Foreigners can own 100% of Iraqi companies, must pay only a 15% flat tax on profits, and may take 100% of those profits home when and how they please..
The expected announcement of Iraq's new government marks the culmination of a remarkable process. The former bully-boy of the Arab neighborhood has become its only functional democracy. What may be the world's richest resource economy, once the closed shop of a murderous clique, is today wide open for business.
Wall Street Journal: The Coming Iraqi Business BoomPosted: December 21, 2010 by CURRENCY NEWSHOUND - Just Hopin in Iraqi Dinar/Politics
Tags: Baghdad, Extractive Industries Transparency Initiative, Iraq, middle east, oil, Persian Gulf, Saudi Arabia, Shia Islam, Suez Canal 0Foreigners can own 100% of Iraqi companies, must pay only a 15% flat tax on profits, and may take 100% of those profits home when and how they please.
The expected announcement of Iraq’s new government marks the culmination of a remarkable process. The former bully-boy of the Arab neighborhood has become its only functional democracy. What may be the world’s richest resource economy, once the closed shop of a murderous clique, is today wide open for business.
Driven by what many geologists consider the world’s largest oil reserves, Iraq will probably be the world’s biggest crude oil producer within a decade. The country currently ranks second to Saudi Arabia in official reserves, with 143 billion barrels. With much of Iraq’s exploration still to come after a three-decade hiatus(A gap or interruption in space, time, or continuity; a break: "), and with Saudi Arabia’s reserves substantially inflated and already in decline, Iraq could take the mantle as No. 1 in fairly short order.
Iraq last year signed 12 oil contracts that promise to take output from under two million barrels per day currently—less than Algeria—to over 12 million by 2016. This timeline is probably optimistic, but the contracts will likely see Iraq surpass Saudi Arabia’s 10 million to 11 million barrels per day within a decade. And these figures include no contributions from Iraqi Kurdistan, from natural gas reserves, or from new oil fields, with which the lightly-explored country is replete.
The Saudi comparison suggests that as Iraq’s oil production rises, its economy could grow approximately six-fold over the coming decade—gross domestic product is currently $66 billion—and add a mind-boggling $300 billion in annual GDP. This means one of the largest economic reconstruction and development booms in history.
The entire Iraqi economy is being rebuilt. The government’s electricity program has a $50 billion price tag. Baghdad has awarded the reconstruction of Sadr City to six Turkish companies at a cost of $11 billion. Nationwide, thousands of police stations, schools and clinics will be built. Airports, bridges, dams, railways and roads are being planned. The $20 billion Al Faw port project will create the leading port in the Persian Gulf. A modern army, air force and navy will be trained and armed. The investment programs of last year’s 12 oil deals alone add up to well more than $200 billion.
The holy cities of Najaf and Karbala currently receive more annual visitors than Mecca but have almost no hotel space or modern residential facilities. Iraq’s real-estate sector generally is warming up, with Abu Dhabi companies alone committing over $65 billion in the last year. New refineries, cement plants and steel mills are being financed across the country.
Iraq’s greatest resource is its famously resourceful, tough, educated and enterprising people. Whereas the capitals of the Gulf oil monarchies did not have paved streets a generation or two ago, Baghdad and Basra are ancient capitals of commerce, ideas and global finance.
Oil, people and history are not Iraq’s only advantages. One of the important food-exporting countries of world history, watered by the Tigris and Euphrates rivers, Iraq possesses abundant agricultural potential. Located at the head of the Persian Gulf, Iraq is poised to regain its ancient role as a trade link between East and West. A modern rail system linking the Gulf to Europe via Turkey will provide Asian exports a faster, safer and cheaper alternative to the Suez Canal and the Horn of Africa.
Perhaps most important of all, Iraq’s is a free economy. There is no ruling family, party or tribe in Iraq, and there is no culture of religious imposition.
There is strong evidence that Iraq can avoid much of the “oil curse” and build a more cosmopolitan and modern economy than those of its autocratic neighbors. In the last election, senior Iraqi leaders campaigned on, among other things, establishing individual oil accounts for Iraq citizens to receive their share of the nation’s wealth directly. Unique among the region’s resource economies, this would put the state at the mercy of the people, not the other way around.
The quality of Iraq’s economic management is visible in the soundness of its macroeconomic picture. Inflation is under control at 5% per year, the government budget will likely be balanced with increased exports in 2011, and the Iraqi dinar (soon to appreciate as exports take off) has held steady against the U.S. dollar since early 2009. GDP growth, forecast by the International Monetary Fund to be 11.5% for 2011, is already among the highest in the world, with the investment boom barely in its infancy and the export surge yet to begin.
