hand picked by Odierno to represent the business community. A mayor
and his deputy will be chosen by the council subject to Odierno's approval.

The move comes as U.S.-led coalition authorities in Iraq seek to
re-establish local governments in communities throughout Iraq and gradually
transfer authority from the military to civilians as both groups struggle to
restore basic public services and improve the security situation.

"You must throw off the chains of a brutal dictatorship and the choke hold
of a socialist command economy," Odierno told residents of Kirkuk at a
meeting Saturday. "The message: You must embrace democracy and a market
economy."

[.....]


NO URL (sent through list)

*  IRAQI KURDS GROWING RESTLESS OVER UNPAID WAGES
by Carol J. Williams
Los Angeles Times, 16th May

IRBIL, Iraq ‹ In sharp contrast to desperate Baghdad, there are no gas lines
here, electricity is uninterrupted, and water flows so plentifully that
verdant parks offer respite from the baking heat.

But even here in Kurdistan, where Americans are cheered as allies and
saviors, anger is mounting at the mess the U.S.-led war has made of the
economy and at the absence, a month after the allies won the war, of any
visible effort to win the peace.

Because this region in northern Iraq had been severed from the regime of
Saddam Hussein for a dozen years, Kurds were largely spared the bombing,
destruction and ensuing lawlessness that hit the rest of the country. But
the chaos elsewhere threatens to spill into this region as government
salaries go unpaid and businesses go under.

"Where is the government? Where is the water, the electricity, the security?
What are you doing here?" Sami Abdul Rahman, the deputy prime minister in
the western half of Kurdistan, demanded to know from Americans, whom he
accused of creating a dangerous power vacuum in Baghdad.

In an interview at his lavish office, air-conditioned and appointed with the
requisite portrait of late Kurdish freedom fighter Mustafa Barzani, Abdul
Rahman criticized U.S. allies for the paralyzing delays in getting Iraqi
money into the hands of Iraqi people.

Civil servants who haven't been paid for three months listen keenly to TV
and radio broadcasts about the Iraqi riches found abroad and in Baghdad,
stashed by Hussein and his inner circle in the frantic last days of his
rule. U.S. investigators Wednesday announced the discovery of $495 million
in Iraqi assets at a Lebanese bank, and Treasury officials in Washington
acknowledge that they have now accounted for most of the $1 billion
plundered by Hussein's son Qusai from Iraq's central bank on the eve of war.

"This is Iraqi money that should be used to pay salaries. We have provided
two of the three essentials ‹ security and public services ‹ but it is up to
the U.S. to give Iraqi people their money," said Abdul Rahman, the Kurdish
region's No. 2 official and a key figure in western Kurdistan's ruling
Kurdistan Democratic Party.

Kurds, like most Iraqis, are grateful that Hussein has been ousted and a
path opened to developing a united and democratic Iraq, Abdul Rahman said.
But holdouts from Hussein's Baath Party are exploiting the U.S. inaction, he
cautioned, in a campaign that could turn Kurds against the Americans as
fiercely as in lawless Baghdad.

"Imagine what would happen in the United States if salaries weren't paid for
three months," he said. "Saddam made this country into an empire of
government workers, not us. We would prefer to see private business. But at
present, 60% to 70% of our people live on wages from the government."

Compounding the economic stagnation that has set in since the U.N.
"oil-for-food" program was interrupted by war is a growing impression among
Kurds that U.S. mediators expect them to make all the concessions necessary
to forge a new national alliance.

Kurdish leaders were outraged when U.S. troops from the Army's 101st
Airborne Division ordered Kurds out of a military housing block in the town
of Domiz. The housing block was built on land from which Hussein expelled
Kurds a decade ago so he could settle Arabs there and shift the ethnic
balance in the region. U.S. officers insist that it is up to Iraqi courts to
address all property disputes.

"Americans must stop taking us for granted," Abdul Rahman warned, adding
that Kurds have managed to maintain reasonable security and social services
but can't do so forever without income.

At grocery stores and produce stands, merchants complain that their sales
have plummeted since the bombing because civil servants haven't been paid.

