CONTENTS
***
.........
Key Findings ........
Priorities and Recommendations ..............
Political Attitudes and Expectations ........
Establish Security and Law and Order
Deliver Essential Public Services ..............
Get the Message Out ...
The Political Transition ...
A Vacuum in Authority ...........
The Governing Council
Drafting a New Constitution
Perceptions of Political Parties ........................
De-Ba'athification ..........
Supporting the Development of a Democratic Culture
The Iraqi Shi'a ..........
Status of Women .......
The Economy, Budgets, and Oil ................
No Oil Bonanza
A Shoestring Budget in the Red
Donors Conference
Debtor Nation ....
Developing a Social Safety Net .....
Generating Employment .......
Internationalize the Transition ............
Iraq in a Wider Context
..................
Conclusion: Staying the Course .......
.............
•
:
:
..................
ANNEXES
Coalition Provisional Authority (CPA) Organizational Chart ..
Proposed International Police Task Force Composition ............,
Members of the Iraqi Governing Council .....
CPA Order on the De-Ba'athification of Iraqi Society ..................
Interim Budget for Iraq, July-December 2003, Summary ...
Text of United Nations Security Council Resolution 1483 .......
Speech by Ambassador L. Paul Bremer III, National Press Club, July 23,
2003 ...............................................
Further Reading
Map of Iraq ..........
(III)





LETTER OF TRANSMITTAL
UNITED STATES SENATE,
COMMITTEE ON FOREIGN RELATIONS,
Washington, DC, July 30, 2003.
RICHARD G. LUGAR, Chairman
JOSEPH R. BIDEN, JR., Ranking Minority Member
DEAR SENATOR LUGAR AND SENATOR BIDEN:
At the request of Senator Biden and Senator Hagel we returned
to Iraq on June 25, two days after the visit of the Committee dele-
gation led by Chairman Lugar to Baghdad. For the following nine
days, until July 3, we held a series of meetings with a wide range
of Iraqi professionals, prominent business leaders, academics, stu-
dents, artists, journalists, religious leaders, politicians, and o
elements of the new Iraqi civil society. In addition, we met Coali-
tion Provisional Authority (CPA) officials, American military per-
sonnel, and United Nations officials.
Prior to leaving Baghdad, we presented some of our preliminary
findings to. Ambassador L. Paul Bremer III, the Administrator of
the Coalition Provisional Authority, and Mr. Sergio Vieira de
Mello, the Special Representative of United Nations Secretary Gen-
eral Kofi Annan.
The interviews and meetings were conducted in Baghdad, except
for one day spent in Najaf. For all but three of our meetings with
Iraqis, we were not escorted by CPA or coalition military personnel
and made our own arrangements for accommodations and travel.
The conclusions and recommendations in this report are our own,
and do not necessarily reflect the views of the Committee on For-
eign Relations or its Members.
Sincerely,
PUNEET TALWAR
ANDREW PARASILITI
Professional Staff Member Foreign Policy Advisor
Foreign Relations Committee Office of Senator Hagel
(v)





