Gulf threat ‘is earning billions for Britain’
Leonard Doyle, The Independent, 22 October 1990, page 1
THREE of the five permanent members of the United Nations Security Council - Britain, the Soviet Union and China - are earning billions of dollars from higher oil prices brought on by the threat of war and UN sanctions against Iraq, according to an internal United Nations study obtained by The Independent.
The UN report also highlights enormous windfall profits totalling $154bn (£78bn) a year which OPEC and other oil-producing developing nations would make from the military stand-off, given an oil price of $40 a barrel. Norway would earn an extra $10.4bn from oil exports and Canada $2.7bn, the report says. (On Friday, oil was at $33.79 a barrel, down from the record high of $41.15 set the previous week.)
One of the conclusions being drawn from the study is that Britain, the Soviet Union and China may have an economic interest in maintaining the present level of conflict with Baghdad, providing it does not escalate into war. The economic gains to Britain, estimated at $6.2bn a year, may explain the hawkish views expressed by some government officials since the 2 August invasion of Kuwait by Iraq.
The gains to Moscow - a staggering $24.3bn - may partly explain, too, why it so readily supported the sanctions resolutions against its old customer, China will gain an additional $2bn a year from higher priced oil exports, according to the UN's Department of International and Social Affairs.
The US, which stands to lose $46.5bn a year at the $40-a-barrel price, has been shying away from talk of war and taken up a number of diplomatic initiatives, including UN resolutions, designed to put pressure on Iraq and to refocus international attention on the campaign against president Saddam Hussein, while putting off any decision on a military offensive.
A stark example of this trend was Washington's decision to tone down Margaret Thatcher's call for a UN resolution charging Iraq with war crimes and demanding reparations. US diplomats feared that such a resolution would cut off any room for manoeuvre or negotiation by sending a signal to the Iraqi leadership that they would inevitably have to face tribunals modelled on the Nuremberg trials of Nazi war criminals.
Some diplomats suggest that the sudden redistribution of income and wealth, comping on top of a recession brought on by the crisis, has given the US the incentive to seek a rapidly negotiated settlement with Iraq.
The leak of the UN's estimates of the winners and losers in the conflict to date is also expected to lead to calls from US politicians for more burden-sharing by the countries gaining from the higher world oil prices.
US diplomats at the UN are already discreetly floating ideas for a face-saving settlement of the conflict, involving a total Iraqi withdrawal from Kuwait, with UN peacekeeping forces being installed on the disputed islands of Bubiyan and Warbah and on the Kuwaiti section of the Rumeilah oil field, pending international arbitration.
Middle East crisis, pages 9, 10
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