"My sales are down about 50%, which means I can't afford new orders,"
lamented Ahmed Maki, owner of the Majestic supermarket. "No one is getting
paid. No one has any money."

Part of the money problem stems from the perception among some U.S.
officials with the Pentagon-run Office of Reconstruction and Humanitarian
Assistance that the Kurds have their own resources and are holding back on
the public payroll to get a share of the money that will be paid out from
Baghdad.

The Kurdish region was in effect exempt from U.N. sanctions imposed after
the 1991 Persian Gulf War, because its border with Turkey was open and Kurds
imposed trade tariffs on incoming goods. The Kurds also had separate
oversight of the oil-for-food program in their territory.

Kurdistan's payroll totals about $40 million a month, a sum Abdul Rahman
described as a pittance compared with the Iraqi wealth at the United States'
disposal. Salaries would kick start businesses, he said, and help workers
survive until vital oil facilities can be repaired.

"It's said by all U.S. officials that the oil wealth belongs to the Iraqi
people. How it is managed can be negotiated," but it is dangerous to wait
for a new government to be formed to make these decisions, Abdul Rahman
said.

Although critical of some elements in the newly named interim government in
nearby Mosul, Abdul Rahman said a flawed administration was far better than
no government at all.

With two-thirds of Kurdistan's workers bringing home nothing, food vendor
Hasim Salah is selling barely half his prewar volume and therefore buying
less from local farmers.

For some Kurds, however, the postwar paralysis is providing a profit bubble.

There has been a flood of consumers from central and southern Iraq seeking
big-ticket items such as televisions and refrigerators, which have long been
unavailable outside Kurdistan because of sanctions.

Hogar Jawher, a 16-year-old from Baghdad, drove to Irbil on Thursday to buy
two Daewoo color TVs, paying $135 for each. He predicted that he could sell
them for $250 apiece in the capital. Smiling, he proclaimed, "I hope this
lasts forever!"


http://www.msnbc.com/news/915325.asp

*  POWER STRUGGLE EMERGES IN KIRKUK
by Scott Wilson
MSNBC, from The Washington Post, 19th May

KIRKUK, Iraq, May 19 ‹  In cooperation with U.S. occupation forces, two
armed Kurdish organizations have moved swiftly in recent weeks to gain a
political hold on Kirkuk, a city in the northern Iraqi oil fields that the
groups have long coveted as a Kurdish economic and cultural center.     

SINCE MOVING into Kirkuk on April 10 behind fleeing Iraqi soldiers, U.S.
forces have struggled to build a viable local administration in a region
where Kurds are the majority among several often hostile ethnic groups. For
help, U.S. officers have turned to eager leaders from the Patriotic Union of
Kurdistan (PUK) and the Kurdistan Democratic Party (KDP), who have
administered sectors of a largely autonomous U.S.-protected portion of
northern Iraq since shortly after the 1991 Persian Gulf War.

The two groups, each with strong militias, have sent in more than 400 police
officers and a variety of city administrators from the Kurdish enclave that
begins 25 miles east of this city. This has formalized their political reach
outside that area for the first time. Many of those police officers are
former pesh merga guerrillas, who have spent decades fighting efforts by the
government of former president Saddam Hussein to bring the
independence-minded Kurds to heel.

U.S. officers have also reached out to local Arabs, Assyrians and Turkmen,
ethnic groups that each make up a significant minority of greater Kirkuk's 1
million residents. But Kurds, with a long history of working with the U.S.
military, have emerged with more influence in the police force and the
interim city council. As a result, the council has already been boycotted by
a Turkmen group to protest perceived U.S. favoritism toward Kurds.

The Kurdish parties, among the few well-organized political organizations on
Iraq's new landscape, are increasing their visibility here after years of
operating as clandestine cells hiding from Hussein's security forces. The
PUK has moved part of its interior ministry from the autonomous zone to
Kirkuk and has taken over the city's only television station, all with at
least tacit U.S. permission.

Party officials have also been buying property from Kirkuk's Arabs, often at
inflated prices, in hopes of increasing the number of Kurdish residents
before a U.S.-sponsored mayoral and city council election scheduled this
week for this city 150 miles north of Baghdad.