PRIORITIES AND RECOMMENDATIONS
The U.S. Government should emphasize the following as urgent,
inter-connected priorities:
• Security: Deploy sufficient forces to subdue Iraqi resistance
and continue the hunt for former leaders of the regime, espe-
cially Saddam Hussein.
• Law and Order: Must be established in Baghdad and
throughout Iraq. The U.S. should intensify its efforts to recruit
and retrain Iraqi police officers, and immediately seek inter-
national assistance for this process.
Re-establish Services: In Baghdad and throughout Iraq as
soon as possible. Especially electricity and telecommunications.
Get the Message Out: Through the establishment of world
class radio and TV broadcasting, support for independent
media, and possibly the opening of local public information
centers where Iraqis can more readily access CPA officials.
Generate Employment: For the estimated 60% of the working
age population that is unemployed.
Share the Burden: By seeking a broader role for the United
Nations, the North Atlantic Treaty Organization, and our Arab
allies to allow other countries to contribute troops and funds
for stabilizing and rebuilding Iraq.
POLITICAL ATTITUDES AND EXPECTATIONS
Most Iraqis we interviewed were thankful to the United States
for removing Saddam Hussein's regime from power; hopeful of a
new relationship with the United States; and supportive of U.S.
troops staying until Iraq is stabilized. Yet Iraqis remain a proud
people. Gratitude over the removal of Saddam mixes with a strong
strain of nationalism. Military occupation elicits complex reactions,
and Iraqis, citing their long history of civilization, believe that they
are capable of running their own affairs.
The United States is dealing with a huge expectations gap in
Iraq. Following our rapid military success, Iraqis expected that the
United States could dramatically improve almost overnight living
conditions that had declined precipitously for more than a decade.
Iraqis today are preoccupied with the economy, personal security,
and the absence of services. Most of them told us that current con-
ditions in Baghdad since the liberation have made life harder than
it was even under the regime of Saddam Hussein. They also ex-
pressed uncertainty and fear that the present situation in Baghdad
and throughout Iraq would not get better. A failure to improve con-
ditions in Iraq would contribute to greater resentmei
undermine the Iraqi Governing Council, and increase risks to coali-
tion forces.
An independent public opinion survey of 1,090 Baghdad residents
by the Irag Center for Research and Strategic Studies (ICRSS) con
ducted on June 19, 2003, reinforced many of our own observations.
According to the poll, while only 17% of those surveyed wanted coa-
lition forces to leave immediately, 74% described the current secu-
rity situation as bad; 74% described the economy as bad; and 94%
said that efforts to rebuild key sectors of the economy had so far
failed.



An Iraqi woman stands for election as representative of Ath-Thawra
district to the Baghdad City Council.
Drafting a New Constitution
The development of an Iraqi Constitution will contribute to the
cohesion and legitimacy of a new Iraqi government. It will estab-
lish the governing principles of Iraq, formalize key political com-
promises among major constituencies, and create institutional ar-
rangements that hopefully will govern Iraq for years to come. Crit-
ical issues will be settled by the Constitution—Will the country be
a federation? If so, with how many constituent parts? What powers
will be held by the central government? What, if any, checks and
balances will be put in place between the executive, legislative, and
judicial functions of government? Will religion play any formal role
in public life? Will the fundamental rights of all Iraqis be pro-
tected?
The Constitutional process should be seen as legitimate by
Iraqis. Some may seek to question, hinder or obstruct this process.
The mode of selection for the Constitutional Council has already
become a point of contention, with Grand Ayatollah Ali Sistani-
a powerful voice in the Shi'a community-issuing a Fatwa calling
for Council members to be elected. During the Constitutional proc-
ess the Iraqi Governing Council and the CPA must communicate
clearly to the Iraqi people the link between the development of a
Constitution and the process of building political institutions and
democracy for all Iraqis. 10
10 See L. Paul Bremer III, “The Road Ahead in Iraq and How to Navigate it,” The New York
Times, July 13, 2003.


11
which, if any, group will emerge as the dominant voice and what
specific relationship will be advocated between religion and govern-
ment.
Despite widespread happiness among Iraqi Shi'a over the demise
of Saddam Hussein's regime, there is little trust of American inten-
tions in Iraq. Many Shi'a activists retain bitter memories of Presi-
dent George H.W. Bush's encouragement and then abandonment of
the 1991 intifada in Iraq which resulted in tens of thousands of
deaths.
Winning over Iraq's Shi'a, and all Iraqis, will depend upon the
establishment of an Iraqi government that has legitimacy among
all its citizens and is capable of providing security and services.
STATUS OF WOMEN
Most Iraqi women we encountered indicated that they have seen
their personal freedom decline in the aftermath of the war for two
reasons: (1) The collapse of law and order; (2) The growing strength
and influence of religious groups.
Many women, including professionals, indicated that they have
been forced to stay indoors because of the general state of lawless-
ness and rampant reports of abductions and rapes. Rape in a tradi-
tional society such as Iraq is a taboo subject. It often results in ad-
verse consequences for the victim, frequently involving her murder
by family members to “preserve” the family's honor.
Many women also related accounts of harassment and intimida-
tion over their dress and behavior by newly assertive religious
groups.
The CPA should take the following steps:
(1) Improve law and order—women will be the greatest bene-
ficiaries. Police, including female officers, should be trained to
meet the needs of rape victims. Legal reform will be needed to
stiffen penalties for harming victims of rape, including "honor
killings.”
(2) Support non-profit groups assisting victims of rape and
other violence against women.
(3) Publicize efforts to address the issue of rape to help re-
move the stigma suffered by victims.
(4) Continue to ensure the participation of women in the po-
litical process.
Vigilance on issues relevant to women will need to be heightened
to ensure that the liberation of Iraq does not paradoxically lead to
a decline in the standing of women in society.
THE ECONOMY, BUDGETS, AND OIL
The Iraqi economy is but a shadow of its former self. It has been
ruined from 35 years of mismanagement and corruption under the
Ba'ath regime; three wars since 1980; 12 years of international
sanctions; and the looting, vandalism, and economic collapse that
followed Iraq's liberation on April 9, 2003. In 2000, the UN esti-
mated that Iraq's gross domestic product per capita had fallen to
88-594
D-2