Corruption, of course, is a problem. But Iraq’s oil industry, which accounts for 80% of the economy, is one of the world’s most transparent. Last year’s auctions were subject to competitive bidding, the contract terms were announced publicly, and the bids were opened live on national television.
To followers of extractive industries, it was previously unimaginable that this could happen outside of a few highly developed countries like Norway or Australia. This year Iraq was accepted on the membership track for the international Extractive Industries Transparency Initiative. It is the only Middle Eastern oil country even to apply.
Violence in Iraq is now mostly a criminal matter. Over the past two years, the country has suffered fewer than 40% of the deaths by violence that Mexico has. Iraqi fatalities are now well below the levels seen during the quiet months immediately following the U.S invasion in 2003. A visit to Baghdad or Basra today isn’t intimidating for businessmen accustomed to Lagos or Rio de Janeiro.
Bureaucracy is Iraq’s biggest problem. Incorporating local entities is expensive and time-consuming. Obtaining a visitor’s visa is absurdly difficult for a country requiring so much foreign investment. And numerous ministries and government agencies frequently claim authority over simple business matters. But the big picture for foreign companies is positive, as Iraq has a substantially more modern and liberal regulatory framework than almost any nearby country. Foreigners can own 100% of Iraqi companies, must pay only the 15% flat tax that the rest of the economy pays on profits, and may take 100% of those profits home when and how they please.
Nine months has been a long time to wait for a new government, but the process has happened peacefully and constitutionally. That’s far more encouraging than all the country’s oil reserves together.
http://on.wsj.com/fQc0ML
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Iraq to vote on new government after 9-month gap
21 Dec 2010
Source: reuters // Reuters
* Iraq poised to vote on government 9 months after election
* Top oil leadership promoted to broader energy roles
* Investors hope cabinet formation will bring stability
By Waleed Ibrahim
BAGHDAD, Dec 21 (Reuters) - Iraq's parliament is due to vote on a new government on Tuesday, nine months after an inconclusive election left politics in limbo and delayed investments to rebuild the country after years of war.
Lawmakers are scheduled to begin voting on Shi'ite Prime Minister Nuri al-Maliki's 42-strong cabinet list -- which leaves Kurdish veteran Foreign Minister Hoshiyar Zebari in place and includes current Oil Minister Hussain al-Shahristani as deputy prime minister for energy -- at 2 p.m. (1100 GMT).
Highlighting the ethnic and sectarian divides that pervade the war-ravaged country, parliament had to postpone the vote on Monday after last-minute factional disputes and political horse-trading over posts delayed the government's formation.
Maliki has yet to decide on permanent choices for some positions, including sensitive security-related ministries such as defence and interior.
The prime minister's partial list of proposed ministers, published on Monday, promoted deputy oil minister Abdul Kareem Luaibi to minister and made prominent Sunni leader Rafie al-Esawi finance minister.
"The deal the parties worked out is rather elaborate but the critical thing is that they were able to get to this point through peaceful negotiations without any return to large-scale violence," said Shadi Hamid, director of research at the Brookings Doha Center.
"That said, power-sharing deals like this one tend to be quite fragile and so the next few months will present a crucial test for the ... rival blocs."
INVESTMEMTS IN OIL
International investors are watching developments in Iraq's energy sector with great interest as the country embarks on an ambitious programme to exploit its vast oil resources and rebuild its neglected and damaged infrastructure.
While Shahristani was minister, the oil ministry reached a series of deals with oil majors that could boost Iraq's output capacity to 12 million barrels per day, rivalling global leader Saudi Arabia, from about 2.5 million barrels per day now.
For international oil companies, Shahristani's continued control over the oil sector will be seen as assurance that contracts he agreed will be honoured in the absence of formal guarantees, since Iraq still lacks a new hydrocarbons law.
The appointment of Luaibi could also be seen as a sign of continuity for companies that signed deals with Iraq to develop its oilfields, which are among the largest in the world but suffer from a lack of investment during decades of war and international economic sanctions [ID:nLDE6BJ19S].
The final deadline to approve the cabinet is at the end of the week. A power-sharing deal on Nov 10. between Shi'ite, Sunni and Kurdish blocs put Maliki on track for a second term as prime minister. The pact returned Kurd Jalal Talabani as president and made Osama al-Nujaifi, a Sunni, parliament's speaker.