"The only real opposition groups in this region were Kurdish, the only ones
to stand up to the regime," said Mohammed Kamal Salah, the KDP's deputy
director in Kirkuk. "The truth is that this is a Kurdish city, so we have
come to represent it."

Until now, U.S. forces have tried to keep the Kurdish parties at arm's
length, even ordering the pesh merga out of Kirkuk in the days after the
Hussein government's collapse. Turning to them now marks a shift by U.S.
forces that has potentially far-reaching implications for stability in a
region with restive Kurdish populations scattered across four countries.

While Kurdish party leaders meet in Baghdad to negotiate a role in a
federated Iraq, their foot soldiers have worked on the ground to tip the
political balance in their favor. The parties, whose pesh merga moved
alongside U.S. forces throughout the northern campaign, appear to be riding
that mutually useful alliance to greater political power. In endorsing the
Kurdish role, however, the United States has become a player in the ethnic
realignment that has swept Iraq since Hussein's fall by trying to create
local institutions that it hopes will endure after U.S. forces withdraw.

During Hussein's three-decade rule, Iraqi forces put down Kurdish rebellions
with massacres and poison gas attacks that killed what human rights groups
estimate was more than 100,000 people. After the Gulf War, U.S. warplanes
began protecting a 17,000-square-mile Kurdish enclave in northern Iraq. Now
the Kurds are trying to extend their reach into the two major northern
cities outside that enclave: Kirkuk, which sits above huge oil reserves, and
Mosul, an oil center where a similar power struggle between Kurdish, Arab
and other ethnic groupings is playing out under the watch of U.S. forces.

Turkey, which did not allow U.S. forces to invade from its territory, has
warned against allowing Kurdish groups to assume political or military power
in Kirkuk or elsewhere in northern Iraq. Fearing that Kurdish control of the
economically important city could encourage Turkey's separatist Kurds,
Turkish officials threatened to dispatch troops to evict pesh merga militias
after they defied U.S. orders not to enter Kirkuk. The pesh merga withdrew,
but the United States has invited their political wing to return.

"It's a reward from the allied forces to allow the Kurds back in here," said
Muner Qafi, political director of the Iraqi Turkmen Front, the largest party
representing ethnic Turkmen in Kirkuk. "If the Americans left right now,
this city would be the start of a huge civil conflict, not only here but
across the country."

In recent weeks, U.S. forces have tried to help establish a representative
city government and police force. Because Hussein used settlement of Arabs
to alter the demographics of this strategic region, census information
remained secret. No one is sure of the size of each ethnic group, although
most agree that the Kurds represent a majority.

And now the numbers are increasing as hundreds of Kurds ‹ displaced years
ago by Hussein's "Arabization" campaign, which paid Arabs from the south to
settle on Kurdish land ‹ have returned to reclaim their property. Many more
intend to do so once school lets out in the Kurdish enclave in July.
Violence is already on the rise. On Saturday, witnesses said Arab men from
the nearby town of Hawijah arrived in several trucks and opened fire in
town, killing at least five people.

Army Col. William Mayville, commander of the 173rd Airborne Brigade, has
called on Kurdish leaders to condemn the forced evictions that have sent
hundreds of Arabs southward. Until Saturday, he had been mostly successful
in preventing deadly ethnic violence and he has asked Kurds to settle
property disputes in neighborhood committees. The Kurdish support, however,
could change once the Americans leave.

Mayville set up a city council of 24 members, six from each ethnic group.
But rival ethnic leaders say the Kurdish influence extends beyond its
council seats, given to the two major parties and the Kurdistan Communist
Party. The two major Kurdish parties, once bitter political, economic and
military enemies within their secessionist movement, have teamed up to
consolidate Kurdish political power.

The Iraqi Turkmen Front received all six seats set aside for the ethnic
group. But three smaller Turkmen parties complained, and U.S. forces took
five seats away from the front to give to the others. Only the Turkmen
Front, however, operated in Kirkuk during Hussein's rule. The other three
Turkmen parties, Qafi said, were based in the Kurdish enclave and are
sympathetic to the Kurdish cause. The Turkmen Front, once referred to as
"brothers" by the same Kurdish leaders who now accuse it of being an
extremist group with subversive ties to Turkey, will protest by refusing to
occupy its seat.

