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24,001,816 (July 2002 est.)


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Update No: 024 - (25/04/05)

A president, a prime minister, but no cabinet
The agreement on the names of Talabani as President and Al-Jafaari as Prime Minister did not resolve the impasse preventing the formation of the first post-elections cabinet in Iraq. There is also an agreement between the Kurds and the Shias with regard to the distribution of the cabinet posts among the ethno-religious groups, which assigns 16-17 seats to the Shias, 7-8 to the Kurds and 4-6 to the Sunnis, but no agreement on the actual names. During April the agreement on the name of Jafaari appeared increasingly shaky, as critical voices emerged against him even from within his own alliance. Both the more moderate or secular elements, consisting of about 45 members of parliament gathered around the Shia Political Council, and the more extremist ones, such as Muqtada As-Sadr's National Bloc (24 members), are threatening to quit the United Iraqi Alliance (UIA). Ayatollah Al Sistani's influence has so far managed to prevent this from happening, but his role does not go unchallenged any more. Former Prime Minister Allawi, who appears to be trying to form an alliance with the moderate elements of the UIA, implicitly criticised Al-Sistani's role in pushing Iraq towards clericalism. Allawi has been invited to join the cabinet, presumably in order to prevent his anti-Jafaari manoeuvre, but he refused and openly stated that his political programme and that of the UNIA are incompatible. Allawi could also get the support of the Kurds, who are wary of Jafaari's Shiite fundamentalism, while the small Sunni bloc (17 deputies) is also angry with Jafaari because the UIA seems increasingly inclined to concede just 4 ministers to the Sunnis, rather than 6 as they had for some time been given to expect. 
Because March was characterised by relatively low casualties among US troops, many commentators started wondering whether the armed resistance might be on the wane. In the first half of April casualties showed signs of increasing again, although compared to 2004 they remained rather modest. There was a decline in the number of attacks compared to the peak in late 2004-early 2005, but the decline in US losses also has to do with the growing role played by Iraqi government troops.

The oil industry: a double target
While the sabotage campaign against the oil industry showed no sign of abating during April, Iraq's foremost industry also became the object of a purge of corrupt elements and of individuals suspected of cooperating with the insurgents. At least 450 employees have been fired so far, because they were selling fuel on the black market. This is part of a larger campaign against corruption in the government, which includes the obligation for state officials to declare their assets. The oil industry continues to operate in an environment that it would be an understatement to describe as unfriendly. Only 60% of the trucks carrying oil products away from the wells reach their destination, while the other are attacked or hijacked. Smuggling is of course encouraged by the low internal prices, to the extent that the director of the state oil industry suggested during April that prices should be increased. The state oil company maintains that exports in the range of 2 million bpd are easily attainable if security can be improved, which is of course a big if. 

Reconstruction slows down
Whatever the condition of the Iraqi resistance today, the effects of its rise in power in 2004 are being reflected in the current shift of emphasis away from reconstruction and towards security. Much of the US$18.4 billion allocated to reconstruction by the Bush administration has now been re-allocated to the improvement of security. The treatment of potable water has been affected particularly hard and no new treatment sites are planned for this year. Moreover, US$5 billion have been diverted to the Iraqi ordinary budget in order to make up for a shortfall in revenue, due to lower then expected exports of oil. Yet another reason for the slower pace of reconstruction is that the US Department of State has decided to move funds away from large scale projects and spend more (US$832 million) on immediate job creation and training. Direct and indirect additional security costs account for another US$1.3 billion. So far around 2,000 reconstruction projects have started, but only 600 have been completed. 

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