Former Prime Minister Iyad Allawi, a secular Shi'ite whose cross-sectarian coalition won the most seats in the March 7 vote, was unable to gather enough support to secure the premiership. However, he has said he will also join the government as head of a new national strategic policy council.
Allawi's decision, announced on Sunday after weeks of wavering, could soothe worries about renewed sectarian violence.
After decades of war and sanctions, and 7-1/2 years after a U.S.-led invasion that toppled Sunni dictator Saddam Hussein, Iraq is seeking to rebuilt its shattered infrastructure. The country relies on oil for 95 percent of federal revenues. (Writing by Caroline Drees; Editing by Jim Loney)
http://musingsoniraq.blogspot.com/2010/12/partial-iraqi-cabinet-approved-by.html
By my count, if you include the temporary ministers the major lists walked away with the following number of posts:
Iraqi National Coalition: Premier, deputy premier for energy, deputy speaker of parliament, 21 ministries (7 temporary)
- State of Law: Premier, deputy premier for energy, 11 ministries (5 temporary)
- Sadrists: deputy speaker, 6 ministries (2 temporary)
- Fadhila: 2 ministries
- Hezbollah Iraq: 1 ministry
- SIIC: 1 ministry
Iraqi National Movement: Speaker, deputy premier, 8 ministries
Kurdistan Coalition: President, deputy premier, deputy speaker, 6 ministries (3 temporary)
- KDP: deputy premier, deputy speaker, 3 ministries (2 temporary)
- PUK: President, 1 ministry
- Kurdistan Islamic Union: 2 ministries (1 temporary)
===========
Hosheyar Zebari as Foreign Minister,
Rafea Al Issawi as Finances Minister,
Abdul Karim Al Luaibi as Oil Minister,
Luaibi’s time to lead
The deputy oil minister has avoided the spotlight, yet he stands more than six feet tall and has managed Iraq’s upstream development, including the auction of 11 oil and 3 gas deals to foreign oil companies.
Now, Abdul Karim Luaibi, picked by Prime Minister Nouri al-Maliki to be the next Iraqi minister of oil, will shepherd those projects into fruition. He will oversee tens of billions of dollars in foreign money, technology and workers, in a massive effort to increase Iraqi oil production…
Then-Deputy Oil Minister Abdul Karim Luaibi after initialling the Majnoon oil field contract with officials from Shell and Petronas. (BEN LANDO/Iraq Oil Report)
By Ben Lando of Iraq Oil Report
Published December 23, 2010
The deputy oil minister has avoided the spotlight, yet he stands more than six feet tall and has managed Iraq’s upstream development, including the auction of 11 oil and 3 gas deals to foreign oil companies.
Now, Abdul Karim Luaibi, picked by Prime Minister Nouri al-Maliki to be the next Iraqi minister of oil, will shepherd those projects into fruition. He will oversee tens of billions of dollars in foreign money, technology and workers, in a massive effort to increase Iraqi oil production…
Ziad Tarek as Electricity Minister,
Ali Al Adib as Higher Education Minister,
Mohammed Tamim as Education Minister,
Ezzdin Al Dawla as Agriculture Minister,
Mohammed Salem Al Laban as Construction and Habitat Minister, Mohammed Hamid Amin as Health Minister,
Ahmad Nader Dali as Industry Minister,
Hassan Al Shumari as Justice Minister.
Mohammed Allawi as Communication Minister,
Reidar says: Allawi has participated all the way, with high-level meetings with Maliki, a “keynote speech” in the assembly, his trusted cousin serving in the next government and in fact quite a few Iraqiyya members getting upset with the way in which he reportedly influenced the nomination of Iraqiyya candidates for the various ministers. So there is no suggestion right now that he is dropping out.
Abdul Karim Al Samarraie as Sciences and Technology Minister,
Saadun Al Dulaimi as Culture Minister,
Mohammed Shayaa as Human Rights Minister,
Karkis Sleiwa as Environment Minister,
Dindar as Immigration Minister,
Amer Al Khizaii as State Minister for National Reconciliation Affairs,
Ali Al Dabbagh as State Minister and Cabinet spokesman,
Safaa’din Al Safi as State Minister for Parliament Affairs,
Ali Al Sajri as State Minister for Foreign Affairs,
Hussein Al Shaalan as State Minister for Tribes Affairs,
Sabah Mazahem, Hasan Al Sari and Nurhan as State Ministers.
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Maliki, the ministry will be acting secretary until the agreement on the figures, which will occupy those ministries.
Now hes reseting everything, just to sit on his throne, its a disgrace. you can clearly see Iraqiyah is sitting on all of the decision making ministries, while we others got Maliki on his throne with his prime-minister wage.
