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. Last Updated: 07/27/2016

Iraq Jubilant Over Oil-For-Food Deal

BAGHDAD -- President Saddam Hussein's government Thursday declared victory and proposed talks to normalize ties with Washington after the oil-for-food deal with the United Nations cleared its last political hurdle.


"It's a victory of Iraq's determination," the official Al-Qadissiya newspaper trumpeted after the UN sanctions committee in New York approved a formula for setting oil prices under the deal signed in May.


The approval came after Washington dropped its resistance to Iraqi demands that the prices reflect international rates.


Iraq's information and culture minister, Hamed Yussef Hammadi, said his government was "still ready to discuss normalization" of ties with Washington, which have been broken since the 1991 Gulf War over Kuwait.


"We now hope the United States realizes it is better to enter political discussions with Iraq with a view to resuming relations between the two countries and give up its political goals hostile to Iraq," Hammadi said.


The minister regretted that Washington "persisted in trying to maintain the embargo and air exclusion zones as well as interfering in Iraq's internal affairs and seeking to overthrow the Iraqi government."


Washington wants Iraq to comply with all UN resolutions ending the Gulf War, not just those calling for Iraq's disarmament, before the oil embargo is lifted. It has also imposed no-fly zones in southern and northern Iraq.


Iraqis in the capital celebrated by firing automatic weapons into the night sky after state-run television announced that the final hurdle had been cleared to implementing a deal aimed at easing the sanctions.


"It's a new life that starts for us," said Saad, a young Baghdad resident.


The shooting lasted for about an hour before residents heeded a government warning broadcast on television that they could face prosecution.


Although the price formula has been approved, technical details such as repairs to a metering station on the Iraqi-Turkish pipeline and finding housing for UN monitors have still to be resolved before Iraq can begin exporting oil.


The breakthrough came Monday, when Iraq stopped asking to reduce the number of UN observers tasked with ensuring Iraq abided by the terms of the deal. It had also asked for a role in appointing them.


UN officials said that UN Secretary General Boutros Boutros-Ghali was expected to give the green light for the deal early next month.


The deal allows Iraq to export $2 billion worth of oil every six months -- around 600,000 barrels a day at current prices -- to raise money for food and medicine to ease the suffering of the civilian population.


It will come into effect the day after Boutros-Ghali reports to the council that all of the preparatory steps have been completed.


Iraq, which is to remain under UN sanctions imposed after its 1990 invasion of Kuwait, is confident that Iraqi oil will begin flowing by Dec. 10, but UN officials are more cautious.


Boutros-Ghali confirmed that he planned to deploy a total 32 customs agents to check the arrival of humanitarian goods and 159 distribution observers -- 151 on the ground and eight others at UN headquarters in New York.


The arrangement provides for a New York escrow account to control the oil money, and for four oil overseers here to approve the contracts.


Boutros-Ghali said that $1.3 billion would be set aside every six months for buying much-needed food and commodities for the Iraqi people. The figure also includes $145 million to help repair Iraqi infrastructure.


Part of the remaining $700 million would be transferred to the UN Compensation Fund handling claims arising from the invasion of Kuwait.


The rest would be used to meet the costs of the UN Special Commission responsible for disarming Iraq, and operational and administrative costs.