COLUMN ONE : In Postwar Iraq, Fear Is the Foe : Consumers stock up on overpriced goods, pawn family treasures and take second jobs. Crime is rising, too.

Jewelry stores are doing a bustling business in Saddam City, the sprawling, poor section where 1.5 million Baghdad residents live. But the jewelers are not making many sales.

“We buy more now,” says a jeweler in one of half a dozen small stores in the raucous marketplace, as another woman customer enters carrying a purse containing earrings and a gold bracelet set with pearls. He weighs the items and quotes a price based on their gold content. The woman accepts, takes the money and puts it in her purse.

It is no casual, pawnshop transaction. Women are selling their jewelry--items from their dowries or gifts from their husbands, a family’s life savings in a place where people do not have bank accounts--to raise cash to buy food and other goods.

This is Iraq today, a country trying to cope with a changed economy, with fears of attack from abroad and of civil unrest within and with the aftermath of a decade of almost continuous war. The pressures are changing Iraqi society.

Even as President Bush vowed Tuesday that the United States would not permit the “suffering of innocent women and children” in this war-ravaged country, hardships continued.

Prices of flour, rice and sugar have doubled in recent weeks as Iraqis have stocked up out of fear that renewed U.S. air attacks are coming on or near today. That is the deadline set by the United Nations for President Saddam Hussein’s government to divulge full information on its nuclear and other weapons programs. Bush has indicated military action might be a possibility if Hussein is hiding his nation’s weapons capability.

The people of Baghdad don’t fear bombs, which would be aimed at military targets, so much as they fear a return of food shortages and cuts or interruptions in their electricity and water. So, even though they now feel air strikes might not come today--”perhaps it will be another week,” says one Iraqi--they are stocking up.

And that has further escalated prices that already were high after 11 months of economic sanctions, which prevent normal exports and imports but encourage smuggling.

Goods are coming into Iraq from neighboring Jordan, Turkey and Iran. But the smuggled items are expensive. A kilogram (2.2 pounds) of sugar costs a day’s pay; a kilo of meat costs nearly three days’ pay for a government worker who makes what used to be a good salary of 200 Iraqi dinars a month.

The official exchange rate remains $3.20 to the dinar. But the currency’s true purchasing power is closer to the black-market exchange rate--used openly by banks in Jordan and almost openly in the Baghdad marketplace--of only 13 cents to the dinar. At that rate, 200 dinars a month is no longer a living wage, especially as government rations of subsidized food have been cut back severely.

So, the Iraqis--whose fear of the repressive government they live under is still so great that few are willing to even give their names when interviewed--are working at second jobs. They are selling their household goods to raise cash.

The Iraqis’ economic distress is showing up in other ways. Prince Sadruddin Aga Khan, the U.N. delegate for Humanitarian Operations in Iraq and the Persian Gulf, has just reported to the U.N. Sanctions Committee that criminality is on the rise in Iraq.

Every report in Baghdad confirms his assessment. In some well-to-do neighborhoods of the city, no house has been spared from burglary; car theft is epidemic. Stolen cars are broken up and sold for spare parts--much in demand to keep vehicles on the road.

In the Bayah district of western Baghdad, hundreds of car-repair shops feature new and used parts selling at more than double their pre-Gulf War prices. The new parts are smuggled from Turkey and Jordan; the used parts come from stolen cars.

Business is brisk. Car mechanics make good money. “In a good day, a mechanic can make 100 dinars,” says a worker at Mahmoun’s shop, one of many specializing in repair of Volkswagens and Toyotas, the two most popular makes in Iraq.

Told that such a wage is more than a doctor earns, the mechanic scoffs that doctors, too, are doing well, charging liberally for evening visits by patients.

But the difficulties of Iraq’s doctors go beyond money. At Kadissiya Hospital in Saddam City, Dr. Nasser Shatha reports that her pediatric ward receives 15 children per day suffering from severe diarrhea, aggravated by malnutrition. And she says there are three cases of suspected typhoid fever at present. The typhoid results from contamination by raw sewage lying in huge puddles in the district’s streets, the result of sewage pumps that are broken or that no longer function because of interruptions in electricity.

