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IRAQ


 



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REPUBLICAN REFERENCE

Area (sq.km)
437,072

Population

24,001,816 (July 2002 est.)

Capital
Baghdad

Currency
Iraqi dinar (IQD)

President



Update No: 039 - (27/07/06)

Who will stop the militias?
During June and July the issue of the factional militias continued to remain the most contentious one, with violence in Baghdad increasingly spiralling out of control despite repeated pledges to disband the militias. By 20 July the government was forced to declare yet another curfew in the capital and request the deployment of US troops. Not only the de facto civil war among Sunnis and Shias still goes on, but the issue of the fate of the militias is increasingly causing strife within the Shiite alliances. SCIRI, which enjoys the support of the Prime Minister and has strong positions in the Cabinet, appears well positioned to have its militias incorporated into the security services. The Sadrist militias, who do not enjoy as much protection within the cabinet, on the other hand, appear bound to be disbanded. This does not please Muqtada As-Sadr, who showed his dissatisfaction by unleashing his militias in clashes with SCIRI's in Baghdad. This has also caused a return of tension between the Sadrists and Coalition forces, resulting in more clashes. 
The growing trend towards a sectarian civil war has in recent weeks pushed several senior Sunni notables to issue public statements in favour of American troops staying in the country, a position which until recently would have been seen as anathema by almost all Sunnis. They clearly fear that the Shiite militias are intent in wiping them out. On the other hand, Shiite politicians are issuing with increasing frequency statements against the interference of foreigners. In July, the first reconciliation conference without any international presence was launched by the government. 

Light and shade at the Oil Ministry
An unexpected lull in the sabotage of oil pipelines in the north has allowed oil production to reach 2.5 million bpd by the end of June, as after 4 months of repairs the pipeline became serviceable again. The Oil Ministry expects production to reach 2.6/2.7 million bpd by the end of the year. After stagnating at 1.5 million bpd since March, oil exports have correspondingly increased to 1.7 million bpd at the end of June. The current forecast is that Iraq will earn US$28 of oil revenues in 2006, up from US$24 billion in 2005, due to both increased production and higher prices. However, it is not all good news from the Ministry. American campaigning on the Iraqi oil industry has intensified over the last month. An American official, the head of the Government Accountability Office (GAO), has gone public to denounce the corruption at the ministry. He estimated that 10% of fuels refined in the country and 30% of those imported were being stolen. Much of this fuel is re-exported, due to the fact that the heavily subsidised Iraqi prices are about half the average for the region. GAO also reported the existence of many ghost employees in the Oil and other ministries. 

Not so keen to privatise
The US are also putting pressure for the drafting of a new law, which allows foreign companies to invest in the oil industry. More in general, pressure is growing for the Iraqi government to start privatising the state industries and opening up the economy. The Iraqi government is not openly opposing such developments, but little action has been taken so far. Some resistance is showing with regard to the privatisations, with the Industry Minister stating that privatisation 'should not be rushed' and that it is not likely to happen for another five to ten years. 
On a positive note Russia has announced in July that it is willing to write off US$10 billion of Iraqi debt. Probably positioning itself for getting hold of at least a slice of future oil contracts, the Russian government has announced US$160 million worth of aid for the reconstruction of Iraq.

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