Thats all we contributed with our votes, to make Maliki a prime-minister without power.
Rose Nuri al-Shawish / Deputy Prime Minister / Kurdistan Alliance
Saleh al-Mutlaq / Deputy Prime Minister / Iraqi List
"I still see the Baath Party as the best party we have seen," Dr. Mutlak said. "If you compare them, they are much better than the parties that are governing the country now."
http://www.nytimes.com/2005/07/01/in.../01sunnis.html
No one can say Mutlaq is sectarian, his wife is shia, and he has always urged sunnis and shia to put aside their divisions. Just because he was in the baath along time ago does not mean he is a bad person, he is more honest and has better intentions than many other Iraqi politicians.
Do you really trust a man who has this history? His beliefs can be bought with paper! Who cares if his wife is shiite, the singer Aziz Ali was a shiite who was a strong supporter of Nazism, while his wife was Jewish. Who you are married to, who your parents are, doesn't matter. A ba3athee is a ba3athee, believe me the biggest ba3athees were the shiites who worked for the mukhabarat during the 70's.
idiotic MP losers is the apologist shoe shining of ba'athists, ex ba'athists, arabic-depth traitors, and their allied Islamist (seculars ), a joke indeed.
If we let them back, even in the form of members of Badr, Iraqiyah, the Islamic Revolution or even the juhoosh who worked with Saddam in KDP or PUK, there will always be a chance for a return. We are the record holders in coups, its a suprise no attempts has been made in the past 9 years. And wont be a suprise if they make another attempt in the future, they have the funding and they have the political support of their Ba3athee brothers in Syria and monarchists in Jordan.
Underscoring the serious rifts that still remain among Iraq's rival political factions, who are divided along sectarian and ethnic lines, most Shiites boycotted the vote on the lifting of the ban on the three Sunni leaders.
Only 170 out of 325 parliamentarians showed up with 109 voting in favor of the motion.
"We boycotted the vote…because we are not convinced that these people should participate in the political process and government formation," Kamal al-Saedi, a senior Shiite parliamentarian from Mr. Maliki's bloc, told The Wall Street Journal after the vote.
I also have trouble trusting a list that includes the filthy Baathist apologist Dhafer al-Ani as one of its prominen figures. "Secular, inclusive" my a**.
Just watch in this clip as he justifies and/or rationalizes the crimes of the Baathist party. It is beyond me why he is allowed to participate in the political process.
Hussain al-Shahristani / Deputy Prime Minister / National Alliance
Rafie al-Issawi / Ministry of Finance / Iraqi List
Ministry of State for Parliamentary Affairs / purity of net debt / National Alliance
Hassan Shammari / Ministry of Justice / National Alliance / Virtue Party
Good effect / Ministry of State for the marshes / National Alliance
Mohammed Hamedamin / Ministry of Health / Kurdistan Alliance
Dindar Ndjeman / Ministry of Displacement and Migration / Kurdistan Alliance
Ali Alsjeri / Ministry of State for Foreign Affairs / center coalition
Mohammed Allawi / Minister of Communications / to the Iraqi list
Jassim Mohammed Jaafar / Minister of Youth and Sports / National Alliance /
Ezzeddine State Department of Agriculture / menu Iraqi / or increase the worldwide abolition of the same menu
Ali al-Dabbagh / spokesman for the Government / Ministry of State / the National Alliance /
Hoshyar Zebari / Ministry of Foreign Affairs / Kurdistan Alliance /
Abdel Karim and coffee / Ministry of Oil / National Alliance /
Ziad Tarek / The Iraqi Ministry of Electricity Aalqaimp
Saadoun al-Dulaimi, the Ministry of Culture / center coalition /
Abdul Karim al-Samarrai / Ministry of Science and Technology / Iraqi List
Mohamed Salem Banan / Ministry of Housing and Construction / National Alliance /
Ahmed Daly Karbouli / Ministry of Industry / Iraqi List
Sargon cast him for waza / Ministry of Environment /
Mohammed Tamim / Ministry of Education / Iraqi List /
Ali al-Adeeb / Ministry of Higher Education / National Alliance /
Mohammed Hamid, Secretary / Ministry of Human Rights /
Salah Muzahim Jubouri / Ministry of State / Iraqi List /
Nassar al-Rubaie / Ministry of Labour and Social Affairs / National Alliance /
Hadi al-Amiri / Ministry of Transport / National Alliance /
Mohammed Xiaa / Zarrp and human rights /
Dindar Ndjeman / Ministry of Displacement and Migration / Kurdistan Alliance /
Amer Khuzaie / Ministry of State for National Reconciliation / National Alliance
Turhan appearance / Ministry of Sta
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IB wrote
Arabic depth, is the traitors highest loyalty to non-Iraqi Arabs. I know about Iraqi arabs, all of my grandparents are ones, is that enough for you.