12
between $500 and $700,12 which would rank it near countries such
as Yemen, Bhutan, and Angola. 13 Since the establishment of the
or-food program in December 1996, 60% of Iraq's popu-
lation has relied upon oil-for-food program to meet its most essen-
tial needs. The private sector was operating at a fraction of capac-
ity.
No Oil Bonanza
Although Iraqi's oil reserves are estimated to be the second larg-
est in the world, Iraq's economy and infrastructure is in dire
straits. There is no oil windfall on the horizon.
Oil revenues for July-December 2003, based on estimated ex-
ports of 1.5 million barrels per day by December, are expected to
be only $3.455 billion. Iraq's oil exports and revenues are projected
to be only 2 million barrels per day and $14 billion, respectively,
for 2004.14 To achieve those results, Iraq's oil infrastructure will
require $2.5 billion in investment by December 2004.15 The July-
December 2003 Iraqi budget includes $825 million for rebuilding
Iraq's oil infrastructure through the Restoration of Iraqi Oil Pro-
gram. (See Annexes, pages 22–25.)
An expansion of Iraq's oil exports beyond these levels cannot be
considered in a vacuum. Such a decision would probably require an
increase in international demand for oil and further investments in
Iraq's oil infrastructure. Under Secretary of State Alan Larson said
in testimony before the Senate Foreign Relations Committee that,
"Any significant expansion of baseline oil product capacity would
need to be accommodated by increased demand in the international
marketplace and in my view would most likely be privately fi-
nanced.” 16 The Independent Task Force of the Council on Foreign
Relations on “Iraq: The Day After" estimated that restoring produc-
tion to its peak of 3.5 million b/d would require an investment of
$5–7 billion over 2 years. 17.
A Shoestring Budget in the Red
The interim budget for Iraq for July-December 2003 prepared by
the CPA and Iraq's Ministries of Finance and Planning projects a
total expenditure of close to $6.1 billion and a deficit of $2.2 billion.
(See Annexes, pages 22–25.) The deficit will be funded from “com-
mitted financial assets, without the need for borrowing.” The budg-
et, while appropriately conservative in some respects, does not
make the dramatic investments that may be urgently needed to
bring about immediate improvement in the lives of ordinary Iraqis.
Ambassador Bremer has so far predicted a deficit of almost $4 bil-
lion for FY 2004.18
12 The Reconstruction of Iraq. A Preliminary Background Briefing Paper, prepared by the UN
Development Group, June 23, 2003.
13 The World Bank, World Development Indicators for 2000 and 2001.
14 Iraq exported 1.7 mil b/d of oil in 2002. Testimony of Hon. Alan P. Larson, Under Secretary
of State for Economic, Business and Agricultural Affairs, before the Senate Foreign Relations
Committee, June 4, 2003.
15 Phil Carroll, CPA Senior Adviser to Iraq's Ministry of Oil, Baghdad, June 23, 2003.
16 Testimony of Hon. Alan P. Larson, Under Secretary of State for Economic, Business and
Agricultural Affairs, before the Senate Foreign Relations Committee, June 4, 2003.
17 Iraq: The Day After, Report of an Independent Task Force Sponsored by the Council on For-
eign Relations, 2003, p. 35.
18 Ambassador Paul L. Bremer III, National Press Club, Washington, DC, 23 July 2003. (See
Annexes, pages 34–43.)


