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Books on Iraq

Update No: - (26/11/13)

Summary: The Iraqis have finally started major infrastructural improvement works, which despite reducing oil exports in the short term will allow for a major increase in future exports. But there are elections coming soon and political manoeuvring is rapidly becoming once again the chief concern; the level of infighting is reaching the point where forming a new coalition might prove a daunting task. Despite some hints that a new deal between Maliki and the Kurds was being struck, there are now signs that Maliki might not be fully committed.

Investing in the future
After been on the rise for several months, Iraqís oil production declined for sometime as long overdue repair and maintenance work will cap production in the south. In September exports were just 1.8 million bpd from the south. In November production was already recovering and the works should however then allow production to reach 3.5 million bpd, which will still be short of the original 3.7 million bpd planned for 2013. The average for 2013 will in the end be very close to the 3 million bpd of 2012, showing no sustained growth. Moreover, long-term expansion work at the southern terminal caps exports from the south at 2.3 million bpd at least for most of the first quarter of 2014. Works at the terminal are scheduled to end in mid-2014, by which time export capacity will be boosted to 4 million bpd. The Royal Dutch Shell oil field of Majnoon started production in October and reached an output of 200,000 bpd, but Gazprom has postponed the start of production at its Badra oil field to 2014, because of Iraqi administrative delays and security issues.

Maliki prepares for difficult elections
The most respected Shiite leader in Iraq, Grand Ayatollah Sistani, has for the first time come out against a third term for (fellow Shiite)Maliki, a move which places him on collision route with the Iranians, the more so as he also advocates the replacement of Assad in Syria. Sistani seems worried with Malikiís divisive role in Iraq as a whole and within the Shiite camp. The old Shiite National Alliance is splintering into several groups, with three main factions, Malikiís own State of Law, the Sadrists and the Supreme Islamic Council of al-Hakim. Smaller groups also seem to be planning to contest the forthcoming elections independently, like al-Sharistaniís Mustaqiluun. Moreover Malikiís alliance with Barzani and the Kurds remains shaky, as even in November Maliki provoked the Kurds by announcing a plan to develop the disputed Kirkuk oil fields with BP. Maliki seems to hope that the Iranians will engineer a coalition for him, as they need him in power more than ever in order to secure supply lines into Syria.

Malikiís Shiite rivals in Iraq however might be trying to convince Teheran that a more acceptable Shiite alternative to Maliki could be found, who would also serve Iranís interests. But there are few candidates who can boast like Maliki, of being able to keep both Washington and Teheran among his allies. Malikiís recent trip to Washington was clearly meant to remind everybody of his special relationship with the Americans. The Obama administration, despite much internal criticism confirmed economic assistance to Iraq, as well as the sale of F-16 fighters and also promised to share more intelligence with Iraq. Maliki can also rely on the fact that even the anti-Maliki front is going to be very fragmented, as al-Iraqiyya has split into three separate factions. This suggests that forming a ruling coalition after the elections might end up being even more complicated than the previous time, when it took several months.

Malikiís budget
The new draft budget is reported to be the highest ever at US$150 billion, even if its delivery to the parliament is being delayed, allegedly because Maliki does not want to give to the MPs time to make changes and wants it approved in a hurry, without modifications. In the meantime, though the ever worsening sectarian violence is beginning to lead observers to reconsider their optimism about the prospects of the Iraqi economy. Barclays Investment Bank recently cut its 2013 GDP projections for Iraq from 10.1% to 9.1% and its 2014 projections from 10.2% to 9.3%.

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