Aliraqia is composed of people who supported the animal resistance, Islamists (like the grand secular Al hashimy), ex-ba'athists as well as Arabist sell outs to the "Arabic depth",and they unforgivably are anti-deba'thification to the bone. Does it hold some true decent seculars, probably, are they the majority or even in high numbers, I don't believe so.
Personally know people who voted for aliraqia, and they are shia for whatever its' worth to you.A lot of the voters of Iraqia (I would venture as high as 70-75% of them) see shia and Iran as one and the same, basically Arabic racists combined with sunni sectarianism (not necessarily all Islamists), add to that some groups of people whose families never bothered to cleanse their minds and brain of the Saddam propaganda about Iraqi groups, because simply put, that propaganda did not affect anyone in their grouping, or worse, it is believed by them.I bet you money they would support returning citizenship to 10's of thousands of Iraq people whose citizenship saddam stripped
It does not matter who it offends anymore (people can act offended all they want), if shia are called Iran then the majority of aliraqia voters are the representative of the non-Iraqi sectarian racist Arabs, if it is acceptable for the former, it is acceptable for the latter, and their behavior has showed it more than once since 2003 (if we forget the prior one).
__________________
Top officials in Iraq’s next government (Reuters)
http://www.khaleejtimes.com/DisplayArticle09.asp?xfile=data/middleeast/2010/December/middleeast_December340.xml§ion=middleeast
21 December 2010, 1:26 PM
Here are some of the key players who are expected to serve in Iraq’s next government. Hassan al-Sineed, a senior parliamentarian from Maliki’s party, made the names public in an interview with state-run television.
The ministers must be confirmed by the legislature, which is scheduled to vote on Tuesday.
Nuri Al-Maliki, Prime Minister
Maliki, a Shia, rose to power as a compromise candidate for premier in 2006. He struggled to control competing political factions but won respect for curbing sectarian violence by sending the army against Shia militias. Born in 1950 in Hindiya, he holds a master’s degree in Arabic and worked at the education ministry before fleeing Saddam Hussein’s regime.
Jalal Talabani, President
Talabani was born near Arbil in northern Iraq in 1933 and became a lieutenant to Mullah Mustafa Barzani, patriarch of Iraqi Kurdish nationalism and founder of the Kurdistan Democratic Party. He split from the KDP in 1974 and formed his own party, the Patriotic Union of Kurdistan, in Damascus the following year. Talabani became Iraq’s first elected president in more than 50 years in April 2005 and was selected again in April 2006 as a national unity government was put together.
Hussain Al-Shahristani, Deputy Prime Minister for Energy
A nuclear scientist by training, Shahristani, a Shia, is the architect of Iraq’s ambitious plans to become a leading oil producer and tap its rich fields for the money needed to rebuild war-damaged infrastructure. Born in 1942, he studied in Britain, Russia and Canada. He was imprisoned by Saddam Hussein for activities against the regime. Under Shahristani’s guidance, Iraq signed contracts with global oil firms in a bid to boost output capacity to 12 million barrels per day in coming years.
Abdul Kareem Luaibi, Oil Minister
Born in the Iraqi capital in 1959, Luaibi graduated from the University of Baghdad with a bachelor’s degree in oil engineering. He was hired by the government as an oil engineer with the South Oil Company in 1982.
Luaibi worked with the Midland Refinery Company, another Oil Ministry affiliate, from 1993 to 1999 and moved to the technical department of the ministry in 2006. He moved up the ranks quickly, to inspector general, from 2007-09, and then as deputy minister in March 2009.
Luaibi is known to have good relations with international oil companies. He led most of the talks in the first and second bid rounds for Iraq’s oilfields and signed many of the contracts with global majors.
Luaibi’s time to lead
The deputy oil minister has avoided the spotlight, yet he stands more than six feet tall and has managed Iraq’s upstream development, including the auction of 11 oil and 3 gas deals to foreign oil companies.