The police force, now consisting of at least 500 officers, has also become
dominated by Kurds. Although the precinct commands have been divided evenly,
Kurdish officers outnumber those from other groups because they also make up
the plainclothes secret police, according to Kirkuk residents and Kurdish
rivals. The Assyrian Christians could not fill out the full contingent
sought by the U.S. Army, so most of their positions were given to Kurds.

Trained in academies, the Kurdish police have been working for years in the
enclave cities of Sulaymaniyah and Irbil. Kurdish officials say all of them
are former pesh merga fighters, including Maohat Asad, whose family was
driven from its home in Kirkuk by Arabs 16 years ago.

"I came back and found my family house totally flattened," said Asad, who
wears a laminated badge issued by the 173rd Airborne Brigade. "Anyone we
ever had in our house, even visiting family, we had to tell the Baath Party.
They eventually kicked us out. But this will be resolved. Now we're working
alongside the Americans."


ENTERPRISING NEIGHBOURS

http://www.dailystar.com.lb/business/14_05_03_a.asp

*  LEBANON LOBBIES UN OVER 'OIL-FOR-FOOD' CONTRACTS
by Dania Saadi
Lebanon Daily Star, 14th May

Lebanese industrialists are lobbying the United Nations to pay for some $450
million pending contracts won under Iraq's "oil-for-food" program prior to
the US-led war against Iraq, a senior industrialist said on Tuesday.

Lebanon is pushing the New York-based office of the Iraq Program to execute
these contracts before the oil-for-food mandate is suspended, once the UN
Security Council lifts the sanctions on Iraq to make way for autonomous
rule.

"It is going to be difficult to implement all of these contracts right
away," said Ahmed Kabbara, head of the export department at the Lebanese
Industrialists Association. "But the important thing is that Lebanon is not
being treated any differently from any other country that has pending
contracts under the oil-for-food program."

Kabbara, who is seeking compensation for contracts he signed under the UN
program prior to the outbreak of war, recently returned from New York, where
he held talks with UN and US officials.

At least $10 billion worth of contracts are still pending under the
oil-for-food program, which was suspended on March 17, after UN
Secretary-General Kofi Annan ordered the program's staff to leave Iraq, a
few days prior to the onset of war.

Since the war ended, the office of the Iraq program has divided up all
pending contracts into three categories with different priorities: priority
goods, goods in transit and other goods.

"Unfortunately most of the Lebanese contracts are in the second and third
categories, which means they do not have top priority," said Kabbara.

The industrialists whose contracts are in the third category are the most
affected, he said, as they have invested cash without a return on their
investments.

Around 5 percent of the  contracts have been executed as priority goods, and
some of the Lebanese contracts categorized as goods in transit have a chance
of getting paid for by the United Nations.

"It all depends whether the oil-for-food program expires on June 3, or is
extended further," said Kabbara.

The Security Council voted, toward the end of last month, to extend the
oil-for-food program an additional three weeks to June 3, allowing the UN to
include more goods in transit on its priority list.

"The extension of the program is going to be a subject of debate between the
UN and the United States, who are the de facto rulers of Iraq right now,"
said Kabbara. "The main problem is in the UN's cash flow, which is currently
being spent on basic goods. But who is going to be in control of the oil
sales to pay for pending contracts?"

He argued that the Americans can be convinced that it is in their interest
to extend the mandate of the oil-for-food program to make use of the
executed goods, which would save the Americans time from making new orders.

Most of the Lebanese industrialists won the oil-for-food contracts for basic
goods such as motors, cables and medicine.

"Winning these contracts was good and bad," said

Kabbara. "They helped usexpand our production lines and cut costs, but
several companies cannot find a market as big as Iraq to dispense with these
goods."

Lebanese industrialists have long acknowledged they would never have been
able to compete in the Iraqi market without the political backing of the
Saddam Hussein regime that favored, in its last years, Arab countries over
others.

Unless Lebanese industrialists get paid for these pending contracts, the
industry may begin to see more layoffs, particularly as a number of firms
expanded their outlets just to cater to the Iraqi market.

