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Books on Iraq
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Update No: 058 - (28/02/08)
Unexpected progress
The political front showed some unexpected progress in February after the
parliament approved three new laws, in an unusual spur of activity. Apart from
the 2008 budget, the parliament also approved an amnesty bill and a provincial
powers bill. The amnesty benefits the Arab Sunni minority and should allow
thousands of prisoners linked to the insurgency to return home, but there are
doubts about its effective implementation. The law on provincial powers should
lead to new elections in October, which in turn could allow the Sunni Arabs to
elect their own representatives to the provincial councils. Mailiki is also
trying to appease his critics from within the running coalition by holding
regular meeting with the President and the vice president.
The Americans now hope to turn As-Sadr's militia into allies in a way similar to
what they have done with many Sunnis militias. Already an estimated 20% of the
militias recruited by the Americans over the last year are Shiite, although the
extent to which they belonged to Muqtada As-sadr's group is unclear. American
efforts seem to be receiving some encouragement as Muqtada renewed in February
his six month ceasefire for another six months, despite grassroots support for a
return to fighting in response to alleged targeting of Sadrists by the Iraqi
security forces. He is trying hard to rein his militias and impose some
discipline, weeding out the more extreme and unruly elements. Muqtada now talks
of turning his movement into something more like a social solidarity
organization and seems clearly worried about the war-weariness growing within
the Shiite community, which reacted very negatively at episodes of clashes among
Shiite militias. But his ultimate aims remain unclear.
Long term prospects for oil still dubious
Although oil production has now climbed some way upwards and stands at 2.3
million bpd, future prospects of the sector are jeopardized by the continuing
failure to approve the new oil law. Earlier optimism about its approval has now
completely evaporated and the deadlock in the parliament seems irresolvable.
There are reportedly four different drafts of the law in circulation, but none
is supported by a majority. In the meanwhile Baghdad is trying to involve
foreign oil firms by offering them a role in servicing the existing oil
infrastructure. More than 70 companies have registered to compete in the
forthcoming tenders. At the same time Baghdad is trying to prevent further deals
between oil companies and the Kurdish regional authorities by using retaliation.
The oil ministry has already halted oil exports to SK Energy (South Korea) and
OMV AG (Austria), which it accuses of illegal oil deals. Figures for last year
show that oil exports rose 9.2% to an average of 1.6 million bpd, a modest
achievement given the potential. The reduction in sabotage activity against the
northern Iraq pipeline is the main reason for this increase, as many of those
attacking the pipelines have not been hired by the government to protect them,
although US$560 million have also been spent on oil facilities upgrades by
foreign companies. The oil ministry now plans to bring production to 3 million
bpd by the end of the year, but these forecasts to say the least, lack
conviction in the outside world.
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