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Volume XIV (2003)
Book Review:
Iraq’s Burden:
Oil, Sanctions,
and Underdevelopment
Tanweer Akram,
5550 Columbia Pike, Arlington, VA 22204
Alnasrawi, Abbas. Iraq’s Burden:
Oil, Sanctions, and Underdevelopment. Westport, Conn.: Greenwood
Press, 2002. 180 pp. (cloth).
Alnasrawi’s recent book, Iraq’s Burden, is a timely one. His
earlier scholarly research on oil industry, OPEC, and Iraq’s development
planning and economic problems gives him a useful perspective on Iraq’s
economic problems and its origins.
This book is a valuable
addition to the literature. The author is a knowledgeable commentator on
Iraq’s economy. There are a number of books on the impact of sanctions
and war on Iraq. Although these books have discussed the geopolitics and
the consequences of the sanctions on Iraqis, none of these have dealt
primarily with Iraq’s economic problems. Alnasrawi’s book fills a lacuna
in the literature. He engages in a detailed discussion of the emergence
of modern Iraq and the evolution of its economic policies. He traces the
rise of Iraq’s national oil industry, the role of oil in the country’s
development, the consequences of Iran-Iraq war, the invasion of Kuwait,
and the effects of sanctions. Last but not the least he examines the
future prospects of Iraq’s economy.
Alnasrawi’s book is a thorough study with references to the relevant
literature and the available data. There is a paucity of reliable data
on Iraq since the Iraqi authorities decided to stop publishing national
income and product accounts in the late 1970s. However, the author makes
good use of available data and cites facts and figures from various
Iraqi planning documents available solely in Arabic. He also describes
Iraq’s developing planning processes and its limitations.
The
author goes over modern Iraq’s economic and political history. As
Alnasrawi documents, its modern history is marked by instability, coups,
countercoups, purges, wars, and sanctions. Iraq was one of the first
Middle Eastern countries to break out of the “concession system” imposed
on the Middle East during the colonial period by the oil majors. The
revolution of 1958 brought about major changes in Iraqi society. The
land tenure system was reformed. It also brought to an end the
enclave-type nature of foreign domination. Since 1958 Iraq was ruled by
middle class-led nationalist and authoritarian regimes (until the fall
of Saddam Hussein). The author shows that although Iraq succeeded in
increasing its oil income per unit of oil output, its economy continued
to become more dependent on oil. Iraq’s development program became
dangerously tied to the oil sector. Though Iraq was an agricultural
country, the authorities neglected the development of the agriculture
sector. Indeed the actual expenditure on agriculture was less than the
allocated amount. As a result Iraq became highly dependent on food
imports. He points out that the Iraqi authorities also did not devote
sufficient resources to develop the industrial sector. Nevertheless due
to the revenue generated by oil Iraq was able to make substantial
progress in literacy and education, health, social services, and
infrastructure. By the late 1970s it was a middle-income country with
impressive social development. The authoritarian regime provided out of
the oil revenue transfers in order to consolidate its political basis.
However, the relative material prosperity of Iraqis was not to last for
long.
The
oil supply shock that resulted from the Iranian revolution of 1979 made
Iraq the second largest exporter within OPEC. Iraq benefited from the
rise of oil price. However, the war with Iran led to a substantial
reduction of Iraq’s oil revenue due to the damage of its production
facilities and the difficulty of shipping oil from Iraq. With the loss
of exports, Iraq’s development plans were severely curtailed. Whereas
prior to the war Iraq was making progress, the war started the process
of Iraq’s decline. Alnasrawi gives details of the destruction caused by
the Iran-Iraq war. However, the end of its war with Iran did not end
Iraq’s problems.
Within two years of the end of Iran-Iraq war, the Iraqi leadership
brought the country to a conflict with Kuwait. Iraq had a long-standing
border dispute with Kuwait. But it was Kuwait’s policy of overproduction
causing downslide in oil prices that led to events resulting in the
invasion. Iraq regarded Kuwait’s action in the oil market as tantamount
to war. The Iraqi authorities claimed that a dollar reduction in world
oil price meant a US$1 billion in revenue loss per year for Iraq. It
also accused Kuwait of appropriating its oil through diagonal, slant
drilling in Rumaila field. It demanded that the loans given by Arab
countries, including Kuwait, to Iraq during the Iran-Iraq war be
converted to grants. When negotiations between Kuwait and Iraq broke
down, Iraq’s leadership ordered the invasion on 2 August 1990.
Comprehensive economic embargo was imposed on Iraq since 6 August 1990.
