Envoys Believe Iraq Is Capable of Long Holdout

Food supplies in Iraq are probably adequate to carry the country to the spring harvest of wheat and barley, foreign diplomats say, while key industries can continue to operate for the foreseeable future using borrowed parts from broken-down installations.

In interviews here during the past three days, half a dozen foreign observers agreed that the world trade embargo has not been in place long enough to bring Iraq’s economy fully to its knees. The sanctions were imposed by the U.N. Security Council to try to force Iraq to end its occupation of Kuwait.

Rather than collapse all at once, the diplomats declared, Iraq’s economy is slowly bleeding as farms and factories improvise to meet the immediate crisis.

These emergency measures, including the cultivation of fallow land to boost the next harvest and the use of worn industrial parts, may adversely affect production in the long run, the observers say.

“The sanctions have not been given enough time, that is certain,” one Western European diplomat and economic expert said. “The country is on a war footing, and all efforts are directed at keeping things together week by week.”

There was no agreement among the diplomats here on when, or if, Iraqi leader Saddam Hussein would yield and retreat.

“It is a race against the clock, except that no one knows when zero hour is reached,” remarked a Scandinavian diplomat with long experience in Iraq.

From the American point of view, the day is too far off.

“The U.S. military can’t keep troops and equipment in the gulf for the time it might take,” declared Joseph C. Wilson IV, chief of the American diplomatic mission here.

Referring to experiences elsewhere, Wilson added: “I’ve seen many an African economy grind down without collapsing.”

Iraq has been able to stretch food supplies with a combination of tactics. Flour rationing went into effect soon after the embargo took hold four months ago. Economic hardship has also reduced public consumption.

Before the Persian Gulf crisis, Iraq imported about 70% of its food. Mixing substandard grain with better-quality stocks has expanded supplies somewhat. Homemakers are also substituting locally grown fruits and vegetables for bread in their diets.

Rising prices on the black market for such staple foods as flour and sugar suggest that supplies are dwindling. Within a period of two days, the cost of flour on the black market increased by 30%, a shopper said.

Smuggling and Iraq’s sacking of occupied Kuwait have contributed to maintaining the Iraqi diet, at least in Baghdad.

Bags of flour, nuts, dried apricots and tea from neighboring Iran are on sale throughout the teeming Shurja market in central Baghdad.

Goods from Kuwait make a capricious mixture on store shelves: Rita brand corn oil, Grecian olives, Cadbury English chocolates, Pepsi Cola, large cans of liquid Cheddar cheese bearing the Arby’s fast-food label and even a candy called Slime Slurp.

Prices for the items are high, and there are complaints that merchants are selling even locally produced, unrationed products at inflated prices. In the Kadamiya district the other day, a group of women shoppers shouted complaints that the price of local river fish had doubled in a day.

“There is a risk for the government if discontent grows, although for now the situation is in hand,” a Western European diplomat said. The diplomat reported that goods are being smuggled from Turkey into the north of the country and from Jordan into the west.

The Iraqi government is abetting the trade and may be using its reserves of gold to pay for clandestine imports. Iraqi troops were reported to have looted $3 billion to $4 billion worth of gold from the Kuwaiti treasury when they overran that country.

To increase food supplies next year, the Hussein government ordered landowners to sow crops in idle plots or face confiscation of the land. In addition, fallow fields have been planted out of season to boost the next harvest. Disrupting the rest period for the land may reduce future yields, economic observers predicted.

“Of course, the future for Iraq is now,” an Asian diplomat said.

Damage to Iraq’s industrial base is harder to assess because reporters and diplomats are not allowed to visit factories, power plants and farms. Iraq has put a premium on keeping defense industries, oil refineries and power plants operating, diplomats believe.

If spare parts are out of stock, managers of critical industries have been ordered to scavenge them from other factories, even if it means closing them down.

“No one is going to let a power plant close for lack of a fuse if one can be grabbed from a rivet factory,” an Eastern European diplomat said.

Not everything can be replaced, and sticking with worn parts may eventually damage Iraq’s industrial base, diplomats predicted.

Imported fuel additives are in short supply, and the quality of gasoline and motor oil is deteriorating, threatening damage to industrial and automobile engines. The amount of chemical additives used to boost octane in gasoline has apparently been reduced, vehicle drivers say.

“My car knocks like hell,” the Scandinavian diplomat said, referring to an engine noise that generally signifies reduced octane.

A shortage of parts is evident in private transport. Theft of parts from carelessly parked cars occurs often on Baghdad streets, leaving furious owners in search of replacements on the thriving black market.

The army is having some difficulty finding spare parts for trucks and jeeps and has begun to dismantle unrepairable vehicles to keep others in the fleet running, diplomats note.