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Area (


24,001,816 (July 2002 est.)


Iraqi dinar (IQD)



Update No: 034 - (23/02/06)

Containing the Shias
The determined effort of the Shia groups to secure political power and control the administration is having the effect of driving all the other political groups together. The fact that the Kurds would have preferred a stronger electoral performance of Allawi's secular grouping was never a mystery, but in February Kurdish President Talabani went as far as stating that the Kurds will not participate in a government without Allawi. The Kurds' desire to defend Allawi's inclusion might be a reaction to the latter's drift towards an alliance with the two Sunni groupings, which would represent a danger to the Kurds's ambition for an autonomous region in the north. The new nationalist Arab alliance counts on 80 seats in the parliament and because it is formed around Arab nationalist feelings, it is likely to have a less then benevolent view of the Kurdish ambitions, unless some quick action is taken. The alliance was probably encouraged by the Americans, who are keen to limit the expansion of Iranian influence in Iraq, but inevitably such alliance will have aims of its own.

Jafaari is back
After an initial failure to select the alliance's candidate to the post of Prime Minister, an alliance within the alliance of Al-Dawa and Muqtada As-Sadr's group confirmed Jafaari as Prime Minister, defeating the ambition of Abdel Mahdi, one of the leaders of SCIRI, to replace him. The election of Jafaari, who has bad personal relations with President Talabani, will represent a further incentive for the Kurds to expand the ruling coalition to other forces. Since the Sunni groups, now allied with Allawi, have little love for Jaffari either, the formation of a new government is likely to take sometime. The main bone of contention will now be the post of Interior Minister. The US and the UN appear to support Allawi for the job, or in any case a non-sectarian candidate, but he is strongly opposed by the religious Shia groups, especially As-Sadr's. The current Interior Minister, Shiite Bayan Jabr, has been the object of repeated calls to resign from the Sunni side, which accuses him of involvement in sectarian violence. Moreover, since Jafaari is widely considered a rather ineffective premier, the forthcoming government might also face some difficulties in establishing its credentials among the population.

Some management problems
A recent study of the services provided by the Iraqi state found that the only improvement concerns the hours of electrical power provided outside Baghdad, while all the other indicators showed a worsening with respect to the pre-war situation, despite the expenditure of US$16 billion of US aid money and US$40 billion of Iraqi oil money. Another aspect of the mismanagement of Iraq is highlighted by the rapidly developing petrol scandal. In January the main international providers of petrol to Iraq, that is Turkey and Saudi Arabia, have announced that they are stopping exports due to huge arrears in payment, reaching US$1 billion just in Turkey's case. These two countries alone supply over half of Iraq's domestic consumption. In February Kuwait too stopped supplying Iraq, for the same reason, so that Iraqi imports were down by a total of 75%. While availability declines, consumption keeps increasing not least because more and more small generators are being used to generate electricity, due to the failure of the government to supply enough of it. It is not clear on which grounds state officials are refusing to pay the bills, but it does not look good. The government is now considering purchases from Iran, which is itself a large importer of petrol and would therefore export to Iraq mainly for political reasons.

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