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Books on Iraq


Area (


24,001,816 (July 2002 est.)


Iraqi dinar (IQD)


Update No: 041 - (21/09/06)

Fuel shortage eases
Under growing pressure because of the growing fuel shortages, the government was forced to approve a law allowing private companies to freely import and distribute fuel, previously a government monopoly. At the beginning of the summer Iraq's refineries, which overall are running at half capacity due to sabotage and other issues, were produce only 10 million litres of fuel per day. The country needs 22 million. During the summer the government doubled its budget for fuel imports, but corruption has prevented government imports from exceeding 7 million litres, leaving a gap that it is hoped private entrepreneurs will fill. In fact, by the end of August fuel imports had risen to 11 million litres, easing the shortages. A number of new oil refineries are being built in the north and they are expected to come on line soon, reducing the need to rely on fuel imports. Attacks on the oil infrastructure are also reported to be in decline, from five a week in the second quarter of 2006 to just two in the current quarter. 

Whose oil?
While US oil companies say that they are ready to send their people to Iraq despite the continuing violence, the lack of a clear framework regulating investment and ownership is still seen as the main impediment. The hydrocarbon law is still the object of negotiations among politicians, divided between those who wanted regional control, like Kurds and most Shiites, and those who want central control, like the Sunnis and a minority of Shiites. At the end of August it had been announced that an agreement had been reached on oil revenue sharing, but the fact that the details have not been divulged yet casts some doubts about the truth of this statement. The signs are that inter-regional tension is not decreasing at all. The Kurds escalated their claim to autonomy in September, when the leader of the autonomous region, Massoud Barzani, issued a decree not to fly the Iraqi flag and to replace it with the Kurdistan flag. Although he then claimed to have consulted with President Talabani and Prime Minister Maliki beforehand, his move predictably aroused a strong reaction in Baghdad, not only within the ranks of the government, but also within the diplomatic community. US Ambassador Khalilzad was forced to point out how the US government is committed to Iraq national unity and territorial integrity. 

Cabinet changes on the horizon
Prime Minister Maliki announced in September that soon cabinet changes will be implemented, to deal with cases of low performance and others of disloyalty. Although he did not state it explicitly, as far as disloyalty is concerned he implied that Muqtada as-Sadr's group will be the main target, when he said that those who 'have a foot in the government and a foot outside' will have to make a choice. The Sunni speaker of parliament is also seen as likely to become a victim of the reshuffle because of his criticism of the ruling coalition. The news of the reshuffle comes at a time when the negotiations on the issue of federalism have been postponed due to differences within the Shiite alliance, where the groups affiliated with Muqtada al Sadr oppose federalism and Dawa and SCIRI are strongly in favour of it, highlighting how relations within the alliance are increasingly strained. However, Prime Minister Maliki himself is the target of criticism, particularly from the US, for his failure to rein in the militias which are driving the country towards a full-fledged civil war. Maliki's refusal to condemn Lebanon's Hizbollah and his trip to meet Iranian president Ahmadinejad did not contribute to endear him to the Americans, who now say their support is 'not open ended'. In September the control over the armed forces has been handed over to the government by the Americans, adding to a list of institutions, of which it is perhaps the most significant, whose control...will now be fought over by the competing vested interests. 

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