Books on Iraq
Update No: 062 - (30/06/08)
Maliki resurgence continues
Prime Minister Maliki appeared to be still gaining popularity in June, as his
crackdown on illegal militias continued to achieve successes. Even the Sadrist
leadership supported the effort to rein in their own rogue elements and Maliki
reciprocated by ordering the army not to target Sadrists indiscriminately. There
are increasingly some signs that Maliki might be able to start a virtuous cycle
on the strength of his recent achievements; for example the main Sunni bloc,
happy to see the Shiite militias reduced, is now ready to rejoin the government,
of course in exchange for a number of ministerial appointments. At the same time
however, on a number of other fronts Maliki’s leadership still appears far
from being decisive. About half of the cabinet posts are still vacant, as he
avoids appointing replacements in order not to start quarrels with the different
factions which support him. The government is still filled with incompetent
party men, whom Maliki uses to buy support in parliament among the factions.
Even within his own party, Maliki has to please several different factions,
which prevents him from getting competent administrators in the jobs and
therefore from delivering an improvement in the quality and quantity of services
delivered to the population.
A display of skill
The issue with Maliki’s successes is whether they are sustainable or not. The
militias have not really been crushed, instead deals have been negotiated and
they are now lying low.
Maliki is nonetheless aware that in order to consolidate the improvements
achieved over the last several months he will have to improve the lot of the
population. The plan is to spend significant portions of oil revenue to
stabilise the areas that have been taken away from the militias. Maliki has
already moved in this direction, by investing heavily in containing inflation.
Although inflation has now reached 16%, up from 11% in January, it is believed
that it would have been much worse if the government had not intervened. Maliki
was quite skilful in having the central bank buy dinars to push the value of the
national currency up, in order to limit prices increases. The dinar gained 20%
to the dollar, after the bank spent US$1-1.5 billion each month to support it.
Even in the course of the ongoing negotiations over a US-Iraq security pact,
Maliki is showing considerable skill. He firmly opposed US demands, which
include the right to arrest and detain Iraqi civilians as well as immunity from
Iraqi prosecution for US soldiers, and instead is trying to get guarantees from
the Americans that they will protect Iraq against any external and internal
threat, which might be more of what Washington is ready to promise. His
unwillingness to be accommodating with Washington’s long-term plans for Iraq
only strengthens American distaste for him – he was never their first choice
of Prime Minister, but he is now strengthened by the successes against the
militias and can claim to have started delivering some goods to the Americans.
Oil exports rise
For the first time since the American invasion, Iraqi oil exports exceeded 2
million bpd in May. This is mainly due to the decline in sabotage of the oil
infrastructure, with attacks falling from an average of 30 a month last year to
just 4 in May. The benefit of increasing oil exports at a time of high prices is
obvious. The plans of the Oil Ministry are however much more ambitious. The
government is about to assign contracts for the maintenance of existing oil
fields, hoping to boost production by 600,000 bpd. Rumours suggest that among
the winners will be BP, ExxonMobil, Total, Chevron and Royal Dutch Shell. Each
contract is worth a modest US$0.5 billion, but the winners will then be well
positioned for more lucrative deals once the new oil law is finally approved.