Now, Abdul Karim Luaibi, picked by Prime Minister Nouri al-Maliki to be the next Iraqi minister of oil, will shepherd those projects into fruition. He will oversee tens of billions of dollars in foreign money, technology and workers, in a massive effort to increase Iraqi oil production…
Then-Deputy Oil Minister Abdul Karim Luaibi after initialling the Majnoon oil field contract with officials from Shell and Petronas. (BEN LANDO/Iraq Oil Report)
By Ben Lando of Iraq Oil Report
Published December 23, 2010
The deputy oil minister has avoided the spotlight, yet he stands more than six feet tall and has managed Iraq’s upstream development, including the auction of 11 oil and 3 gas deals to foreign oil companies.
Now, Abdul Karim Luaibi, picked by Prime Minister Nouri al-Maliki to be the next Iraqi minister of oil, will shepherd those projects into fruition. He will oversee tens of billions of dollars in foreign money, technology and workers, in a massive effort to increase Iraqi oil production…
Rafie Al-Esawi, Finance Minister
Esawi, a prominent Sunni leader, was born in Falluja in 1966. Having trained as a medical doctor in Baghdad and Basra, he worked as the manager of a Falluja hospital from 2003 to 2004 and was director of Anbar province’s health department from 2004 to 2005.
He has served as minister of state for foreign affairs under Maliki, and was a deputy prime minister in the outgoing government.
Hoshiyar Zebari, Foreign Minister
Zebari, a Kurd, is the incumbent foreign minister and has served in the post since shortly after the 2003 US-led invasion. Zebari was an active member of the Iraqi opposition in during Saddam Hussein’s dictatorship and was a spokesman for the Kurdistan Democratic Party. He was born in 1953 in the Kurdish town of Aqra. Zebari studied political science in Jordan, and earned a master’s degree in sociology at the University of Essex in Britain in 1980. He is considered a knowledgeable and well-versed diplomat who relishes his international status.
Iyad Allawi, Head of National Council for Strategic Policies
A secular Shia who was born in 1945, Allawi headed a transitional government in 2004 and 2005, when the United States pulled the strings and Iraq was on the verge of sectarian war. He is the head of the cross-sectarian Iraqiya bloc, the main Sunni-backed political coalition. A neurologist and businessman educated in Baghdad and London, he hails from a wealthy merchant family with a strong political heritage. His grandfather helped to negotiate Iraq’s independence from Britain in 1920.
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That said, from the perspective of Prime Minister Nuri al-Maliki of the all-Shiite National Alliance, the process has been handled quite masterfully. From a situation where both the Kurds and the secular Iraqiyya entered the negotiations with ambitious agendas, he has managed to create an end game where many from the other parties were forced to abandon their principles (or at least saw them consigned to an uncertain future), with only the thirst for power in the shape of high government office remaining. The “robust power-sharing arrangements” and checks and balances that the United States has been calling for is nowhere to be seen; instead there are simply ministers – and a whole lot of them. Signifying the extent to which Maliki has managed to turn the tables, after months of talk about the need to check his tendency of centralising his own power in the security forces, the parliament today voted by a big majority to let him personally take care of the three most important security ministries for the time being.
As for how the individual players fared in today’s appointment, the outcome is a mixed one. It is logical to start with Iraqiyya, which was the big winner in the now distant 7 March elections. On the one hand, Iraqiyya has travelled quite far from its original negotiating position: They lost the premiership, and the future (and indeed the coming into existence) of the projected “national council for strategic policies” seems uncertain at this point since it is predicated on consensus on that thorny issue in the Iraqi parliament. Additionally, they have signed up to participate in a government which is based on agreements with the Kurds that contradict everything Iraqiyya stands for in terms of Iraqi nationalist policies. On the other hand, though, Iraqiyya has also scored some significant victories. First it secured the important speakership for Usama al-Nujayfi last November. Today, it was given what is by far the greatest slice of influence in the next government alongside that of Maliki’s own State of Law faction within the National Alliance. Rafi al-Eisawi has been given the all-important ministry of finance, and there are other high-level appointments for Salih al-Mutlak (deputy premier), Izz al-Din al-Dawla (agriculture), Muhammad Tamim (education), Abd al-Karim al-Samarraie (science and technology), Muhammad Allawi (communications), Ahmad al-Karbuli (industry) and Salah al.-Jibburi (minister of state). Not all of these portfolios are equally important, but as a group these ministers will be the only point of gravity that could potentially form a challenge to Maliki’s own main backers (which include Jasim Muhammad Jaafar, a Turkmen, as sports minister, Muhammad Shiya al-Sudani of Maysan as minister for human rights, Ali al-Adib as minister for higher education, Husayn al-Shahristani as deputy premier, Ali al-Dabbagh and Safa al-Din al-Safi as ministers of state , plus a more technocratic but probably still reasonably Maliki-friendly new oil minister, Abd al-Karim Luaybi).
