Day By Day

Saturday, December 09, 2006

Excellent News Out Of Iraq

The major political obstacle to establishing an effective political union has been the question of an equitable distribution of oil revenues to the various sectarian, ethnic, and tribal groups that make up the Iraqi population. Now the NYT reports:

BAGHDAD, Dec. 8 — Iraqi officials are near agreement on a national oil law that would give the central government the power to distribute current and future oil revenues to the provinces or regions, based on their population, Iraqi and American officials say.

If enacted, the measure, drafted by a committee of politicians and ministers, could help resolve a highly divisive issue that has consistently blocked efforts to reconcile the country’s feuding ethnic and sectarian factions. Sunni Arabs, who lead the insurgency, have opposed the idea of regional autonomy for fear that they would be deprived of a fair share of the country’s oil wealth, which is concentrated in the Shiite south and Kurdish north.


Officials cautioned that this was only a draft agreement, and that it could still be undermined by the ethnic and sectarian squabbling that has jeopardized other political talks. The Iraqi Constitution, for example, was stalled for weeks over small wording conflicts, and its measures are often meaningless in the chaos and violence in Iraq today.

But a deal on the oil law could be reached within days, according to officials involved in the drafting. It would then go to the cabinet and Parliament for approval.

Read it here.

This is the kind of optimistic reporting that could not be found on the pages of the NYT prior to the election, but now that the Democrat victory is well in hand, they are beginning to return to a more objective view of the situation in Iraq.

On a more serious note, this could be the breakthrough everyone is looking for. Agreement on the distribution of oil revenues is the big hurdle that must be cleared before further negotiations can take place. An acceptable agreement will also remove a major reason for continuing resistance and will give all parties a stake in supporting the reconstruction and efficient operation of Iraq's oil industry.

Of course, this is still in the early stages. Final distribution equations cannot be developed until there is an accurate census of the population. That will not happen until next year. Still, it is an important step toward resolving the differences that are currently dividing the Iraqi population.


Mohammed at Iraq the Model notes that Iraqi oil revenues are at an all time high and that there are plans to use some of the money to upgrade the civil service and to distribute the remainder to the populace.
According to a recent paper published last November by Dow Jones (don't have a link, read a summary on paper) after the world economic forum in the dead sea, Iraq's income from oil exports for this year was at 35 billion dollars with a 14.3% increase from last year's total.

And that if oil export levels retain the current level and under stable prices, the coming year will witness a record income that was never reached in the history of modern Iraq and revenues will jump up to 40 billion dollars; a huge figure given the humble plans of the government and a figure that will put the government in a position where it must come up with new and ambitious plans to match the new revenue figures.

In fact and from what can be read in papers and heard from official statements it seems most government departments failed to spend the funds allocated by the government for those departments to execute their projects.
That's not because of security challenges only since there are several regions in the country that are relatively stable and where work can be done but more because of bureaucracy and corruption that make it extremely difficult to implement plans and make sure the money is spent in the right direction.

I think this was what pushed the government to announce a number of new measures to cope with the condition, perhaps the easiest measure to come up with was to announce plans for massive raises for civil servants; according to al-Sabah the raise will be as high as 60% of current payments in some cases, especially to those with lower incomes.

Another announcement followed soon, yesterday al-Sabah brought the news that the parliament is discussing a suggestion to set aside 30% of oil sales income to distribute among the citizens of Iraq. The draft law sets 3 classes of payments according to age and subsequent needs and responsibilities; from one month to 6 years, from 6 to 18 years and the third one 19 years and older.
People who migrated from Iraq, those with salaries higher that 1 million dinars/month and convicted criminals will be excluded from the payment program, the report added.

The people here met the news with some delight, hope and some skepticism too although the announcement came through the government's paper.

If this plan comes to materialize I think it can reflect positively on the security situation to some extent. The economy is part of the problem and also part of the solution and the government should move forward with reforms that involve economy and infrastructure as well as, of course and above all, security.
Read the whole thing here.

There seem to be a lot of things in the works right now. I can only think that the threat of an American pullout has galvanized Iraqi leaders, especially the Sunnis, into taking serious steps to resolve important issues like revenue distribution and combatting corruption.

And perhaps even more important, Mohammed notes:
The private sector in Iraq had witnessed giant leaps immediately after the fall of Saddam; that could be seen in the form of the thousands of private businesses that were established in the course of the past three years and that had a direct positive effect on the standards of living after long years of deprivation.
It's worth mentioning that between 1946 and the beginning of 2003 a total of 8374 businesses were registered while between April 2003 and the end of 2005 more than 20,000 have been registered. During last month alone 286 new businesses were added.
Such statistics seem quite extraordinary under the current security situation which sadly continues to overshadow and limits further improvement of this aspect of life in Iraq.
Now that is impressive and important information. You might have thought that the NYT or the broadcast networks might have reported it.


Soldiers from the Black Watch have nabbed a biggie.

BLACK Watch soldiers captured a terrorist godfather yesterday in the biggest operation by UK troops in Iraq.

The rebel leader and four of his henchmen were seized by an eight-strong Scots snatch squad as part of an operation involving almost 1000 soldiers, mostly British.

The series of raids in Basra also unearthed weapons and improvised explosive devices (IEDs) being prepared for use against allied troops.

Read it here.

No comments: