European Stars and Stripes (Newspaper) - October 19, 1990, Darmstadt, Hesse Iraq s Economy when will sanctions bite by Maggie Jackson associated press since its ancient Days As the granary of the Middle East the fortunes of the land now known As Iraq have turned on the tides of Trade. International sanctions have forced Baghdad to seek ways urgently to survive alone. Exhorting Farmers to grow More and citizens to eat less Saddam Hussein s government is trying to wean Iraq from a deep dependence on imports that Range from sugar to spare parts foreign analysts agree. With iraqis veil of secrecy drawn even tighter since the invasion of Kuwait on aug. 2, however no outsiders have a Clear picture of How its Economy is faring. Many analysts believe Iraq can make do until the Spring Harvest despite its pre invasion economic Straits and the increasing hardship sanctions will cause. Quot assuming their ability to substitute produce More and ration it s conceivable they could last six months Quot said Sharif Ghalib of the Institute of International finance in Washington . It won t be easy said Jonathan Crusoe who analyses Iraq for the Middle East economic digest because a they be been addicted too Long Quot to imports. Iraq once was Home to the ancient civilization of Mesopotamia which built an intricate irrigation system Between the Tigris and euphrates Rivers. It is a developing country but not a poor one. With its abundant Oil water and rain fed farmlands of the North Iraq is regarded As having the second greatest potential for economic development in the Region after Iran. Development has been hampered however by the costly eight year War with Iran that began in 1980, rigid state economic controls and extreme dependence on imports and the Oil sales needed to pay for them. Its foreign debt is estimated at $75 billion. This year Iraq was spending liberally on the military and industrialization despite declines in the Price of Oil which provided 96 percent of its income. Quot the picture was one of a growing Cash squeeze at a time when the iraqis were trying to provide both guns and butter Quot said Ghalib director of the Institute s african Middle East division. Since the invasion of Kuwait Iraq has become virtually an Island Economy its foreign assets Frozen and Oil sales blocked by . Resolutions. In retaliation it is refusing to people wait in Baghdad to buy rationed bread. Shoppers can spend hours in line As bakeries Are scarce. A repay All foreign debts. Analysts say the Lack of Money be a problem for Iraq since there is Little for it to buy unless smuggling increases or the United nations allows it to receive humanitarian food shipments. Iraq had about $6.5 billion in Gold and foreign Exchange at the time of the invasion the Institute in Washington said but it does not know How much of that was Frozen abroad. The iraqis Are believed to have stolen $1.6 billion in kuwaiti Gold and currency. The key to iraqis future lies in its factories and farms now dependent on imports. Iraq has progressed from making simple goods like bricks and blankets 50 years ago to heavy industries including a petrochemical Plant. In 1989, however manufacturing accounted for Only 14 percent of Gross Domestic product. The country depends heavily on foreign equipment parts and expertise As illustrated by the estimated 1 million foreign workers and relatives who were in Iraq. Few details on Industry Are available particularly because the War with Iran put civilian Industry under military authority. A report by the Middle East economic digest says a there is no Short term Way that Iraq can Start or increase Domestic output Quot of either spare parts or Industrial equipment. Despite iraqi claims that children might starve the analysts say no one has gone hungry because of the sanctions. Iraq imported 75 percent to 80 percent of its food however and is vulnerable. Quot extreme hardship will Likely be apparent by the end of the year Quot agricultural analyst Susan Epstein wrote in a report for the . Congress in september. Still with rationing and substitutions such As potatoes for Rice and dates for sugar the population of 17.4 million could last six months she said. The departure of thousands of foreign workers also will help. No major shortages Are apparent so far. Vegetables harvested in the fall Are plentiful and melons dates and other fruits abound. This Summers wheat Harvest was said to be double that in 1989, a drought year. Meat other grains and several Staples Are a problem. Rationing of cooking Oil sugar and bread began six weeks ago and two weeks later allowances were reduced by up to half. Livestock and Chicken an iraqi favorite depended on imported Grain and May have to be slaughtered. Quot tables should not be crowded with various types of food and fruit As they used to be Quot Saddam told iraqi women As far Back As aug. 12. If ill 3 a 14 the is and it Pes it no Kisill thunaty.0i.10bw 18. No a Emma r m it quake hardened fan of a s unfazed by Iraq s rumblings a Ture Mikat saudi Agama a Sam my Mii im4 Al u u. _ -11 a Whf a wow a a Ltd. A must Hlf Fum to . Ugloi a a it Ikhi it a in ii Urmia a in by a it Clu a a in if Ikjin but Lka him u Law Quot Mew Kef Uio i of Artw null Quot All Fhi. Cuba Tutti i Tiahrt Terry suit Bitch in act of t Uji Ali Sci Yunt 10 Wulw Itma a my 10 Iff u. A Kew. N Kuik m n Namuo it a it a t Iain lilt life i win Askuig Toh l he mho 4k Hud Mchill. 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