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Geopolitics
Splitting of Iraq’s oil wealth the key issue
What the Americans don’t bring to the equation are the profits its biggest oil companies also expect
By Dan Adleman
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Iraq has proven to be a very costly war for the United States. This volatile, heterogeneous Middle Eastern nation that was once held together only by the strong-arm of a vicious despot of America’s own creation has descended into unfathomable chaos, and the American government has been forced to send in thousands of bodies and hundreds of billions of dollars in an uphill battle to hold it all together. In the wake of everything that’s ensued since this administration confidently promised the American public that the war wouldn’t be costly and American troops would be greeted with roses rather than rockets, even former Republicans have begun to characterize Bush and the neo-cons as “bubbled in” and “untethered from reality”.
If the American government and its supporters are best characterized as narcissistically indifferent to the broader repercussions of their actions, Iraq can only be described as an utterly schizophrenic nation.
At the most obvious level, as with so many African and Middle Eastern nations that were manufactured pell-mell by the British and French empires, there is a profound ethnic schism in Iraq’s soul. The nation of Iraq is a relatively new one that was invented by the British, who haphazardly patched it together out of three former Ottoman regions at the end of World War I.
As we all know, when Saddam Hussein was removed from power, the minority Sunnis who had enjoyed power during his reign were thrust into a bloody civil war with the majority Shiites. In fact, inasmuch as such things can be gauged, many suggest that the civil wars that have erupted across the country have surpassed even the American-British occupation in their disruptive effect on the country’s cohesive viability.
More and more strategists are now suggesting dividing the country into three semi-autonomous regions—the Shiite South, Kurdish North, and Sunni centre—with a strong central government. Of course, this would be very difficult to institute for a number of reasons. First off, some relatively homogonous regions like Sunni Anbar house the most formidable insurgencies. Such environments are completely hostile to American-backed Iraqi institutions, and even the military admits it has few or no footholds in these regions. Things are even more complex in Shiite regions like Basra, where insurgents don’t want to negotiate with the US because they are allied with and receive weapons from Iran, whose leaders US President George Bush refuses to negotiate with.
But even if the country were to be partitioned under the auspices of a central umbrella government, a number of very important cities, like Baghdad and Mosul, are still very mixed and bristling with violent sectarian discord, and some towns in the south are awash with Shiite blood as separate Shia gangs duke it out with each other in vicious turf wars.
Then there’s the sticky issue of oil wealth. Iraq sits atop the world’s second largest proven oil reserves. And unlike the oil in Venezuela and Alberta’s tar sands, Iraq’s oil is extraordinarily high-grade and easy to produce. If the Iraqi government could somehow put together an equitable profit-sharing agreement between the regions, oil wealth could be converted into a wellspring of the kinds of infrastructure and vital social services Iraq requires to become a functioning, cohesive nation. If the bubbled-in Bush administration really wanted to see freedom on the march in Iraq, it should have followed Venezuela’s Hugo Chavez’s lead and committed petrodollars to free education and health care, social housing projects, and maybe even something like “Klein bucks” whereby citizens would directly receive a portion of their nation’s oil profits.
An early draft of the constitution negotiated by Iraqis demanded just such a “Scandinavian-style welfare system in the Arabian desert.” "Social justice," the drafters proclaimed, "is the basis of building [a] society." But it was never meant to be. US Ambassador to Iraq Almay Khalilzad and his hit squad of American and British diplomats quickly crowded the Iraqis out of the picture so that Big Oil could swoop in with profit-sharing agreements that would force the government to relinquish control of most of its oil fields.
According to Alternet’s Joshua Holland, “With a constitution cooked up in DC, the stage was set for foreign multinationals to assume effective control of as much as 87% of Iraq's oil, according to projections by the Oil Ministry. If [profit sharing agreements] become the law of the land—and there are other contractual arrangements that would allow private companies to invest in the sector without giving them the same degree of control or such usurious profits—the war-torn country stands to lose up to $194 billion in vitally important revenue on just the first 12 fields developed, according to a conservative estimate by Platform. [The estimate assumes oil at $40 per barrel; as at this writing, it stands at more than $59]. That's more than six times the country's annual budget.”
These parasitic profit sharing agreements are the big elephant in the room that nobody in the mainstream media wants to talk about. It’s a shame that CNN and FOXNews aren’t helping to acquaint the bubbled-in suburban American public with the on-the-ground reality of what’s going on in Iraq. But one thing’s for sure, the Iraqis know. And they’re not happy about it. The regional governments are already angling for any control of their oil they can get, and the powerful oil workers’ union (which Paul Bremer tried in vain to ban) is strident in its opposition to the unnecessary denationalization of Iraqi oil.
The influential union’s mission statement declares: “The privatization of the oil and industrial sectors is the objective of all in the Iraqi state/government. We will stand firm against this imperialist plan that would hand over Iraq’s wealth to international capitalism such that the deprived Iraqi people would not benefit from it. . . . We are taking this path for the sake of Iraq’s glory even if it costs us our lives. Iraqis are capable of managing their companies and their investments by themselves.”
If the Bush administration is genuinely serious about spreading democracy in the Middle East and encouraging Iraq to cohere as a sustainable nation, it has to stop treating the situation in Iraq like a black gold rush. While Iraqis have suffered through invasion, occupation, and civil war, big American and British oil and infrastructure corporations have made off like bandits in an atmosphere of insubstantive oversight.
In spite of Bush’s cynical change of rhetoric from “stay the course” to “adapt to win,” all of the evidence suggests that this administration is too selfish, beholden to Big Oil, and cloistered from reality to adjust for error in any kind of meaningful fashion. Due to the unpopularity of the draft, America won’t have enough troops on the ground to enforce the peace between all the factions that are jockeying for position. And, in spite of claims to the contrary, the American troops aren’t really going to be able to stand down because the Iraqi army will always be infiltrated by destabilizing sectarian influences.
At the end of the day, if the Iraqi people aren’t being offered their piece of the pie, if they don’t really have anything to look forward to, there’s no reason to believe that even all the king’s horses and all the king’s men will be able to put the Iraqi amalgam back together again. It will simply fall apart; the centre cannot hold.
dadleman@gmail.com
danadleman@gmail.com
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