September 24, 2002
Iraq's Oil Exports

Since I don't trust the comments on Daniel Davies's website (enation having no sustainable business model, you see), I'm going to use this space as well to point out that his discussion of the terms of the Iraq oil-for-food program is in error.

The $4 billion a year limit he stresses was imposed by the 1996 UN resolution establishing the oil-for-food program, but this limit was more than doubled in 1998 and abolished in 1999.

IIRC, in 1998 Iraq exported $5.11 billion worth of oil, in 1999 $11.35 billion, in 2000 $17.87 billion, and in 2001 $10.99 billion--all compared to oil exports in the old days that averaged some $16 billion a year over 1986-1990.

None of this, however, should be taken to indicate that I approve of economic sanctions against Iraq. Economic sanctions are a very good way to raise mortality and create suffering among the toiling masses while having little if any effect on the standards of living and styles of life of the elite. Whether the economic sanctions put that much of a crimp in Saddam Hussein's military plans is not something I can judge.


D-squared Digest -- A fat young man without a good word for anyone: ...Forestalling the argument that "the reason people are starving in Iraq is that Saddam does this, that, the other instead of spending the money on food". It isn't so. Under the terms of the blockade, Iraq sells around $4bn of oil a year. The UN keeps 40% of this for its expenses and for reparations, leaving $2.6bn. That leaves around 36 cents per Iraqi per day, which is nowhere near enough to live on...

Posted by DeLong at September 24, 2002 01:11 PM | Trackback

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hrrrrm ... it appears I may have been working off old information. Damn the internet. A qualified retraction, smothered in caveats which imply that I was basically right, will no doubt be forthcoming soonish.

Posted by: DD on September 24, 2002 03:35 PM

Brad: Do the higher revenues from oil sales you listed include a factor for additional revenues from illegal sales through the Syrian pipeline and other known means Iraq has for evading the UN restrictions?

Posted by: Kurt Brouwer on September 24, 2002 08:12 PM

I'd add that of course one should put a whacking great caveat on any comparison of oil sales between 1990 and any year post 1991; obviously, the same level of oil sales isn't going to deliver anything like the same standard of living in a bombed-out economy!

Posted by: Daniel Davies on September 24, 2002 11:35 PM

For DD,

And another thing .... Once the real cash value of Iraqi petroleum exports in recent years is established, will you come at us again with the oil revenue per capital calculation? Your facts were wrong, sure enough, but you economic thinking is dreadful. I'm pretty sure I'd be hungry if I had to live on may share of US oil output, but somehow, I'm not hungry. Iraq is not an oil pump, it's a country. It has a farm sector, a factory sector, a bunch of other sectors that I could probably look up someplace. Where on earth did you get the notion that welfare is measured by oil export revenue per capita? Is life in Iraq wretched? Must be. Did you uncover any evidence? No.

K

Posted by: K Harris on September 25, 2002 09:30 AM

Make that "per capita"

Posted by: K Harris on September 25, 2002 09:32 AM

For DD,

And another thing .... Once the real cash value of Iraqi petroleum exports in recent years is established, will you come at us again with the oil revenue per capital calculation? Your facts were wrong, sure enough, but you economic thinking is dreadful. I'm pretty sure I'd be hungry if I had to live on may share of US oil output, but somehow, I'm not hungry. Iraq is not an oil pump, it's a country. It has a farm sector, a factory sector, a bunch of other sectors that I could probably look up someplace. Where on earth did you get the notion that welfare is measured by oil export revenue per capita? Is life in Iraq wretched? Must be. Did you uncover any evidence? No.

K

Posted by: K Harris on September 25, 2002 11:13 AM

The real question is what we're trying to achieve with sanctions against Irak. To me, they seem to be having the same effect as the as the Cuban embargo, that is providing a convenient outside ennemy for their respective dictators to crash all political dissidence under their local version of united we stand.

In the mean time, Iraki people keep on suffering... and they probably think it's our fault, which factually is quite correct... Images sometimes speak better than words.

What's the point? Well, try flipping the argument around for more than a second: what if we did something that would gain Irakis' "hearts and minds" for a change? And yes, that's kind of the way along which the United Nations has been trying to delute the situation in recent years.

Important reminder: Al-Qaeda were (are?) sponsored by the Saudis, not Hussein. But, true, Osama Bin Laden's family are personal friends of the Bushes... The fact that the UN is inclinded on something doesn't necessarily mean it's being lame or inconsistent, unless we define lameness and inconsistency as disagreement with the US government policy.

