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Books on Iraq
REPUBLICAN REFERENCE
Area (sq.km)
437,072
Population
24,001,816 (July 2002 est.)
Capital
Baghdad
Currency
Iraqi dinar (IQD)
President
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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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