Poor Suffer as Iraqi Elite Dodge Sanctions' Pain

TIMES STAFF WRITER

The worldwide sanctions against this nation are biting so hard, Iraqi dictator Saddam Hussein's cousin complained the other day, that he can't get medicine to ease his upset stomach or pesticide for his citrus crops. Even the ruling family, he contends, isn't immune.

"We don't receive any special things," said Abdul Rashid, the cousin, as he sat at his desk beneath a wall clock superimposed on a Hussein photograph. "We are all just Iraqi citizens."

But as the bearded 39-year-old spoke, he delicately smoked a succession of cigarettes from a pack imported in violation of the United Nations embargo. Later, he departed in his new, sanctions-busting black Mercedes-Benz, cruising past the broken-down vehicles of ordinary Iraqis on the streets here.

Although five years of U.N. sanctions designed to bring Hussein to heel have taken a huge toll on ordinary Iraqis, they have had little effect on the president's large extended family or the 1 million or more Iraqis with political ties to the ruling party.

Worse, they have created a new class of Iraqi profiteers, among them the political elite whose wealth now depends on sanctions. Diplomats in Iraq these days maintain that most smuggling, black-market currency transactions and illegal oil exports are controlled by Hussein's clan and members of his Arab Baath Socialist Party.

"It's true that a certain group of people--mostly traders--has flourished under sanctions," said a European ambassador in Baghdad. "Only the average Iraqi wage-earner, who must rely entirely on his paycheck, is in deep trouble. His money just doesn't add up."

In this country of 18 million, the envoy added, there is a distinct elite of people close to power "and, although the general situation is getting worse, it is not so bad for them."

All that may help explain why Baghdad has been so slow to fully meet U.N. conditions for removing sanctions, which were imposed after Iraq invaded Kuwait, triggering the 1991 Persian Gulf War.

"Though many people still dislike Saddam Hussein, there also are a lot of people who have bought into the regime," said an American official who watches Iraq from Europe. "They make their money on the few goodies that are left. And it is those people who benefit from keeping Saddam in power."

To be sure, the effects of the embargo are evident across Iraq. U.N. sanctions limit Iraqi oil sales to about 15% of pre-Gulf War levels and prohibit the import of everything except food, medicine and humanitarian goods.

A government survey has indicated that half the country's civil servants have taken on second jobs to make ends meet. A U.N. report released last month shows a clear impact on children, with cases of malnutrition-related disease rising from 433 in 1990 to 20,544 so far this year and the percentage of babies with low birth weights increasing from 5% in 1990 to 22% this year.

Yet the marketplaces and fancy shopping areas of Baghdad, the capital, are bursting with a wide variety of imported goods--from computers to lingerie, brass trumpets to videocassette recorders--that have arrived overland from Jordan, Turkey, Saudi Arabia, even Iran, a longtime enemy of Iraq.

The prices, though, reflect the difficult journey to market. Most are beyond the means of middle-class Iraqis, whose average salary of $1 a month is barely enough to buy two pounds of flour. Most people manage to get by thanks only to government food ration cards, which provide about half their daily requirements.

In fact, the only thing that is cheap in Iraq, which sits atop the world's second-largest reserve of oil and natural gas, is gasoline; a tankful costs about half a U.S. cent.

Inflation is galloping at 10% a month; the value of the Iraqi dinar against hard currencies required to buy imports has fallen 75% in the past year alone. The availability and high prices have bred broad resentment of merchants, once part of a highly esteemed class in Iraqi society.

"Some of these people are completely corrupt," said Amal Khedary, a Baghdad resident. "People used to be proud to say, 'My father is a merchant.' Now they are ashamed to say it."

In the midst of this suffering, two groups of people are flourishing--the country's 4 million peasant farmers, who have found sudden demand for domestically grown food, and those Iraqis fortunate enough to be close to the political power structure.

The advantages of political and family connections are nowhere more evident than in Tikrit, a wind-swept town about a two-hour drive north of Baghdad.

At the entry to Tikrit is a large stone monument to the leader, which features an elaborate portrait of Hussein, pistol raised triumphantly in the air.