13
Donors Conference
At present, a donors conference under the auspices of the United
Nations is planned for Fall 2003. Critical to the success of this con-
ference will be an assessment to be completed by the World Bank
and International Monetary Fund. An initial study prepared by the
United Nations for a preliminary donors meeting in June supports
our conclusion that the need for assistance in a range of sectors
will be extraordinary.19 Given the need to immediately improve
conditions on the ground, the United States will not have the lux-
ury of waiting to increase spending until after the donors con-
ference and the inevitable delays in actual delivery of pledges.
Debtor Nation
Iraq's economy could be handicapped by substantial international
debt and compensation claims. Iraq's international debt is esti-
mated at between $80–120 billion, and unpaid claims against Iraq
through the UN Compensation Commission total $116.4 billion.
Past and present Iraqi creditors face the prospect of dealing with
a heavily indebted country. Iraq's economic prospects will dim even
further if Iraq is forced to meet its present obligations without sub-
stantial relief. To have any chance of success in reviving the Iraqi
economy, America must work with Iraqi creditors—through the
UN, the Paris Club, the World Bank, the IMF, and other relevant
international financial institutions—to relieve Iraq of most of this
potentially huge financial burden.
Developing a Social Safety Net
Iraq will require a major overhaul and restructuring of its social
services. For example, under the Ba’ath regime the Ministry of
Labor and Social Affairs was the primary provider of social services
and benefits to pensioners, women, children and refugees. The Min-
istry, with 3800 employees throughout Iraq (1300 in Baghdad) pre-
viously served approximately 100,000 Iraqi citizens in a country
where the World Food Program estimates that 4.6 million (or one
in every five people) in the center and south of the country live in
chronic poverty, defined as the frequent inability to meet basic
needs.20.
In other words, an effective social safety net will have to be built
almost from scratch to reach all Iraqis in need as well as to provide
assistance to those who will be displaced from their jobs in a dif-
ficult transition. This will require an enormous increase in funding
and place huge demands on the Ministry. Yet the Ministry's total
projected expenditures for the July-December 2003 budget are only
$6.4 million. In addition, its buildings and grounds in Baghdad re-
main in a generally unusable condition for the foreseeable months
because of extensive damage from the war and subsequent van-
dalism.
19 The Reconstruction of Iraq. A Preliminary Background Briefing Paper, prepared by the UN
Development Group, June 23, 2003.
20 The Reconstruction of Iraq. A Preliminary Background Briefing Paper, The UN Development
Group, June 23, 2003.


The question of restructuring the public sector and dismantling
state-owned enterprises will have to be addressed in due course.
Given the deteriorating conditions on the ground, this issue should
not be solely analyzed in economic terms. The social, political and,
ultimately, security consequences of exacerbating the unemploy-
ment problem should be considered as well.
Finally, we recommend that Iraq be considered for preferential,
if not duty-free, access to Western markets, including the U.S. and
EU, to generate economic activity and employment.
INTERNATIONALIZE THE TRANSITION
The United States needs its allies, as well as the UN and NATO,
to spread the military and financial burden of stabilizing and re-
building Iraq and to help legitimize the transition to representative
government. ::
The Bush Administration should seek a broader role for the UN,
including an additional Security Council resolution if necessary, to
facilitate the engagement of its agencies and its member states.
The UN has special expertise that can help facilitate Iraq's re-
construction. It can help conduct a census, which will provide crit-
ical information that is currently lacking. It is willing to offer sup-
port to an Iraqi body that will draft a new Constitution. It can help
prepare the groundwork for elections by registering voters and pre-
senting alternatives to Iraqis in choosing an electoral system. Fur-
thermore, it can help to grant legitimacy in the area of transitional
justice and the monitoring of human rights. In the critical area of
rebuilding Iraq's economy, the UN can facilitate the work of the
IMF and World Bank and offer an avenue for donors to channel as-
sistance.
Iraqis have mixed views of the UN largely because of the dev-
astating effect of sanctions imposed by the UN Security Council for
over 12 years. Nevertheless, the UN is seen by some powerful indi-
viduals and groups in Irág as a neutral organization that can help
to legitimize the political transition. For instance, Grand Ayatollah
Ali Sistani, among the most influential voices within the Shi'a com-
munity, has kept his distance from CPA officials, but he has met
with Secretary General Annan's Special Representative Sergio
Vieira de Mello.
The U.S. should also intensify discussions with NATO allies
about what role the organization can play in helping to stabilize
the security situation in Iraq and relieve the burden on U.S. and
coalition forces.
IRAQ IN A WIDER CONTEXT
America's policies toward Iraq should be placed in a wider re-
gional context. They cannot be considered in isolation of the Israeli-
Palestinian conflict; Turkey's concerns and interests about north-
ern Iraq; disputes regarding the Iraq-Kuwait border; and Iran's re-
lations with both Iraq and the United States. While Southern Iraq
will likely not become a satrapy of Iran, Washington and Tehran
would be well-served by arriving at an understanding over their re-
spective interests in Iraq to reduce the risk of unintended friction.
The United States, working with the United Nations and its re-
gional allies, must seize the opportunity for a comprehensive ap-