On the other hand, the Kurds have received relatively poor representation, with only one “hard” ministry (foreign) given to Hosyar Zibari. The other ministries given to them include health, commerce, women’s affairs, and, according to some accounts, civil society! Some reports said the Kurds wanted to press Maliki to sign an approval of their famous demands, and some reports said they got the coveted signature. Signature or not, the problem for the Kurds are likely to be their comparatively minor role in the next government and the fact that most of their demands, such as the passage of an oil law, is predicated on both consensus within the unwieldy government and action by the Iraqi parliament.
The other assumed kingmaker in this process, the Sadrists, also have seen relatively modest results, with just two ministers proper (Nassar al-Rubayie for works and planning and Muhammad al-Darraji for housing and development), plus one minister of state (Abd al-Mahdi al-Mutayri). They are however expected to be remunerated for their backing of Maliki through high offices in some of the southern governorates, from where some leading Daawa people (such as Muhammad al-Sudani) now join the central government in Baghdad instead. Fadila received even less (Hasan al-Shammari at justice and a female minister of state), but the truly remarkable development in the Shiite camp must be the relative marginality of ISCI and Badr. Hadi al-Amiri was reasonably loyal to Maliki during the internal rivalry in the National Alliance and he has been awarded the transport ministry. Other than that, there is Hasan al-Sari who continues as minister of state for the southern marshlands (he is “Hizbollah in Iraq” rather than ISCI though), but not much else except possibly one of the less known new ministers of state.
Maliki and the Kurds: An Apparent Fudge on Oil Exports
Reidar Visser | Thursday, 27 January 2011 15:10 at 15:10 | Categories: Iraqi constitutional issues, Oil in Iraq | URL: http://wp.me/pBkdV-Bw
Among the first moves of the new Maliki government has been an agreement with the Kurdistan regional authorities (KRG) to resume oil exports from fields in Kurdistan operated by foreign companies that have cut separate deals with the KRG previously. Exports are supposed to start as early as 1 February.
So far, relatively few details about the agreed arrangements have been revealed. Baghdad has reportedly agreed to lower the minimum export requirement for Kurdistan in the annual budget to 100,000 barrels per day (it was originally 150,000 bpd, which the Kurds found somewhat steep), and unlike the previous attempt at starting export in the summer of 2009, Baghdad will this time pay a “contribution” (musahama) towards covering the expenses of the foreign companies that operate in Kurdistan. So far, the exact size of the payment has not been specified, but according to Asim Jihad of the Iraqi oil ministry it will be paid to the Kurdish regional authorities rather than directly to the foreign companies, and there are certain “barter” elements to the deal as well, including improvements to the refining capacity and electricity supply of Kurdistan plus provision of oil for the local market in Kurdistan.
Thus in legal terms, it seems as if the stalemate regarding the contract status of the foreign companies is continuing as before. The Kurds are reluctant to formally submit the contracts to Baghdad for approval since that would mean not only potential challenges to the contract terms but also cession of what the Kurds believe is their sovereign right to conclude such deals with third parties. Baghdad, for its part, is reluctant to pay the companies that operate in Kurdistan directly according to the contract terms, since that would mean recognising the right of federal authorities to sign deals with foreign companies without coordinating with Baghdad – which in turn would mean that not only federal regions but also every governorate across Iraq could do the same thing. Since federal regions and governorates have exactly the same residual rights under article 115 of the constitution, it would be potentially suicidal for the central government to admit a residual power to sign contracts for so-called “future fields” without coordination with Baghdad (as per the “strategic policy” imperative of article 112 second). Under this kind of permissive scenario, Basra, Maysan and Anbar would suddenly negotiate with foreign companies without reference to Baghdad. It seems far more likely that Baghdad is aiming for a restrictive interpretation of article 112 that would require coordination with the oil ministry for all future deals, and instead aim for temporary ad hoc, horse-trade solutions of the kind now agreed with the Kurds in the short term while it is working on boosting its own export capacity, which will still take some years.
