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Books on Iraq
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Update No: 051 - (25/07/07)
Oil law still hanging in the balance
At the beginning of July the Iraqi Cabinet finally approved the new oil law,
which has now been passed on to the parliament for ratification. An oil workers
strike in June highlighted how the government might be vulnerable to the
requests of the Unions, which want to be consulted on the draft law. They oppose
in particular the involvement of foreign companies and are threatening new and
longer strikes (or even a 'mutiny'). Prime Minister Maliki is trying to appease
the oil workers with a two-fold pay rise, but observers believe that the Union
leaders are politically motivated and maintain links with ethnic and sectarian
groups. Therefore, pay rises might not resolve the problem. Unions, moreover,
are not the only source of opposition to the current draft of the oil law. Most
Iraqi experts oppose the revised law, including those who helped draft the
original version, mainly because of the compromise which gives some role in the
management of the industry to the regional governments without appropriate check
and balances, which leave the road open to massive corruption. The experts are
appealing to parliament for a more accurate and detailed discussion of the oil
law, regardless of the deadline set by the Americans for its approval. At
present, it is not even clear how much oil Iraq is producing daily. According to
the US State Department production is stagnant at around 2 million bpd, but
according to the US Energy Department production levels could well be
100-300,000 bpd below that figure. In any case, it appears very unlikely that
the oil law will be approved before the August parliamentary recess, as demanded
by the Bush Administration.
Maliki defies all odds
Prime Minister Maliki's main strength seems to be the absence of a strong
alternative to his name. Deputy Prime Minister Abdul Mahdi offered his
resignation from his post in June, the most prominent of a series of officials
to quit in recent months. The bombing of the Samarra shrine on 13 June has been
a turning point for Maliki's popularity among his own Shiites, not least because
of allegations of complicity from within the ranks of the corrupt police force.
The same bombing prompted yet another boycott of the parliament by the Sadrist
group. As Maliki maintains control over the Dawa party, any determined attempt
to push him out would likely break the Shiite alliance. This gives Maliki
sufficient confidence to rebuff his critics, be they the Bush Administration or
fellow Iraqi politicians. In mid-July, somewhat provoked and clearly near the
end of his tether, he even told the Americans that their troops are not needed
and that Iraqi security forces would manage on their own. Having insisted on
establishing a democratic regime in Iraq and having hoped that democratic
elections would have resolved all the problems, the Bush Administration is now
finding major difficulties in managing its Iraqi counterparts.
Economy badly in needs to be jump-started
Insufficient electricity supply is the main hurdle which keeps the economy
down. In July the government was only able to satisfy 50% of the country's
demand for electricity, the lowest level from January 2004. One of the causes of
the further deterioration is that the staff of the Ministry of Electricity is
not sufficiently trained or motivated to handle the repairs and improvements
done by the Americans of the generators, some of which have suffered serious
damage, to the extent that the US Army was forced to bring them back under its
control. Another cause of the paralysis are fuel shortages. Fuel prices have
risen 50% over the last year as the Saddam-era subsidies are being phased out,
but supply remains insufficient. The long queues are driving many towards the
black market, where prices are three times as high.
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