18
COALITION PROVISIONAL AUTHORITY
Counselors
Administrator
Chairman, Council for International Coordination
Belka (Poland)
Amb. Bremer
Military LNOS
Deputy cic
COS
Kennedy (State)
Military Aides / Personal Staff
Operational Support Group -
Executive Secretariat
Financial Oversight
Intel
General
Counsel
UN Agencies
Oil Policy
Operations
Civil Affairs Policy
Crocker (State)
AID
Lucke (AJD)
Economic
Policy
McPherson
(fmr Treasury)
Strategic
Communications
Caroll
(industy)
Security Affairs
Slocombe (fmr OSD)
00000000000
www
Bearpark (UK)
Strock Dod)
Education
DART
wwwwwwwwwwwwwwwwww
Foreign
Affairs
Supported
Commander
Agriculture
Sa
Reconstruction
Industrial
Conversion
Information
Governance
Central Bank
Regional
Advisors
Customs
Enforcement
Immigration
00000000000000
Electricity
Interior
Kerik (NYPD)
Justice
Labor and Social
Finance
Senior Advisors
(Governor level)
Local Governance
Police

Institutions
Public Works
Industry &
Religious
Affairs
Youth
Irrigation
Planning
Trade
3A
CPA Staff (alo 7M1/03)
DoD.
332
Military 268
DoS-
other USG -
contractors - 284
total U.S. 954
coalition - 193
total CPA. 1147
Transport &
Review Board


19
IPTF Composition (Proposed)
6000
5078
5000
4000
3000
2000
775
1000
179
.181
U.S.
• Trainer
International
Trainer
U.S.
CivPol
International
CivPol
Number Personnel
One Year Budget: 725,023,847
IPTF - International Police Task Force
Source: **Police Development Plan, Iraq Police Assessment and Recommendations," Iraq Police Assessment Team, Coalition
Provisional Authority (Power Point Presentation)

WWWWWWWWWWWWY


20
Members of the Iraqi Governing Council*
Ahmed Shya'a al-Barak, Coordinator for Human Rights Association
of Babel
Naseer al-Chaderchi, National Democratic Party
Abdel-Aziz al-Hakim, a leader of the Supreme Council for the Is-
lamic Revolution in Iraq
Aquila al-Hashimi, diplomat and foreign affairs advisor
Raja Habib al-Khuzaai, maternity hospital director in Diwaniyah
Iyad Allawi, leader of the Iraqi National Accord
Abdel-Karim Mahoud al-Mohammedawi, member of Iraqi political
group Hezbollah in Amara
Mouwafak al-Rabii, Medical doctor and human rights activist
Mohammed Bahr al-Uloum, Ayatollah from Najaf
Ghazi Mashal Ajil al-Yawer, northern tribal chief
Dara Noor Alzin, formerly imprisoned judge
Salaheddine Bahaaeddin, Secretary General of the Kurdistan Is-
lamic Union
Massoud Barzani, leader of the Kurdistan Democratic Party
Sondul Chapouk, Leader of Iraqi Women's Association from Kirkuk
Ahmad Chalabi, founder of the Iraqi National Congress
Mohsen Abdel Hamid, Secretary General of the Iraqi Islamic Party
Ibrahim al-Jaafari, Spokesperson for Dawa Islamic Party
Younadem Kana, Secretary General of the Democratic Assyrian
Movement
Wael Abdul Latif, Governor of Basra
Samir Shakir Mahmoud, Writer from Haditha
Hamid Majid Moussa, Secretary of the Iraqi Communist Party
Abdel-Zahraa Othman, Leader of the Islamic Dawa Movement in
Basra
Mahmoud Othman, Independent
Adnan Pachachi, former foreign minister, 1965–1967
Jalal Talabani, head of the Patriotic Union of Kurdistan
*Source: Associated Press, 7/13/03.
DI
urce


