Iraqi Kurds were anxiously glued to their TV screens when the UN Security Council began discussing the lifting of the embargo on Iraq and replacing it with "smart sanctions".

Baghdad argues that sanctions are the sole reason for the misery of the Iraqi people. But the Iraqi Kurds have a different experience.

In 1996, the humanitarian situation was deteriorating rapidly as the sanctions imposed in 1991 began to bite hard.

Child mortality rate among the Kurds is lower than before the sanctions

The UN introduced the oil-for-food programme as a temporary measure. Iraq would sell some of its oil with the revenue to be used by the UN to provide the Iraqi people with food and medicine and to restore the infrastructure.

Food basket

Despite all the complaints about the programme, the Kurdish region is undergoing steady development.

The region receives 13% from the proceeds of the oil sale. A monthly food basket of 10 items and free healthcare are given to the people.

Previously, a whole family's salary was spent on food and medicine.

Shafiq Qazzaz, a minister in the Irbil Government, said: "I would like the oil for food programme to continue forever, but all good things come to an end."

According to a UN report published last year, the child-mortality rate in the Kurdish region is lower than before the sanctions. But the figures have almost doubled in the rest of Iraq.

The reason for this discrepancy between the Kurdish north and the rest of Iraq is that the UN directly implements the programme in the north with the co-operation of the Kurdish authorities.

In addition to providing security, the Kurdish authorities have mobilised their civil service to help the various UN agencies in their work. "We can truly claim that we have contributed to the relative success of the programme," added Mr Qazzaz.

Tackling electricity shortage is a major part of the UN's programme

Infrastructure in the Kurdish region was largely destroyed by Baghdad's 30-year war with the Kurds and the whole rural population was removed into collective towns near the big cities.

After the Gulf War, the Kurds returned to their villages. But rebuilding 4,000 villages and removing approximately 10 million mines was not an easy task.

The UN should implement income-generating projects so that our people can rely on themselves Nechirvan Barzani

A portion of the programme's funds is allocated to rebuilding the region's civil infrastructure. Various UN agencies and non-governmental organisations implement projects for electricity, water supply, sanitation, agriculture, health, education and mine clearance.

Kurdish grievances

Despite its success in the field of rehabilitation, the Kurds have many complaints about the programme.

The Kurds were not consulted or recognised as an authority in the area when the programme was first introduced after an agreement between Baghdad and the UN.

Projects implemented in the Kurdish region have to go through Baghdad. But the Iraqi Government has been blocking many projects and preventing international experts from entering Iraq.

The 13% share generated about $5bn for the Kurdish region. Baghdad's obstruction and UN bureaucracy have held back approximately $2bn.

Prior to the programme, farmers cultivated their land and sold the crops. But now, since food is being bought from outside, local produce has lost its value and farmers have lost motivation to cultivate their land.

Agriculture sector affected by UN purchase of food from abroad

"The UN should decrease the money spent on food and medicine", said the Prime Minister in Irbil, Nechirvan Barzani. "They should implement income-generating projects so that our people can rely on themselves."

Kurdish economy

Trucks hauling goods and fuel to and from the region generate large sums of revenue and create many business opportunities.

The region's mini economic boom is clearly evident in the stable exchange rate of the local currency.

The Kurds in the north use the pre-1991 Iraqi dinar ($1=17 dinars); whereas in Baghdad, new dinars are printed to pay salaries. A 'Kurdish dinar' now equals 100 new Iraqi dinars.

Businesses depending on the trade route will suffer if smart sanctions are implemented

The recent talks of so-called smart sanctions are creating anxiety amongst the Iraqi Kurds.

The proposed system aims to clamp down on unofficial oil trade and this will have a direct impact on the Kurds' economy.

The Kurds have asked to be compensated for the loss they will sustain, should smart sanctions be implemented. But it will not restore their situation to its current one.

Nechirvan Barzani said: "They might compensate for our inability as a government to pay our employees' salaries but what about all the small businesses that rely on this trade route?"

Photographs copyright of Hiwa Osman