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Can elections distract from economic woes?

President Saddam Hussein has ordered the Iraqi government to stop printing money to try to contain runaway inflation and a plummeting dinar, Baghdad newspapers reported at the New Year. The move was an apparent acknowledgement of the economic devastation caused by more than five years of UN sanctions against Iraq after its invasion of Kuwait in 1990.

"We are in a real battle. For no military victory can make up for an economic defeat ... This year, we would like to say that the first practical step in the right direction that we can take is to halt the deterioration. That is, we should not allow the exchange rate of the Iraqi dinar to suffer any further setbacks," the Iraqi news agency INA quoted the president as saying.

Saddam Hussein said the amended budget for 1995 should be reduced and that projects planned for 1996 which have not yet been implemented should be reconsidered. New projects should not be started unless the revenue they are likely to produce exceeds the amount spent on them. Investment projects should be turned down unless they are aimed at increasing production considerably at an existing facility, he added. The president also urged ministers to examine the possibility of increasing state income by introducing new taxes and cancelling exemptions.

The Iraqi dinar lost almost 20% of its value against the dollar in the last two weeks of 1995, while food prices have soared because of the continuing impact of the sanctions.

Iraq's official newspapers, radio and television carried the text of Saddam's address to a cabinet meeting in which he said drastic economic measures were needed. But although Saddam's remarks were made on 2nd December, there was no explanation as to why they were not reported by the Iraqi media until the very last day of 1995.

The Iraqi president called for an immediate halt to the printing of money, for belt-tightening measures in state ministries and enterprises, the imposition of new taxes and the sale of state property.

Reuters news agency reported diplomats in Baghdad as saying the new measures indicated that Iraq did not expect sanctions to be eased in 1996 and that the Iraqi government would resist pressure to accept UN conditions that would allow limited sales of its oil.

The dollar was trading at about ID2,900 at the start of January, up from ID2,500 in mid-December. Reuters said the price of one kilogramme of sugar had jumped to ID1,600 from ID1,300, chicken increased to ID4,000 from ID3,000 and lentils to ID1,600 from a previous ID1,000.

Iraq's official press reported in 1995 that the government had paid Iraqi farmers some ID400 billion for their wheat and barley harvests, now being sold to the public at giveaway prices. A UN Food and Agriculture Organisation (FAO) report last year noted that food prices had rocketed by 4-5,000 times since sanctions began.

Saddam Hussein said new taxes and an increase in the prices of state services to meet the costs involved would withdraw excess dinars from circulation.

The government has already unveiled some measures. They include the sale to the public of hundreds of government vehicles, including some used by the president and his office. The Trade Ministry has been selling household goods including fridges, air conditioners, carpets and television sets at prices 10% below the market rate. Traders in Baghdad told Reuters that at least one billion dinars were entering the state's coffers every day.

Saddam Hussein made it clear in his message that there would be no increase in salaries in 1996, but at the same time promised to protect the living standards of low-income civil servants.

Meanwhile, plans are going ahead to hold National Assembly elections promised for early 1996. A new law issued by the Revolutionary Command Council after a series of meetings chaired by Saddam Hussein said the president would set the date of the elections, which should be announced 60 days before the vote is held.

Iraqi newspapers said the law was issued "in accordance with President Saddam's directives to enhance democracy and constitutional establishments".

The government had promised to hold parliamentary elections early in 1996 after Saddam won a presidential referendum - with 99.96% of the vote - last October giving him another seven years in office. There were no other candidates.

Iraq says it will also set up partially elected local councils, in line with other measures announced in recent months apparently seeking to improve the government's image abroad. The councils will be formed in every town, with two-thirds of their members elected by the people and the other third made up of government officials. The councils will discuss and approve "social, educational, economic, financial, religious and security issues in each district", according to INA.

Iraqi officials say the recent reform gestures, which include a promise to allow the formation of political parties other than the ruling Baath Party, are a transition from "revolutionary legitimacy to constitutional legitimacy".

But Iraq-watchers abroad say the notion of democratisation has more to do with Saddam Hussein's constant playing of a game of patronage within Iraqi politics. Seasoned Iraqi watcher Charles Tripp of London University's School of Oriental and African Studies, notes: "Over the last 10 years Saddam Hussein has heavily favoured his family and tribal groupings, who clearly began to believe that they had a right to be there, they were privileged and no one could touch them other than of course Saddam Hussein".

Now that the Iraqi leader has had to deal with mounting trouble within his family circles, with some relatives defecting abroad and others having to be dismissed, to threaten them with a multiparty system is, as Charles Tripp puts it, "a very useful way of reminding them of the degree to which they depend upon him."
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Author:Feuilherade, Peter
Publication:The Middle East
Date:Feb 1, 1996
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