NO REST FOR IRAQ'S WEARY

Created: 6/20/1995

OCR scan of the original document, errors are possible

of Near Eastern and South Asian Analysis

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ve:e: ea.

Rest for Iraq's Weary (U)

Living conditions for average Iraqis continue to decline because of inflation, wage stagnation, social deterioration, and government ineptitude. Many formerly middlr-class Iraqis now live in near poverty, breeding resentment against the regime and the United Stales. Some population groups, however, particularly farmers and those wish close lies to Saddam, are coping relatively wtH (CNF)

Regime officials have expressed both public and private concern oyer the state of the Iraqi economy, but the government has not adopted policies that would alleviate suffering inas accepting UN. Popular disgruntle men! is likely to grow as living standards decline. However, an average to above average harvest thisnow appearsbenefit the regime and reduce the need for further ration cuts.F)

Iraqis arc buffeted by inflation, stagnant wages, deteriorating social conditions,corruption and ineornpetence. The Iraqi people face continuing erosionstandard of living after almost five years of UN sanctions. Pnce increasesfood commodities have moderated in recent months compared withut reduced government rations have dramatically increased theliving for mostamily of four must now spend0inars before the ration cut last October_ to .supplementto meet minimum daily caloric

Wage increases have not kept pace with the rising cost of living

khe average wage in Iraq wasinars per month inore than doable the amount needed to make supplemental food purchases on the open market Press repoits indicate that the

' Th* nuoo lynem provide* Iraqi* ftoui. iujn,oakui( oil, and scene pwjonil hygiene prajixtl every nsoerth alOKI ot aboutbnart. Tho quality o( (heromptlnj tome Iraqi* to barter their rtfiom on the open market tor malletof betterCNF)

1jjcciei per day. It ien fc-wa calorie* pa day. hul Ibe cm* of malnutrition ii incieawxi. (U)

WASN1HG NOTICE INTcLUnESCii SOURCES OR NttflWODS INVOLVED

average wage currendy isinars per month--slightly more lhan one-fifth the amount required to provideamily of fomj

Economic conditiotis have forced many formerly middle-class urban Iraqis. Including some mem ben of the regime's security services--into near poverty]

markets were generally well stocked, few people coma arrr-ra

to makeould not afford mam

basic needs.

regime's security apparatus-had sold personal belongings to raise money to feed their families,

Crime and corruption add to the hardships of daily life in Ihe country.

discharged military personnel often rum to crime because they cannot

findare robbed frequently in Baghdad and

that even police officers have broker, into

criminals can babe the police lo avoid arresi and that corruption pervades ihe judicial systcmj

Regime, United States Blamed While Some Prosper

Although the repressive security apparatus in Iraq precludes open discussion of economic conditions, intelligence reports indicate that most Iraqis blame both the regime and the United States for their current plight. Iraqi businessmen believe the

regime does not care about the plight of average Iraqis^

fmd would "let Baghdad bom" so long as regime insiders could maintainIraqis believe the regime

intentionally maintalm puui minimum iu uxy ucuuicTOCused on daily survivalopposition to theIraqis

Increasingly believe the United States prefers to nTaintain the status quoeakened regimeuffering population.!-

Some segments of the Iraqi popolarion have prospered because of the economic distortions caused by sanctions and the regime's economic policies. Farmers have fared well in comparison to city dwellers because agricultural production is highly subsidized and farmers get high prices for most crops. Other groups doing comparatively well include:

Merchanu--especially those with oes to the regime-involved in importing goods for sale on the open market

Members of Saddam's family and clan, as well as senior militaryofficials. Regime insiders receive preferential accessoften arc

exempted from rations or receive extra rations. Many members of Saddam's family-including his son Uday and his son-in-law Husayn Kafnilr-control extensive business interests and export oil from Iraq.

(Jorernmerit Response Inadequate, Outlook Dim

Iraqi officials have expressed private and public concern about living conditions in the country, but the regime's overall response to declining living standards has been ineffective.

Media outlets regularly cany stories lamenting price increases and attacking merchants for gouging their customers. Nonetheless, the government pursues policies-such as printing excessive amounts of dinars and controlling the free market- -thai increase the difficulties facing the country. Baghdad has rejected UN Security Council, which would allow Iraq to export up toillion worth of oil to purchase humanitarian goods as well as fund some UN operations and compensate victims of the Gulf war.

The regime has shown no inebriation to take steps lo improve living conditions in Iraq-such as diverting more resources to procure necessary imports. Despite deteriorating conditions, Saddam refuses to accept anything shortotal u'fting of sanctions, as underscored by his recent formal rejection of UN.esult most Iraqis will find it increasingly difficult to support their families, while select groups will continue to prosper. Among the Iraqi publtc-cunently consumed by the task ofivmg-disgmnilcrncnt will grow as living standards decline. The results of this spring's harvest willtrong impact on the regime's ability to meet popularreliminary analysis of this year's harvest, currently under way. Indicates that the crop is average or above average-reducing the need for Iraq to spend hard currency on imports and forestalling the discontent that would follow further ration cuts.[

Original document.

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