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Update No: 090 - (26/09/10)

Still struggling to form a government
At the beginning of September the two Shiite alliances, the Iraqi National Alliance and Maliki’s State of Law, announced that they have agreed to hold an internal elections to choose the new Prime Minister, on the basis that whoever wins 65% of the vote would be their common candidate. Among the spectators of this process of hard bargaining are the Americans, who would like to see a stable government representative of all the groups. They also hint that they would dislike the participation of the Sadrists in the government. The compromise plan worked out by the Americans would involve a reduction of the powers of the Prime Minister, appeasing fears of Maliki’s domination. A similar position is held by foreign investors, who are aware of the Sadrists’ opposition to foreign oil companies entering Iraq. By September rumours were beginning to circulate that the Americans had come round to support Maliki’s confirmation as the best compromise with the Iranians and guarantee of stability. If the Iranians too resigned themselves to Maliki, forming a coalition would become much easier. Allegedly even the Arab neighbours, with the exception of Saudi Arabia, have dropped support for Allawi as an unrealistic choice which could destabilise the country, not least because it would upset Iran. In reality the Iranian efforts to get a Shiite coalition in power do not seem to have stopped yet and the American move might be a reflection of the fear that the Iranians might still succeed.

In the second half of September the whole issue of coalition making seemed to be thrown once again up in the air by the announcement that Allawi’s group was close to a deal with the Kurdish alliance and with the anti-Maliki Iraqi National Alliance Shiite coalition. The framework for the deal includes Shiite Adel Abdul Mahdi becoming Prime Minister, Allawi becoming President and a Kurdish figure becoming deputy Prime Minister. Are we getting close to a final deal, or are these just two more manoeuvres by consummate politicians, who are trying to increase their leverage faced with each other? It is not clear at this point why the Kurds would give up the presidency, when they are the real kingmakers in this situation. They would have to be promised something substantial in exchange. The Iraqi National Alliance and the State of Law party, now formally reunified in the National Alliance, were still talking of choosing a Prime Minister together even after the announcement from Allawi’s group, although they had not been able to implement their plan successfully yet. This suggests that Allawi was trying to derail the Shiite alliance before they reach a deal among themselves.

The fair of incompetence (or worse?)
Government and American sources have now acknowledged that it will take at least another three years before Iraq’s electricity needs will be met and probably more since electricity demand grows fast. Riots against electricity shortages continue even as the summer nears the end. A new controversy is in the meanwhile arising, over US aid to Iraq: US auditors are reporting that the government is far from being near bankruptcy and is instead sitting over tens of billions of dollars that it has not been able to spend. Why then provide additional aid to Iraq, begin to wonder some people in the US Congress? The Obama administration has requested a total of US$4.5 billion for the Iraqi army and police and other recipients, which might now find it tougher to get through. The question is whether the missing tens of billions have been stolen or just misplaced because of incompetence. Probably the reality is a mix of both.

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