This is where he went to school before becoming a political revolutionary, and where his birthday is celebrated every year with great fanfare. At the Tikrit Secondary School for Boys, a worn record book shows that the 16-year-old Hussein won high marks for everything from mathematics to "behavior."

The school still serves the newest generation of Hussein's extended family; five of his relatives are now enrolled. And it is one of a handful of public schools in Iraq that haven't been affected by the sanctions. Classrooms have plenty of modern desks, televisions and computers; the halls are made of marble. Some years ago, Hussein returned for a visit and gave each of his former teachers a new American automobile as a gift.

Hussein's relatives live in Owja, a small village just outside Tikrit. Owja is a kind of Palm Springs on the Tigris River, closed to ordinary Iraqis. There, Hussein's cousin Rashid and other relatives live in palatial luxury, protected by guards and antiaircraft guns, and reportedly with access to low-priced goods.

Shehab Ahmed, a spokesman for the governor of the province, declined recently to talk about the village. Pressed for information, he pleaded: "Please, just don't ask me any more questions about Owja."

Rashid says he doesn't see much of his powerful cousin. But, he added, "even if we don't see him, the president sends people to look after us."

No one is looking out for ordinary Iraqis, though. With an airport closed by sanctions and the media controlled by the government, Iraqis are starved for information from the outside world. The only legal way to enter the country is on a highway from Amman, Jordan, that winds through Syria, a 14-hour ride across desert.

The rare visitors often bring children's medicines and English-language magazines for friends in Iraq, knowing that those items are in much greater demand than such things as cigarettes or liquor.

For all their suffering, though, the average Iraqi blames the United States, rather than Hussein, and diplomats say a popular uprising is unlikely. Any attempt to oust the Iraqi leader would probably have to come from within the inner circle of power, which is making money from the sanctions.

While most Iraqis are proud of the government's successful postwar reconstruction, they are baffled by the construction projects under way these days across the capital. While hospital workers can't afford the soap to keep their floors clean, a new, needle-shaped structure, with a revolving restaurant, has been added to the skyline. A vast, dome-shaped war museum has been built, and several huge palaces are under construction.

Government officials contend that the palaces are designed to be "guest houses" for visiting dignitaries. They say the homes are being built with material left inside the country, as a way to give jobs to citizens.

Iraq has baffled U.N. officials by refusing to agree to a recent plan to allow the country to increase its current $1-billion annual limit on oil sales and open the way for the import of more humanitarian goods.

"If they would just accept the resolution, it would alleviate some of the trouble," an American diplomat in Europe said. "Our goal is not to reduce people to the level of abject poverty. What we want is compliance."

But accepting the resolution, this official contends, "would cut into the distribution network controlled by the Iraqi elite."

Hamid Youssef Hammadi, Iraq's information minister and former secretary to Hussein, says the resolution is unacceptable, because it would impinge on Iraq's sovereignty. "What is being offered is not that we could sell more oil but that we could pump more oil, and then the U.N. would decide how much food we could have," he said. "This embargo is nothing but a weapon of war."

Iraq is resisting the oil-sale plan, but it is Washington that has blocked moves to lift the full array of U.N. economic sanctions against Baghdad. Iraq has yet to meet certain conditions--including elimination of its weapons of mass destruction--and U.S. officials say Baghdad cannot be trusted to comply with long-term monitoring to prevent the re-emergence of another war machine.

Hammadi admits that the country's credibility has been hurt by recent revelations that Iraq had biological weapons and nearly used them in the Gulf War, an admission that was made only when a senior Hussein aide defected.

"We want to comply, but we have this problem of credibility," Hammadi said. "In the last four years, every time we think the file is closed, something creeps up that gives us a bad reputation in the rest of the world."

For now, the government's strategy is to wait, confident that its people will continue to blame the United States for their plight.

"The United States hates us, because we are the only country you cannot control," said a top official in Hussein's ruling party. "We are not American clients. But with 150 billion barrels of oil under the ground, sooner or later you will have to come and deal with us."

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