Wednesday, April 27, 2011

Iraq’s Trade Ministry Let $57 Million In Vegetable Oil Rot For Years

In early April 2011 the latest case of government ineptitude was revealed in Iraq. The Trade Ministry, which runs the food ration system, was found to have wasted $57 million worth of cooking oil. The ministry took three years to finalize a price, during which time the oil expired. The food ration system has been plagued by such problems since its inception in 1990.

In 2008, Iraq’s Trade Ministry ordered several tons of vegetable cooking oil. At the time, the price for oil had dropped to $600 per metric ton. When the oil was delivered to the Um Qasr port in Basra, the Ministry argued over the price with the suppliers. That took until 2011 to resolve. The government ended up paying $1,800 per ton for a total of $57 million, instead of the asking price of $1,900, for a miniscule saving. In the meantime, the oil was left to rot at the dock, and the Ministry ended up paying $12 million in storage and late feels.

A parliamentary committee exposed the case. It blamed the Trade Ministry for the waste, and speculated that corruption might have been involved. Lawmakers called for former Trade Minister Abdul al-Falah al-Sudani and other Ministry officials to appear before the legislature, and answer questions over the purchase. In 2009, Sudani, several of his family members, and top employees were charged with stealing between $4-$6 billion from the Trade Ministry. Sudani was acquitted in 2010, maintaining Iraq’s track record of never successfully convicting a top administrator of corruption. The oil case was just the latest example of the mismanagement that occurred under Sudani.

The vegetable oil was bought for Iraq’s food ration system. It was created in August 1990 during the United Nations sanction period as part of the Oil for Food program. It provides a free basket of food products to almost 90% of the population. It has become increasingly expensive to maintain with the rise in world food prices. Just as important, the government has failed to provide all of the items supposed to be included in the packages, and many times people complain that the goods are inferior or expired.

Iraq’s food rations are the largest in the world. It consumes a huge part of the national budget each year. Unfortunately, the large size of the operation and the money involved has opened it up to abuse, theft, and waste. Former Minister Sudani and his cronies were accused of stealing billions while in office. The vegetable oil case may be one more example of how he ran the program, and cheated the public.


Ibrahim, Waleed, “Iraq may ditch $57 million of food ration cooking oil,” Reuters, 4/16/11

Al Rafidayn, Al Mowaten News, “Iraqi Rationing Card: ‘Light in Weight, Poor in Quality and Late in Distribution,” MEMRI Blog, 4/14/11


Iraqi Mojo said...


Joel Wing said...

Yes, same thing I thought. What a waste, yet it appeared to be business as usual for the Trade Ministry.