"The Iraqi contracts were important as they contributed to Lebanon's
development by employing people and investing in the local economy," said
Kabbara.


http://www.bangkokpost.com/News/19May2003_news26.html

*  TURKEY EMERGES STRONGER FOR NOT BOWING TO US
by Haldun Gulalp
Bangkok Post, 19th May

Turkey's seeming fall from grace with the US may turn out to be a blessing
in disguise. The Iraq war and the tortured diplomacy that led up to it may
help resolve Turkey's conflict between its "strategic alliance" with America
and its drive to join the European Union.

The elections last November that brought the Justice and Development party
(AKP) to power were preceded by a dispute between the members of the
then-ruling coalition over enacting the reforms demanded by the EU. Some
liberal elements of that "secular" coalition resigned from the government
and joined with the Islamists to push the reforms through parliament.

After coming to power, the AKP's leaders, former Islamists who had
reinvented themselves as "conservative democrats", energetically engaged
with the United States, the EU and the United Nations on issues ranging from
Cyprus to Iraq, from Kurdish language rights to other human rights issues
within Turkey.

Having suffered the oppressive practices of Turkey's "secular" state and
recognising that human rights must be protected across the board, the AKP
emerged as a credible interlocutor with the West. The US, preoccupied with
the supposed spectre of a "clash of civilisations" between Islam and the
West, saw the AKP's modern, Westernised face as an opportunity and urged the
EU to admit Turkey.

Today, both "conservative democrats" and liberals advocate passing all the
reforms needed to gain accession to the EU, while opponents include extreme
nationalists, of both left and right, as well as some elements of the
"secular" establishment. The Europeans could have tipped the balance
decisively in favour of the reformers by finally rewarding the efforts of
the pro-EU Turks at last December's summit of EU leaders. Instead, the EU
kept Turkey waiting yet again, putting off formal negotiations that, in any
case, may take years to complete.

Europe's persistent reluctance puts the Turks in a quandary. The Americans
want full EU membership for Turkey _ a longstanding Nato member and close
American ally _ while Europeans complain about the Turkish military's
domestic political role. The paradox is that, by maintaining a political
distance and thus limiting Turkey's options, Europe may end up reinforcing
Turkey's status as a military outpost of the US.

At least, that was how things were shaping up prior to the war in Iraq.
Then, despite massive US pressure, Turkey's parliament unexpectedly rejected
the government's proposal to allow US troops in Turkey to launch an invasion
from Turkish territory. Turkey's refusal to grant the Americans access to
military bases on its territory effectively ruled out a northern front in
the war. The Turkish government even attempted a regional initiative for a
peaceful solution to the crisis, an effort no current EU member could have
contemplated.

Parliament's rejection of US troops powerfully refutes suggestions that
Turkey was primarily concerned about the size of the American aid package on
offer as an inducement to cooperate. Suggestions that characterised the vote
as revealing the government's true "Islamic" character ignore the fact that
the only opposition party in parliament, the Republican People's party _
founded by Ataturk and still fully "secularist" _ voted against the plan.
Likewise, other elements of Turkey's secular establishment, including the
president and the military leadership, either opposed or were lukewarm, at
best, to the idea of war in Iraq.

Turkey's military initially remained silent on the issue,
uncharacteristically watching the civilian political process unfold. By
contrast, the military had earlier publicly criticised AKP initiatives on
Cyprus.

Their silence on Iraq reflected their apprehension about unwanted
alternatives: either support the US plan and risk encouraging Kurdish moves
towards an independent state, or oppose the Americans and jeopardise a
critical strategic relationship. They chose to defer to the civilian
leadership and to parliament which, in voting down the US plan, reflected
overwhelming public sentiment against the war. Only after the vote did the
chief of staff publicly endorse the original proposal to bring in American
troops.

In fact, the allegedly Islamic party had skilfully managed to negotiate with
an unrelenting US, consult with the Turkish military and president, and
share all information with the public and parliament. Walking a fine line in
what was essentially a lose-lose situation, the party leadership laid out
the stakes clearly and judiciously left the final decision to parliament.
The outcome was a victory for Turkish democracy and was recognised as such
internationally.

