Iraq Avoids UN Dues By Crying Poverty

by Thalif Deen

(IPS) UNITED NATIONS -- Iraq's U.S.-installed interim government, which is planning to spend some two billion dollars on its military this year, has declared it is too poor to pay $14.6 million it owes the United Nations.

"Iraq was not in a position to pay what it owed to the United Nations, although it hopes to do so next year, when oil production has increased," the interim government says in a letter to the UN Committee on Contributions, transmitted through the Iraqi Mission to the United Nations.

The committee has accepted the argument that the government in Baghdad is unable to pay the accumulated arrears because of "the devastation wrought (to Iraq) by more than two decades of war and the effects of a decade of international sanctions."

"The argument is ridiculous, to say the least," a UN official told IPS, speaking on condition of anonymity.

"The (U.S.-run) former Coalition Provisional Authority (CPA), which is now being accused of misspending hundreds of millions of dollars in Iraq's oil revenues, did not think it fit to pay the country's UN dues even while it was pleading for UN assistance to help the reconstruction of Iraq," he added.

The letter also says that living standards in Iraq have fallen sharply and the country faces a high level of unemployment. "Although Iraq has enormous potential, with large oil reserves, hydroelectric potential and a skilled population, the immediate problems of reconstruction are vast."

Additionally, the letter says the country has been saddled by the previous regime with external debts amounting to about $120 billion.

The non-payment of UN dues puts Iraq, with the world's second largest oil reserves -- amounting to over 112 billion barrels -- in league with some of the planet's poorest nations, including Benin, Chad, Somalia, Liberia, Niger and Tajikistan, who are also deemed deadbeats.

All of these countries are also on the verge of losing their voting rights in the General Assembly for non-payment of their accumulated assessed contributions.

Striking a note of sarcasm, Jim Paul of the New York-based Global Policy Forum told IPS, "The Iraqi government should perhaps ask Halliburton to help them out."

The California-based U.S. company, with ties to U.S. Vice President Dick Cheney, received billions of dollars in Iraqi contracts, some without competitive bidding.

"The fact of the matter is that paying your annual dues to the United Nations is of symbolic importance, even though the amount is ridiculously small," added Paul.

He said that Iraq's excuse to not pay its dues is perhaps a message it wants to convey to the United Nations: "You guys did not go along with the United States and the United Kingdom" on the invasion of Iraq, "and now you don't have even your people in Iraq because of security reasons."

"It is a way of sticking its finger in the eye of the United Nations," Paul said. In effect, the Iraqi government is saying: "the United Nations is not one of our priorities," he added.

"With all the billions of dollars U.S. taxpayers are spending on Iraq, the 14 million dollars should be peanuts," he added.

The UN committee says it recognizes "the exceptional problems faced by Iraq and the complex transitional process under way, and has concluded that the failure of Iraq to pay the minimum amount necessary to avoid the application of Article 19 (of the UN Charter) was due to conditions beyond its control."

As a result, the interim government has been given till June 30, 2005 to pay its $14.6 million in accumulated dues.

Article 19 says a UN member state "which is in arrears in the payment of its financial contributions to the organisation shall have no vote in the General Assembly if the amount of its arrears equals or exceeds the amount of the contributions due from it for the preceding two full years."

After the United Nations imposed sanctions on the former government of Iraqi President Saddam Hussein in August 1990 for invading neighboring Kuwait, Baghdad stopped paying its UN dues.

Last week, the CPA's auditor general released a report critical of how the body kept accounts when it was in charge of running Iraq from May 2003 through June this year.

The CPA used money seized from the Hussein government and Iraq's oil revenues to pay for 1,928 contracts worth more than 847 million dollars.

The report said that in one glaring case, officials of the former CPA did not have any records to justify spending $24.7 million to replace Iraq's currency. There were also excess charges of more than three million dollars on an oil pipeline repair contract.

The auditors also found that 29 of the 43 contracts had incomplete or missing documentation. "We were unable to determine if the goods specified in the contract were ever received, the total amount of payments made to the contractor, or if the contractor fully complied with the terms of the contract," they wrote.