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Iraqi Kurds struggle against economic current: They are the world's forgotten problem. But 'we cannot live like beggars for ever', a leader in Arbil tells Hugh Pope

THE Iraqi Kurds know that somehow the world sees them as yesterday's problem, fading from television screens, falling off the end of foreign aid programmes and crushed by a ruinous double economic blockade.

The latest rise in tension between the Iraqi President, Saddam Hussein, and the United States may benefit the 3.5 million Iraqi Kurds indirectly, making it hard for Washington to abandon them again. But it does nothing to solve the bitter paradox of their existence.

'They don't want us to be stronger, but they don't want us to die,' said Hero Talabani, a deputy in the Iraqi Kurdish parliament and wife of the Iraqi Kurdish leader Jalal Talabani. 'They want us to stay the same until they find a solution for Saddam Hussein . . . but we cannot live like beggars for ever.'

Mrs Talabani says even individual Western donors are stopping payments to her pioneering long-distance adoption scheme for the orphans left by President Saddam's massacres of the Kurds. On a bigger scale, charities ranging from Britain's Save the Children to UN programmes face funding crises.

A bountiful harvest being gathered across the mountain valleys of Kurdistan may total 300,000 tons, just enough to feed the population for a year. But the government has no money to buy it up, and a UN programme to buy one-fifth of it is likely to bypass the local administration for fear of upsetting Baghdad. Smuggled sales to the south thus seem inevitable, forcing new expensive aid programmes from outside for the coming winter.

The Kurds also seem to be counting on non-existent Western help to overcome what may be Saddam Hussein's next step, the cancellation of the 5- and 10- dinar denominations of the pre- Gulf war currency used by the Iraqi Kurds. With his usual personal touch, President Saddam appeared on television to burn a 25-dinar note to celebrate its cancellation in May, an act which threw the Iraqi Kurdish economy into turmoil.

Doctors' bills, the price of sheep, even the new 'photocopy' dinars now issued by Baghdad, vary wildly according to the dollar rate. Village folk seem insulated from the storm, but some ordinary townspeople like pensioners or teachers, doctors and officials employed by the state are down to selling their last possessions.

Added to President Saddam's blockade of Kurdistan, the international blockade on Iraq makes unavailable even basic spare parts and equipment, let alone the exploitation and refining of desperately needed oil under the land.

An international aid worker quoted one local survey in Arbil, the capital of Iraqi Kurdistan, as finding that 4-5 per cent of children were severely malnourished and another 11 per cent moderately malnourished.

'We must have support,' said Abdulla Rasoul, the Prime Minister of the Iraqi Kurdish government. 'If they give us support militarily, they should do it economically as well. The economic situation is much worse than the military one.'

The allies have protected the Kurdish north since 1991, embarrassed by a Kurdish refugee exodus to Turkey and Iran after the collapse of a post-Gulf war revolt that President Bush had himself encouraged.

Allied warplanes still fly overhead and a small allied mission of Americans, Britons, French and Turks keeps watch from behind high sandbags, roadblocks and fences in the town of Zakho. But there has not even been any Iraqi shelling of frontline positions for a month.

'The overall Iraqi position has not changed,' said the commanding officer, US Army Colonel Gerald Thompson. 'But it's the sort of posture that can do a lot of things at short notice. So we are not complacent.'

Colonel Thompson pointed out that internal security was still remarkably good considering the growing poverty, although local sources say there has been a recent rash of killings of Assyrian Christian officials.

Perhaps the most surprising aspect of Kurdish northern Iraq is the progress since Abdulla Rasoul took over in April, despite a lack of money and a fundamental political question mark over the future of his unrecognised administration.

Most towns now have a regional prefect in place, salaries are paid on time, telephones can work long-distance, the parliament is busy, laws take effect, guerrillas are being assimilated into the police and a new army, electricity seems almost regular, and courts, schools and hospitals seem to offer basic services.