21
ORDER OF THE ADMINISTRATOR OF THE COALITION PROVISIONAL
AUTHORITY
DE-BAATHIFICATION OF IRAQI SOCIETY—MAY 16, 2003
On April 16, 2003 the Coalition Provisional Authority disestab-
lished the Baath Party of Iraq. This order implements that declara-
tion by eliminating the party's structures and removing its leader-
ship from positions of authority and responsibility in Iraqi society.
By this means, the Coalition Provisional Authority will ensure that
representative government in Iraq is not threatened by Baathist
elements returning to power and that those in positions of author-
ity in the future are acceptable to the people of Iraq.
Full members of the Baath Party holding the ranks of Udw
Qutriyya (Regional Command Member), 'Udw Far (Branch Mem-
ber), «Udw Shu'bah (Section Member), and Udw Firqah (Group
Member) (together, “Senior Party Members”) are hereby removed
from their positions and banned from future employment in the
public sector. These Senior Party Members shall be evaluated for
criminal conduct or threat to the security of the Coalition. Those
suspected of criminal conduct shall be investigated and, if deemed
a threat to security or a flight risk, detained or placed under house
... arresti ,
Individuals holding positions in the top three layers of manage-
ment in every national government ministry, affiliated corporations
and other government institutions (e.g., universities and hospitals)
shall be interviewed for possible affiliation with the Baath Party,
and subject to investigation for criminal conduct and risk to secu-
rity. Any such persons determined to be full members of the Baath
Party shall be removed from their employment. This includes those
holding the more junior ranks of 'Udw (Member) and 'Udw 'Amil
(Active Member), as well as those determined to be Senior Party
Members.
Displays in government buildings or public spaces of the image
or likeness of Saddam Hussein or other readily identifiable mem-
bers of the former regime or of symbols of the Baath Party or the
former regime are hereby prohibited.
Rewards shall be made available for information leading to the
capture of senior members of the Baath party and individuals
complicit in the crimes of the former regime.
The Administrator of the Coalition Provisional Authority or his
designees may grant exceptions to the above guidance on a case-
by-case basis.
By order of:
.. L. PAUL BREMER, III
Administrator, Coalition Provisional Authority
.


25
Table 5: Significant Proposed Expenditures—Continued
($USm)
Construction Fund
Military De-Mobilization
Regional Commanders
U.S. Government Department and Agency Support
Program Review Board
“Oil for food” program
USAID programs
Bechtel
Total Additional Expenditures
Total Expenditures
100.0
60.0
6.0
35.0
35.0
-200.0
400.0
3,488.0
6,099.6
Table 6: Revenues
($USm)
Oil revenues
Transfers from State Enterprises
Taxes, Fees and Charges
3,455.0
373.6
59.1
Total Revenues
3,887.7


