Iraq's acceptance of a United Nations plan allowing it to swap oil for food and medical supplies marks Baghdad's first step away from nearly total political and economic isolation since it invaded Kuwait in August 1990.
The deal should ease privations faced by ordinary Iraqis. In doing so, it may boost Saddam Hussein's standing with his subjects and Gulf neighbors, at least for now.
The real question is whether the UN plan will lead to further relaxation of sanctions and a long-term reintegration of a Saddam-led Iraq into the world's good graces. That's what Iraqi officials want - and the US wants to avoid. Containment of the Baghdad regime remains one of the cornerstones of US foreign policy.
"This gives Saddam a little bit of breathing room," says William Quandt, a University of Virginia Middle East expert. "But one shouldn't conclude that two months down the road he'll be in better shape."
Conclusion of the oil-for-food exchange followed years of difficult negotiations. The UN Security Council first offered to allow Iraq limited oil sales to raise money for humanitarian supplies in late 1991; Saddam eventually rejected the terms of that deal on grounds that it infringed on Iraq's sovereignty.
The UN tried again last spring, offering slightly more generous terms. After an initial refusal to talk, Saddam authorized the beginning of negotiations in New York in February. Iraqis complained for months that the deal was too harsh, but the US and Great Britain headed off efforts by other Security Council members to soften its provisions.
Not exactly business as usual
Under a memorandum of understanding signed May 20, Iraq will be permitted to sell about 700,000 barrels of oil a day, well short of its prewar production level of some 3 million barrels a day. Money generated from these sales can be used for the purchase of food, medicine, and other humanitarian needs on world markets, under close UN supervision.
About one-third of the funds will be earmarked for a Gulf war reparations fund. Every three months, an estimated $150 million will be deducted to pay for UN relief programs for the Kurds in northern Iraq, who are now beyond control of the Iraqi government.
A few sticking points remain. Food distribution plans have yet to be finalized. The Security Council has the option to review the deal in six months. Still, Iraqi officials pronounced themselves satisfied with the deal.
So why has Iraq finally agreed to a deal it could have had months, if not years, ago? Two reasons, according to experts: the dire straits of the Iraqi people, and Iraq's standing in the world community.
By all accounts, UN economic sanctions have virtually destroyed daily commerce in Iraq and are producing widespread hardship among Iraqi citizens. Diplomats and visitors describe evidence of poverty everywhere; according to Italy's UN ambassador F. Paolo Fulci, infant mortality in Iraq is now 40 percent.
The limited oil sales allowed by the UN agreement won't return Iraq to its prewar state. But they should provide enough cash to feed a population whose daily ration is now hovering at around one-half of basic nutritional need.
"We'll see a substantial change in the Iraqi standard of living," says Patrick Clawson, a Middle East specialist at the National Defense University's Institute of Strategic Studies in Washington.
Furthermore, Saddam appears to have realized that he wasn't going to get a better deal by holding out much longer. Any short-term chance of a general easing of sanctions was negated by continued evidence of Iraqi attempts to cover up evidence of chemical, nuclear, and biological weapons programs. Evidence provided by the short-term defections of some high Iraqi officials last August only made him look worse.
"All his officials were in favor of complying with the US terms, and [Saddam] was the only one holding out, convinced that he would squeeze a little more juice out of this stone," says Haifa University historian Amatzi Baram, one of Israel's foremost experts on Iraq.
Paradoxically, Saddam should benefit from the deal at home, even though in essence he has given in to US and UN conditions. News of the oil agreement sparked jubilation throughout Iraq, with taxis blaring their horns and armed citizens firing celebratory rifle shots in the air. Baghdad radio broadcast nation hymns in praise of the Iraqi leader.
He may also gain in stature in the eyes of some of his neighbors. Gulf nations have always been of two minds about Iraq, seeing Baghdad as a bulwark against revolutionary Islam in Iran. Now their perceptions of Saddam's longevity may be altered.
"Even though this deal is limited, that's not the way it will be read in the region," says Shibley Telhami, director of the Near Eastern Studies program at Cornell University in Ithaca, N.Y. "It will be seen as an integration of Iraq into the world economy."
Certainly Iraq wants to portray it as such. Some Western nations, such as France and Russia, are also eager to begin rebuilding economic ties with Baghdad.
US sees Saddam as sticking point
But the US remains adamantly against allowing unlimited oil sales or airline flights, infrastructure deals, and other general commerce with Iraq, as long as its Gulf war opponent remains in charge.
Experts point to scattered evidence that the US is mounting a concerted, covert effort with its allies to topple Saddam. If nothing else, another year without further relaxation of economic sanctions might start coup plots within Iraq's armed forces, according to Professor Baram.