Even after the United States defeated Iraq and forced it to withdraw
from Kuwait, sanctions continued. The sanctions that were imposed on
Iraq were the toughest sanction the world has ever seen.
The
effects of sanctions were immediate because it was quite easy to shutoff
Iraq’s pipelines and prevent Iraq from exporting its oil. A post-war
study revealed the sharp collapse of household’s purchasing power in
Iraq. Post-war Iraq is characterized by high unemployment, inflation,
and substantial debt. The sanctions transformed a relatively successful
Arab middle-income country into a poor and devastated nation. At present
Iraq’s economy is in shambles and its people face tremendous hardships
and difficulties. The U.S.-imposed and U.N.-legitimized sanctions on
Iraq have been in force for more than a decade. The consequences of the
sanctions have been quite deadly. It is reported that more than one
million Iraqis have died due to sanctions. Researchers estimate that
more than half a million children have died as a result of the increase
in child morality. Child mortality has risen from a level that was
comparable to advanced countries to that of least developed countries
with chronic shortages of food or under civil war. Iraq is the only
case of sustained rise in child mortality in the last two hundred years.
Iraq’s water supply facilities and waste disposal system, its schools
and hospitals, its infrastructure and its oil industry are in shambles.
Iraq is barred from importing spare parts and critical equipment. The
sanctions destroyed Iraqi intellectual life and civil society and
strengthened the grip of the Iraqi ruling elite.
The
author discusses the sanction regime. Under the sanction regime Iraq’s
oil imports were heavily restricted. In fact even though Iraq was
allowed to export oil, it did not have control over its oil revenue,
which went to an UN-administered escrow account in New York. Iraq’s oil
revenue is used to compensate Kuwait and other claimants against Iraq
for war damages, purchase food and administer the oil-for-food program.
The oil-for-food program did not permit imports for the oil sector until
1998. The existing regime of sanctions and weapons inspection seems to
be work well for the UN bureaucracy. While the author provides a
detailed description of how the sanction regime operates, he does not
comment on this aspect of the UN sanctions. It can be argued that the UN
bureaucracy financially benefits from the oil for food humanitarian
program because it is probably one of the few self-financing
programs of the United Nations that does not rely on transfer of funds
from advanced economies. This program is completely funded by Iraq’s own
oil revenue. Therefore, it cannot be regarded as an aid program.
Alnasrawi examines the evolution of Iraq’s economic and covers the
devastating effects of the sanctions on the population in details. He
regards Iraq’s oil wealth as burden instead of a blessing. However one
can argue that the social system that has been fostered by Iraq’s oil
wealth as well as imperialist passion for control of its wealth that are
the country’s “burdens,” not its hydrocarbon resources. The author does
not emphasize the key role of the U.S. and the U.K. in perpetuating and
prolonging the sanctions. Throughout the 1990s though France, China, and
Russia occasionally expressed reservations about the continuation of the
sanctions, they had gone along with the Anglo-American elites. The Arab
regimes, such as Saudi Arabia and United Arab Emirates, did not really
voiced their dissatisfaction with the sanction regime. Moreover, one can
argue that other OPEC countries gained from the loss of Iraq’s market
share in the international oil market. Yet this is not an argument that
Alnasrawi considers.
The
author does not discuss the role of the Western countries in providing
military and financial support to the Iraqi regime during its worst days
of human rights abuse, slaughter of the Kurds, and attacks on Iran (Arnove
2002 and Parenti 2003). The U.S. and other Western countries were
providing Iraq with military intelligence and subsidies when the regime
was killing Iraqi dissidents and Kurds and fighting a war with the
Iranians. It was after the invasion of Kuwait that Saddam Hussein was
transformed into an official enemy. Until then, he and his regime were
worthy partners of the West. The U.S. had no qualms about permitting
American Type Culture Collection, a U.S. company, to supply spores that
could be used as biological weapons. Much of this is rarely mentioned in
current discussions about Iraq. It is barely discussed that U.S. war
planners had deliberated damaged Iraq’s water system, which is a war
crime.
At
times the book is a bit repetitive. Each chapter seems to have been
written as a separate article for publication in academic journals. The
same information is often provided in different chapters. Such
repetitions could have been judiciously edited.
Alnasrawi’s book remains a valuable contribution to literature on
economic development, the political economy of the Middle East, and the
literature on the history of geopolitics of oil. It provides a useful
background to Iraq prior to the second Persian Gulf War. It deserves to
be widely read by scholars and by citizens concerned about war,
occupation, and the new imperialism.
Volume XIV |