28
entific, and religious importance illegally removed from the Iraq
National Museum, the National Library, and other locations in
Iraq since the adoption of resolution 661 (1990) of 6 August 1990,
including by establishing a prohibition on trade in or transfer of
such items and items with respect to which reasonable suspicion
exists that they have been illegally removed, and calls upon the
United Nations Educational, Scientific, and Cultural Organization,
Interpol, an
nal organizations, as appropriate, to
assist in the implementation of this paragraph;
8. Requests the Secretary-General to appoint a Special Rep-
resentative for Iraq whose independent responsibilities shall in-
volve reporting regularly to the Council on his activities under this
resolution, coordinating activities of the United Nations in post-
lict processes in Iraq, coordinating among United Nations and
international agencies engaged in humanitarian assistance and re-
construction activities in Iraq, and, in coordination with the Au-
thority, assisting the people of Iraq through:
(a) coordinating humanitarian and reconstruction assistance
by United Nations agencies and between United Nations agen-
cies and non-governmental organizations;
(b) promoting the safe, orderly, and voluntary return of refu-
gees and displaced persons;
(c) working intensively with the Authority, the people of
Iraq, and others concerned to advance efforts to restore and es-
tablish national and local institutions for representative gov-
ernance, including by working together to facilitate a process
leading to an internationally recognized, representative govern-
ment of Iraq;
(d) facilitating the reconstruction of key infrastructure, in co-
operation with other international organizations;
(e) promoting economic reconstruction and the conditions for
sustainable development, including through coordination with
national and regional organizations, as appropriate, civil soci-
ety, donors, and the international financial institutions;
(f) encouraging international efforts to contribute to basic
civilianadministration functions;
(g) promoting the protection of human rights;
(h) encouraging international efforts to rebuild the capacity
of the Iraqi civilian police force; and
(i) encouraging international efforts to promote legal and ju-
dicial reform;
9. Supports the formation, by the people of Iraq with the help of
the Authority and working with the Special Representative, of an
Iraqi interim administration as a transitional administration run
by Iraqis, until an internationally recognized, representative gov-
ernment is established by the people of Iraq and assumes the re-
sponsibilities of the Authority;
10. Decides that, with the exception of prohibitions related to the
sale or supply to Iraq of arms and related materiel other than
those arms and related materiel required by the Authority to serve


31
gramme, and to determine, in coordination with the Authority
and the Iraqi interim administration, the future status of con-
tracts undertaken by the United Nations and related United
Nations agencies under the accounts established pursuant to
paragraphs 8 (b) and 8 (d) of resolution 986 (1995);
(f) to provide the Security Council, 30 days prior to the ter-
mination of the Programme, with a comprehensive strategy de-
veloped in close coordination with the Authority and the Iraqi
interim administration that would lead to the delivery of all
relevant documentation and the transfer of all operational re-
sponsibility of the Programme to the Authority;
17. Requests further that the Secretary-General transfer as soon
as possible to the Development Fund for Iraq 1 billion United
States dollars from unencumbered funds in the accounts estab-
lished pursuant to paragraphs 8 (a) and 8 (b) of resolution 986
(1995), restore Government of Iraq funds that were provided by
Member States to the Secretary-General as requested in paragraph
1 of resolution 778 (1992), and decides that, after deducting all rel-
evant United Nations expenses associated with the shipment of au-
thorized contracts and costs to the Programme outlined in para-
graph 16 (c) above, including residual obligations, all surplus funds
in the escrow accounts established pursuant to paragraphs 8 (a), 8
(b), 8 (d), and 8 (f) of resolution 986 (1995) shall be transferred at
the earliest possible time to the Development Fund for Iraq;
18. Decides to terminate effective on the adoption of this resolu-
tion the functions related to the observation and monitoring activi-
ties undertaken by the Secretary-General under the Programme,
including the monitoring of the export of petroleum and petroleum
products from Iraq;
19. Decides to terminate the Committee established pursuant to
paragraph 6 of resolution 661 (1990) at the conclusion of the six
month period called for in paragraph 16 above and further decides
that the Committee shall identify individuals and entities referred
to in paragraph 23 below;
20. Decides that all export sales of petroleum, petroleum prod-
ucts, and natural gas from Iraq following the date of the adoption
of this resolution shall be made consistent with prevailing inter-
national market best practices, to be audited by independent public
accountants reporting to the International Advisory and Monitoring
Board referred to in paragraph 12 above in order to ensure trans-
parency, and decides further that, except as provided in paragraph
21 below, all proceeds from such sales shall be deposited into the
Development Fund for Iraq until such time as an internationally
recognized, representative government of Iraq is properly con-
stituted;
21. Decides further that 5 per cent of the proceeds referred to in
paragraph 20 above shall be deposited into the Compensation Fund
established in accordance with resolution 687 (1991) and subse-
quent relevant resolutions and that, unless an internationally rec-
ognized, representative government of Iraq and the Governing
Council of the United Nations Compensation Commission, in the
exercise of its authority over methods of ensuring that payments