Thursday, December 07, 2006

The Iraq Report (Part Two)

Now that we know who the players are, we can follow the playbook.

Prime Minister al-Maliki has suggested the following essential steps towards national reconciliation:

  • "revising de-Baathification, which prevents many Sunni Arabs from participating in governance and society." In the U.S.'s quest to strip Saddam Hussein and his cronies of power, they also alienated the Sunni, of which the Baath Party was largely comprised. So in order to build a state which has some semblance of democratic representation, the U.S. will need to at least partly rebuild the regime they razed.

  • "sharing the country’s oil revenues" The Shia and the Kurds have no reason whatsoever to vote for this process, as they're already sitting on the biggest piles of oil. Tariq al-Hashimi, leading the Sunnis in parliament, has suggested redistributing oil revenue based on population - an odd scheme which would favor the majority Shia more than anyone.

  • "demobilizing militias" This will not happen. As we noted previously, militias run the infrastructure of Baghdad. Unless al-Sadr is booted out, the Mahdi Army will remain the elephant in the dining room that is Iraq.

  • "settling the future of Kirkuk" Kirkuk is a Kurdish city with large Arab and Turkish factions. The Kurds want Kirkuk to be part of the autonomous Kurdish region; the Arabs and Turks want no such thing. Kirkuk is, incidentally, rich in oil.

In addition to al-Maliki's milestones, the following very pressing issues can not be resolved:

  • Infrastructure. Again, basics like water and electricity are in the hands of al-Sadr, who has shown no haste in supplying them to the Sunni regions of Baghdad. Sunni insurgents respond with sabotage against pipelines or power lines (IEDs to take them down; snipers to pick off the first responders). The most skilled technicians were either excluded from the new Iraq government by de-Baathification or (wisely) fled the country.

  • Economics. The report tosses in a few hopeful notes about wheat output in Kurdistan and reduction of gasoline subsidies. But those are trivia compared to inflation (50%), unemployment (hovering at 40%) and foreign investment (less than 1% of GDP). The sorry economic condition is a symptom of the sectarian violence. No one will invest in a country plagued by civil war. Consequently there is no capital, and therefore no growth.

  • Oil. We considered making this a subset of Economics, but it deserves its own heading:
    Iraq produces around 2.2 million barrels per day, and exports about 1.5 million barrels per day. This is below both prewar production levels and the Iraqi government’s target of 2.5 million barrels per day, and far short of the vast potential of the Iraqi oil sector.


    Corruption is also debilitating. Experts estimate that 150,000 to 200,000 — and perhaps as many as 500,000 — barrels of oil per day are being stolen. Controlled prices for refined products result in shortages within Iraq, which drive consumers to the thriving black market.
    Let's be generous and call it 200,000 barrels being lost to corruption. So just strike the ".2" from the "2.2 million" barrels per day. That's ten percent of Iraq's oil production - their only export.


Post a Comment

<< Home