May 27, 2002
While the UN oil-for-food program (UN Security Council Resolution 986) has for six years funded a variety of humanitarian projects across Iraq, both the Iraqi government and the de facto autonomous Kurdistan Regional Government (KRG) in the northern three governorates can apply outside revenue for a variety of local projects. According to "The Washington Post" of 27 February 2001, in the first five years of the oil-for-food program, Iraqi President Saddam Husseyn spent $2 billion on new palace construction. At present, the Iraqi government raises an additional $1 billion annually outside the confines of the oil-for-food program by exporting oil illegally to Syria through the Banyas pipeline (see "RFE/RL Iraq Report," 19 April 2002). 

The largest source of KRG income is through the application of customs duties on cross-border trade, especially from the Habur/Ibrahim Khalil border crossing between northern Iraq and Turkey. Other major border crossings include Hajji Umran and Penjwin, both of which are on the Iranian border. Rather than palace construction, the KRG has applied its discretionary funds in a massive program to combat illiteracy. According to information supplied by the KRG's Ministry of Education in Irbil, illiteracy in Iraqi Kurdistan is now 36 percent. The Ministry of Education is currently engaged in literacy training for approximately 41,000 individuals. Much of the training is occurring outside the auspices of the UN oil-for-food program, and instead depends upon revenue raised locally by customs duties and also by the contribution of independent NGOs. The KRG's Council of Ministers has provided two levels of instruction for 8,000 adults in 300 new centers. Classes extended from 15 February 2001 through 15 March. (Michael Rubin)