Reduction in Oil-for-Food Program for Iraq - 2002-08-07

A senior United Nations official expresses concern that the reduction in Iraq's oil sales will harm the humanitarian aid program for the country. Benon Sevan, head of the UN's Oil-for-Food program, states that by the end of November this year, the Oil-for-Food program will face a budget cut of one billion nine hundred million dollars unless there is an increase in Iraq's oil exports. The budget for the Oil-for-Food program is funded through the sale of Iraqi crude oil. The program was established in 1996 to mitigate the impact of UN economic sanctions against Iraq. Following Baghdad's invasion of Kuwait, the UN imposed economic sanctions on Iraq. In a letter on Tuesday to the UN Security Council, Sevan strongly urged the resolution of the dispute over Iraq's oil pricing policy, as this dispute, according to Sevan, has led to a reduction in Iraq's oil exports. Britain and the United States, two permanent members of the Security Council, are asking Iraq to engage in pricing after arranging oil sales. Washington and London argue that this prevents Iraq from imposing additional costs on its exported oil, thereby obtaining cash amounts outside UN control. Iraq denies adding any additional costs, and oil buyers state that under the current circumstances, Iraq is struggling to export its oil.