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Update No: 061 - (01/06/08)

Arguing over Iran
The world was used to see Washington accuse Teheran of interference in Iraq; we were also used to see the Iraqi Sunnis hurl the same accusations towards the Iranians. Now all this is still going on, but the new development is that different Shia factions are now also doing the same. A delegation of members of the ruling Shiite alliance visited Teheran at the beginning of May, with the intention to present evidence of Iranian interference and demand an explanation. Prime Minister Maliki also echoed such accusations and Iraqi state TV showed images of seized weapons which were claimed to be of Iranian origins. The competition among Shiite factions is reaching a stage where the Iranians are beginning to have serious difficulties in managing them. Although no member of the Shiite alliance is taking an overtly anti-Iranian stance, many imply that some sections of the Iranian security forces are playing a less than positive role in Iraq. Only the Islamic Supreme Council of Iraq, one of the three main Shiite groups, maintains a staunchly pro-Iranian position. The Iranians are indeed likely to have less than a fully centralised management of Iraqi groups, but the real problem seems that supporting rival groups and making them all happy is a nearly impossible task in the long run. For the time being the Iranians are trying to address the situation by facilitating negotiations and peace deals. They were indeed reported to have played a key role in ensuring the end of the conflict between government forces and the Sadrist militias. 

Maliki’s resurgence
Repeatedly given up as finished, Prime Minister Maliki is surprising many by enjoying a surge in popularity both at home and abroad. Although his offensive against the Sadrists started badly, with the help of the Iranians and thanks to As-sadr’s long-term views, he managed to reassert government control over Basra and other Sadrist strongholds at least for the time being. This was seen as a display of determination and strength by the public and won him cross-ethnic and cross-sectarian support. Sunni parties, which have mostly been boycotting the cabinet, seem now increasingly inclined to rejoin it. To the extent that Maliki distances himself from what was seen as an implicitly pro-Shiite position, neighbouring Sunni governments have warmed to him. At the same time Maliki has not lost the confidence of the Iranian government, which expressed support for his efforts to rein in the factional militias. There is also optimism on a number of other issues, including the long-awaited oil law, which many now expect to be approved relatively soon. Whether Maliki can progress any further remains however to be seen. Integrating the Sunni parties into the government, including the new groups which are arising from the reconciled armed groups, will require the sacrifice of positions of power and influence by the Shiite groups in the key ministries, a step which Mailiki will certainly need to struggle to secure.

Cautious optimism
Optimism is also on the rise concerning the ability of the Iraqi government to expand oil production. Baghdad forecasts oil revenue for 2008 at US$70 billion and promises that exports will increase by 125,000 bpd in June. However, it will take time for confidence in a long-term recovery to build up. 

Perhaps the most optimistic news of all is that according to the Times (of London) new data suggest that Iraq’s oil reserves may be the largest in the world. The Iraqi deputy Prime minister Barham Salih, said that new exploration indicated that Iraq had 350 billion barrels of oil compared with Saudi Arabia’s 264 billion barrels – the two together totalling more than 600 billion barrels, a full half of the worlds total reserves of 1,292.6 bn. But as to the rate of exploitation for export, Iraq’s 2.2 bn bpd or thereabouts may be compared with Saudi’s 8.562bn bpd, which shows that there is a long way to go before the wretched bombed out, war shattered Iraqi civilians are likely to see much benefit. 
There is still very little sign that the professional middle class, which fled the country during the worst violence, is coming back. Skills in sectors like health are still in short supply. At the same time the mostly US-funded reconstruction effort is still heading nowhere, with hundreds of projects having been abandoned because of security concerns or because of simple mismanagement.

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