After the US military action in Iraq, the tables may be turning in
surprising ways. As America establishes itself in Iraq, Turkey's
geopolitical military significance may decline. Yet the declared American
aim of building a Muslim democracy in Iraq will only enhance Turkey's
symbolic importance as a role model.

This shift in Turkey's strategic role may also be reflected in a new
domestic balance between the military and the forces pushing for reform.
With careful management, Turkey may find itself drawing closer to Europe,
while rebuilding its relationship with America.

- Haldun Gulalp is professor of sociology at Bogazici University, Istanbul,
Turkey, and is currently a fellow at the Woodrow Wilson International Center
for Scholars, Washington, DC.


Radio Free Europe/Radio Liberty Iraq Report Vol. 6, No. 22, 16 May 2003

*  U.A.E. RED CRESCENT COMPLETES WATER PURIFICATION PROJECTS IN SOUTH...

The United Arab Emirates (U.A.E.) Red Crescent Society has completed several
"Shaykh Zayed Water Purification Projects" in Iraq, the Emirates News
Agency, WAM, reported on its website on 12 May (http://www.wam.org.ae/).
Citing a statement by the U.A.E. Red Crescent Society, WAM reported that
work on water-desalination plants was completed in Al-Basrah, Umm Al-Khasib,
and Umm Qasr. As a result, 1 million gallons of drinking water is now
available per day in the three cities. (Kathleen Ridolfo)


http://www.dailystar.com.lb/opinion/21_05_03_a.asp

*  IRAQI BUSINESS HAS KEY ROLE TO PLAY - AND SO DO ARABS
Lebanon Daily Star, 21st May

Much of the debate over post-Saddam Hussein Iraq has centered on the proper
roles of far away actors like Western governments and the United Nations in
such key tasks as physical reconstruction and political rehabilitation.
There is an urgent need for these outside responsibilities to be defined and
distributed, and the chaos that has reigned since the guns fell mostly
silent only adds to the urgency of the discussion. Unfortunately, however,
two essential factors have been largely ignored: how to reanimate Iraq's
private sector and how the country's Arab neighbors can help improve the
situation.

Iraqi business has a long and proud tradition of innovation, professionalism
and reliability. Its industrial sector has accomplished feats only dimly
imagined in most Third World countries; its merchants have developed highly
effective distribution techniques to make the most of an eroding
transportation sector; and its oil experts have worked wonders to keep the
crude flowing despite the rapacious effects of stringent UN sanctions in
place for well over a decade.

The people in question, those recently returned from exile abroad and those
who never left, have all the skills and dedication required to resurrect
their country's economy. In order for the Iraqi private sector to fulfill
its tremendous potential, though, a sound foundation must be built from
which it can resume its activities. US and British administrators have yet
to fill the vacuum opened up by the fall of the Baathist regime, leaving far
too much uncertainty for private companies to plan and launch the bold
activities that might spark renewed economic activity. There has not yet
been time to complete a thoroughgoing examination of the regulatory
environment and implement a comprehensive set of commercial laws, but US and
British occupation authorities should at least strive to produce some basic
guidelines and minimum guarantees that would sow the confidence required to
justify investment and other risks.

The Iraqis' natural partners in this venture will be their Arab cousins, but
only if the latter can be stirred out of their general lethargy and a
specific distaste for cooperation with the invaders. Any Arab who wants Iraq
to be free of outside forces should keep in mind the fact that the best way
to accelerate their departure is to help the country regain its stability.
That can only be achieved by reviving the economy, a mission that stands to
benefit mightily from Arab assistance and cooperation.

Apart from doing nothing to help the Iraqi people themselves, walking away
from this project would also be self-injurious for the Arab world at large.
Any contracts that companies from Egypt and Saudi Arabia refuse to pursue
will simply be gobbled up by their American and European competitors,
sacrificing jobs and revenues for the sake of stubbornness.

Iraq can be rebuilt and reshaped. Its own business community should be a
central part of the process by which this takes place, and its Arab
neighbors need to discard outdated notions of "saving face" by walking away
from what is both a moral duty and a lucrative opportunity. However strong
the reasons to resent the Anglo-American presence, arguments for full
participation in the recovery effort are eminently more compelling.




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