Thus unlike what happened in 2009, money will this time be paid from Baghdad to Kurdistan, and presumably the Kurds will then pay the operating companies. The problem for the Kurds is that as long as the contracts are not submitted for review (as opposed to just making them public), Baghdad will continue to pay Arbil with reference to its own assessment of reasonable costs rather than in accordance with the lucrative terms of the contracts. Whether this in the long run is actually good enough for the Kurds – and not least their foreign partners – remains to be seen. Clearly, the foreign companies that operate in Kurdistan are not there in order to do non-profit work forever, and the Kurds will be under pressure to pay them more generously instead of simply compensating them for expenses. Other potential hitches regarding the new arrangements relate to parliamentary oversight: Presumably the compensation payments are to be specified in the annexes to the 2011 budget to be debated in February, and presumably the payments due to be transferred to the Kurdish ministry for energy resources as part of the deal will be subject to parliamentary debate in the Kurdish regional assembly as well, where the PUK and Gorran have a history of asking critical questions about the KDP-led oil policy.
Nonetheless, this deal represents an interesting move for the new Maliki government, where a key question since December 2010 has been whether Maliki will lean more towards the Kurds or Iraqiyya in hammering out his policies. Based on the latest move by Maliki to attach the independent commissions to the government, one can start wondering whether he actually has a viable grand strategy at all. He can afford to alienate either the Kurds or Iraqiyya, but not both at the same time. This holds true for the oil sector as well.
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Maliki vs Shahristani?
Reidar Visser | Monday, 7 February 2011 15:08 at 15:08 | Categories: Iraqi constitutional issues, Oil in Iraq | URL: http://wp.me/pBkdV-C8
This is becoming somewhat farcical, but today the Iraqi deputy premier for oil and energy affairs, Hussein al-Shahristani, tells Reuters that the Iraqi premier, Nuri al-Maliki, was misquoted when he said the Kurdish contracts with foreign oil companies had been approved. Shahristani reiterates the argument that he has always made about the need for the central government to review the contracts before they are approved, even going as far as explicitly saying they need to be converted to technical service contracts (more similar to what is being used by the central government for oil contracts in the south).
It is rather remarkable for the deputy premier to contradict the premier on such a key issue, and the suggestion about a “misquote” does not quite make sense: Maliki was presenting an elaborate argument about the geological differences between Basra and Kurdistan and the interview included several comments which all went in the same direction. Surely no simple “misunderstanding” can assert itself in this way? Nonetheless, the refutation seems to reflect the prevailing mood in the Iraqi oil ministry, where Reuters reported astonishment and even disbelief during the weekend when the news of Maliki’s comments broke. No one, it was said, had heard anything.
So who is right and who is wrong? On the one hand, Shahristani himself has a record of recent misquotes, as when he allegedly said Iraq would reach an oil production of 4 million barrels per day at yearend – a figure which was promptly adjusted downwards by one million bpd by the oil ministry. But Maliki has also been acting strangely since the start of his second term. First, there was the seemingly suicidal attempt to alienate almost every force in Iraqi politics by attaching IHEC and other independent commissions to the executive, which just weeks ago brought about an alliance of critics reminiscent of the opposition Maliki was facing in early 2010 at the time of the budget. And then there was this latest episode involving the Kurdish oil deals, in which Maliki seemed to abruptly give up his pretensions to keep Baghdad as the ultimate power broker as far as the energy sector is concerned.
Perhaps what we are seeing is Maliki’s old tendency of turning to the Kurds in times of trouble, which was evident already in autumn 2009. If that is the case, the key question is how many members of his own Shiite alliance are willing to follow him in that direction, and how far are they willing to go when it comes to making concessions to the Kurds on issues like oil, energy and generally enshrining the kind of quota-based, ethnicity-oriented political system that the Kurds are seeking. The latest move by Maliki was surprising in that it seemed to indicate that Shiite attempts to assert a centralist policy in energy questions were dead; Shahristani’s response today suggest that the centralist/nationalist element in the National Alliance, which also includes Sadrist and Turkmen components, is still there and at least is putting up some kind of resistance. Alongside Maliki and Shahristani, a third force to watch for is erstwhile Daawa member Ibrahim al-Jaafari, now parliamentary head of the National Alliance bloc, who is cutting a dominant figure both in parliament and in NA meetings, sometimes at the expense of Maliki himself.
2.Reidar Visser said
Monday, 7 February 2011 15:31 at 15:31
Yeah, as far as I remember I saw a report that the Kurds had won the leadership of the secret services and that Chalabi was still being talked about as a potential interior minister so who knows. The remarkable thing is that Iraqiyya is reportedly seeking the good offices of Barzani over the strategic policy council which is somewhat ironic in this context since they and Shahristani ostensibly agree on the need to have a minimum of central oil ministry coordination in the energy sector. It’s just another side effect of the poor personal relationship between Allawi and Maliki. They’re supposed to have another “summit” soon but sources close to Maliki said no date has been set so far.
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