Posted by: Jean-Philippe Stijns on September 25, 2002 11:13 PM

>>Iraq is not an oil pump, it's a country. <<

Actually these days, it's a broken oil pump, not a country. I did in fact address this one on my weblog post, but think about it this way;

1) What would you guess would be the risk premium for investments in Iraq right now?

2) What would the US economy look like right now if it had been faced with that risk premium for the last ten years?

3) People starved to death in the Great Depression, didn't they?

dd

Posted by: Daniel Davies on September 25, 2002 11:37 PM

ftp://sailor.gutenberg.org/pub/gutenberg/etext91/world12.txt
http://www.umsl.edu/services/govdocs/wofact95/
http://www.umsl.edu/services/govdocs/wofact97/country-frame.html
http://www.cia.gov/cia/publications/factbook/

(1990, 1995-7, 2001)
Population: (18.5M, 20.6M, 23.3M)
Under age 14: (?, 48%, 41.6%)
Growth rate: (3.9%, 3.7%, 2.8%)
Birth/death per 1000: (46/7, 43.6/6.8, 34.6/6.2)
Infant mort per 1000: (67, 62.4, 60.1)
Life exp at birth, M/F: (66/68, 65.5/67.5, 65.9/68.0)
Total fertility: (7.3, 6.6, 4.8)
Literacy: (55-65%, 58%, 58%)
GNP per capita: ($1940+5%/yr, $1900+0%/yr, $2500+15%/yr)

Taking the CIA estimates as one bound, we next look at what Iraq is telling
the UN, and the UN is repeating irresponsibly to inflame the Berkeley steet:

http://www.middleeastwire.com/iraq/stories/20020108_meno.shtml

With 1.614M deaths (667K under age 5) directly attributable to sanctions,
we have a sanction-specific attributed death rate of 6.3 per 1000; in
short, Iraqis would have achieved immortality under Saddam's inspiration
had it not been for our intervention. The attributed infant mortality
is about 71.9 per thousand, so again the UN is being blamed for the
continued merciless subjection of the Iraqi people to the common lot.

Posted by: Joshua W. Burton on September 26, 2002 07:00 PM

Joshua, you are not "taking the CIA Factbook estimates as one bound"; you are treating them as gospel and measuring all other estimates against them. As regards the reliability of your estimate, note that the CIA, if your statistics are to be believed, has infant mortality falling over the period 1990-2001. The estimate of 60.05/1000 live births is much lower than UNICEF's numbers.

Posted by: Daniel Davies on September 27, 2002 08:14 AM

Agreed. I let my attention wander, and dropped what should have been a paragraph about the corresponding upper bound, from UNICEF and Iraqi numbers. It should be mentioned that Brad DeLong took the 2001 CIA number (for GDP) as authoritative, which is why I went there first, and further it should be reiterated that there is a close match between Iraqi _excess_ mortality figures and CIA _total_ mortality figures, psychologically consistent with the Big Lie in either direction.

The 1999 UNICEF study breaks into two parts: northern Iraq, where they were on their own, and southern, where Iraqi handlers dogged their steps. The former shows a steady declining death rate, comparable to the CIA demographics. The latter is in rough agreement with the Iraqi numbers, showing a rise in infant mortality from the high 40s to over 110 per thousand. The methodology is family survey rather than vital statistics tabulation, and it may be a cheap shot to observe that surveys identified more than ten times as many deaths in Jenin on the West Bank this spring as actually tallied up against named individuals when the dust cleared.

Still, the CIA numbers come with no stated methodology at all, certainly not on the ground in Iraq. All that can be said is that the age profiles and birth/death numbers the CIA gives over the decade are consistent with the cumulative population growth they assert. If the UNICEF figures are closer to the truth, then the next reliable survey of total Iraqi population will show a couple of million fewer people than the CIA claims. So it seems likely that we will eventually know the truth.

Tying this back to Brad DeLong's argument, I think we can say that people who believe the CIA will find a much weaker moral case for ending the sanctions by war than people who believe UNICEF. I have no strong brief for either side, but I certainly don't find a monotonically falling infant mortality rate for sanctions-era Iraq intrinsically implausible.

Posted by: Joshua W. Burton on September 29, 2002 12:27 AM

Sorry again---for "Brad DeLong", read "Daniel Davies", twice, just above. The author of the blog.

Posted by: Joshua W. Burton on September 29, 2002 12:30 AM
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