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Sunday, January 29, 2006

Iraq's Power Vacuum

Paul Krugman writes in the New York Times about past mistakes of the American post-war administration of Iraq and relates it to the implications of Bush pulling funding from all reconstruction projects. You can read the full article for free here.

He gives reasons for how Iraq is still not able to produce enough electricity:

Most notably, during the period when Iraq was run by U.S. officials, they decided to base their electricity plan on natural gas: in order to boost electrical output, American companies were hired to install gas-fired generators in power plants across Iraq. But, as The Los Angeles Times explains, "pipelines needed to transport the gas" - that is, to supply gas to the new generators - "weren't built because Iraq's Oil Ministry, with U.S. encouragement, concentrated instead on boosting oil production." Whoops.

and goes on to quote Muhsin Shlash, Iraq's electricity minister, to explains how America is pulling reconstruction funds and how Iraq will is unable to improve Electricity on its own:

"The American donation is almost finished," [Shlash] said, "and it was not that effective." Yet he also emphasized the obvious: partly because of the similar failure of reconstruction in the oil sector, Iraq's government doesn't have the funds to do much power plant construction. In fact, it will be hard pressed to maintain the capacity it has, and protect that capacity from insurgent attacks.

So we have a perfect mess. Iraq barely has the money to keep an already poor electricity supply in operation yet needs that electricity in order to improve security and generate more money. America is showing little inclination to help.

At times like you need to have strong leadership and effective (sometimes unpopular) decision-making. Maybe the Iraqi government can do something about it? I dont think so. Even if the new Iraqi parliament is able get its act together quickly and appoint a government there will still be several major obstacles that will not be easily overcome:

1. Iraq is effectively bankrupt. There is no money to cover security and rebuilding infrastructure, a deteriorating situation and no money to dig its way out. What remains of income from oil is lost on security or paying other countries for refining and other services that Iraq can not do because of its shattered infrastructure. Already Iraq is having trouble paying $1 Billion debts to Turkey for refining oil. What next?

2. The elected parties are mostly sectarian - there is little to unite them and much to encourage any dissenting sect to start its own insurgency. Just take the example of how sectarian militias have been allowed to thrive in Iraq. If the government placates one insurgent group, another will easily take its place. Security costs will not go down any time soon.

3. All new oil discoveries have already been franchised out to the regions by agreement in the constitution. There is no source of new oil money coming to the government.

4. Above all else the constitution all but guarantees a stalemate in government. It requires a two-thirds majority in many of its most important decisions, and all decisions must be agreed by a 'presidential council' of three, unanimously. Anything contentious will simply not pass through.

Iraq's major political forces are out of action. The government is bankrupt and unable to act. The Shi'a have thrown their lot in with this government and are forced to defend a failed enterprise. The Baathists threw their weight behind the insurgency and are reduced to assassinations and bombing. The Iraq Communist Party has disappeared as a force in Iraq. Hence no one is in control of the country - hence a vacuum.

As I warned before a power vacuum will create a spiralling civil war as security breaks down. It will also draw-in neighboring countries - Turkey, Saudi Arabia, Iran, Jordan and spark a war on top of the world oil reserves. This is something the world economy cannot afford to allow at all costs.

The solution must be Iraqi. All patriotic forces and politicians would do well to accept that the current constitution, the American plan as well as the Baathist plan of reinstating the old order are failed enterprises that will never work. Iraq needs a new government of reconstruction one that will nationalise the oil wealth and use it to rebuild the country. One that can build a police force free of the sectarian militias and an army that is only loyal to the country not to foriegn troops. This goes against the bottom line of the Americans but it will be popular within Iraq and this is the only way to create a stabile country and prevent the situation spiralling into an international war.


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