“We cannot get enough medicine or equipment for intravenous feeding,” says Dr. Shatha. Humanitarian groups have contributed medicines, she says, but it is not enough. In her ward, there are several emaciated babies, some with infections resulting from immune-system breakdowns, she says.

But the ward is not full, and other children bounce around on their beds, cared for by mothers or sisters--the custom being that family members, and not professional nurses, care for the sick. The suspected typhoid cases, which must be confirmed before the patients can be moved to specially equipped hospitals, lie listlessly, as children do with fever.

“We cannot even get solutions for testing,” complains Dr. Ahmad Razzak, who treats adult patients in another part of the 350-bed hospital. He reports shortages of dialysis fluid for kidney patients, of insulin for diabetics and of digoxin for heart patients.

“Our supplies have been cut since the invasion of Kuwait,” he says, using blunt words not often heard from Iraqis to describe last August’s military adventure.

Dr. Razzak is angry with the United States. Although the U.N. sanctions are supposed to allow humanitarian shipments of food and medicine, he says he has not seen such supplies and wonders why innocent Iraqis--particularly children--must suffer. “There is a punishment you cannot give,” he says. “What excuse do you give to a baby, who has committed no crime?”

But his anger seems to be directed also at the Iraqi government for its suppression of the Shiite Muslim rebellion in southern Iraq after the war. “Conditions are bad here in the capital, but they are worse in the south,” he says.

Dr. Razzak is from the south--”from Najaf,” he says with feeling.

In Najaf and Karbala, two holy cities of Iraq’s Shiite Muslims, Iraqi troops shelled religious shrines, bulldozed houses and may have killed thousands, although no casualty figures have been released.

The enmity between Shiite Muslims and the government, whose officials are predominantly of the Sunni branch of Islam, has little to do with religion but much with power. The Shiites, a majority of Iraq’s population of 18 million, feel they have been excluded from political benefits, experts here say.

Fears of sectarian violence run high. Iraqi troops are on alert to prevent demonstrations this week, a period that includes some of the holiest feasts on the Shiite calendar.

Meanwhile, Hussein speaks these days of a “new chapter” in Iraq, in which political parties will reflect Iraqi society’s many groups. He has been meeting tribal and religious leaders from the south while continuing negotiations toward autonomy for the Kurdish minority of northern Iraq. And he has declared a general amnesty, pardoning political prisoners and army deserters.

Hussein’s purpose is twofold, say diplomatic observers: to defuse tensions in the country and to persuade the United Nations to ease or lift economic sanctions.

The United Nations is listening to suggestions from Sadruddin that Iraq be allowed to sell limited amounts of oil to buy food and medicine. The White House, expressing sympathy for suffering innocents, said Tuesday that it is considering proposals to ease the U.S. policy of strangling Iraq’s economy.

However, U.S. spokesmen repeated charges that Baghdad may have the means to provide for its citizens without oil sales.

For the Americans, the United Nations and others in the world community, any moves to ease the suffering of the Iraqi people must be weighed against the reality that Iraq, as a nation, still can be violent and unstable. Last week, for example, there was a clash between Iraqi troops and Kurdish guerrillas in Sulaymaniyah. Iraqi troop movements also remain under scrutiny in case they threaten political refugees in Iraq’s southern marshlands, where the United Nations has ordered Iraq to withdraw its forces.

Iraq’s isolation today is remarkable, less than a year after it loomed as the major power in the Arab world, diplomats here say.

They note that Hussein’s call for a meeting of the Arab League to protest U.N. sanctions has received no support from other Arab countries. “There is no sympathy for Iraq,” one diplomat says.

Meanwhile, the clearest sentiment discernible among the Iraqis is weariness with war. Iraq’s conflict with Iran lasted from 1980-88, and then there was the Gulf War that followed Iraq’s invasion of Kuwait.

After a decade of fighting, young men who went to war at age 20 are now in their early 30s. They have few prospects. Former army officers, for example, work as head waiters in government-owned hotels.

But these days, they receive few guests.

Foreign embassies report constant applications for visas. But, at the request of the Iraqi government, they are not giving out travel documents.

Still, some people manage to flee by various means. “I know five doctors who have left, and two more who are going,” says one man whose brother has left the country. “In a year, the only people you will find here are the dumb.”