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IRAQ: Smuggled oil hampering reconstruction

BAGHDAD, 25 Dec 2006 (IRIN) - Hundreds of health, education and infrastructure projects have been delayed because of corruption and the smuggling of oil, according to officials in the Ministry of Reconstruction.

"Hundreds of projects are being highly affected by corruption, especially in the oil sector. Education and health projects are the most affected as hundreds of schools need to be repaired and hospitals are hit by shortages of equipment and medicines. All this is a result of insecurity and also of increasing corruption in the oil sector," said Hassan Barakat, a media officer at the Ministry of Reconstruction.

Huda Hassan, director at al-Sadr Primary and Secondary School, said his school is an example of what could be done if corruption was stamped out.

"Our school needs urgent repairs. It lacks water and working washrooms. In addition, some classes had to be closed because the ceilings are failing," Huda said.

"We have asked the Ministry of Reconstruction to take urgent action on this and the only answer we've got all year was that there was no money to invest because of corruption in the oil sector, which is the main source of income in the country's reconstruction drive," she added.

Iraq's vital oil sector has lost US $15 billion due to smuggling, corruption and a deteriorating security situation, an oil ministry official said, adding that the money could have been invested in reconstruction to improve the living condition of millions of Iraqis.

"Corruption, constant attacks [against oil pipelines and installations] and also the dilapidated infrastructure of the country's refineries are the main problems we have nowadays," Assem Jihad, spokesman for Iraq's Ministry of Oil.

"Nearly US $750 million worth of oil is being smuggled out of the country each month. Reconstruction in Iraq would have been improved if this lost money had been invested. Hundreds of projects would have been finalised and hundreds others started," Jihad added.

Jihad said that Iraq, home of the world's third biggest oil reserve, now has to import oil products, particularly petrol, from neighbouring countries such as the United Arab Emirates, Kuwait and Iran, and has spent around US $1 billion doing so over the past six months.

"This is money that would have been enough to build hundreds of schools and import hundreds of medical equipment items to improve our people's health," he said.

As part of their campaign against the government and US-led coalition forces, insurgents have been relentlessly attacking oil installations and employees. As a result, Jihad said, Iraq's main three refineries - in Beiji, Basra and Kirkuk - are working at half capacity, processing about 350,000 barrels of oil per day, compared to about 700,000 barrels per day before the US-led invasion of Iraq in March 2003.

"Before 2003, the Beiji refinery, which is the largest refinery in Iraq, was producing more than 2.5 million gallons a day, nearly half what the country needed. But today, under difficult circumstances, it produces only about 400,000 gallons a day," Jihad said.

Iraq's Ministry of Reconstruction, formed since the occupation of the country began, said that half of its projects have been delayed due to a lack of funds that were supposed to come from the oil sector.

"Iraq has no other income other than from oil. We depend on this to improve the country's infrastructure, but it is now critically corrupt countrywide," said Barakat of the Ministry of Reconstruction.

"This is not our fault. The ministry is struggling to use what is remaining to cover the main reconstruction requirements, but billions are still required to improve the country's condition. It might take years before the results of reconstruction can be seen," Barkat added.

The above article comes to you via IRIN, a UN humanitarian information unit, but may not necessarily reflect the views of the United Nations or its agencies. UN Office for the Coordination of Humanitarian Affairs 2006

... Payvand News - 12/25/06 ... --

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