March 1, 2007

Bullish On The Iraqis

I have a new essay up at, a project of the American Enterprise Institute, about the new agreement on oil revenue in Iraq. The agreement opens the door to eventual reconciliation and a success for the US in the Middle East:

With most of American politics focused on the troop surge and partisan maneuverings over its implementation, another story has gotten lost: The Iraqis themselves have made important progress in a basic economic issue that has fueled the sectarian divide. ...

Over the past three years, the politicians were unable to settle on an equitable and secure revenue-sharing plan that still allowed the Kurds and the Shi’ites to manage their own resources. But now things have changed. The Kurds, who had held out the longest, agreed to share their oil revenues on a basis that had already won support from the Shi’ites and the Sunnis. Two days later, the Iraqi cabinet approved the deal, and the Iraqi Parliament will likely vote it into law.

Does this address the fundamental differences that have produced dissent and Sunni insecurity in the past? It appears to. It takes the collection of oil revenues out of the hands of regional governments and invests it into the central government. The Sunnis may not control the central government any longer, but they have more representation in Baghdad than in Basra or Kirkuk. They also won central government oversight over oil contracts, ensuring that oil revenues could not be hidden or controlled by the regions. This turned out to be one of the major stumbling blocks, with the Kurds insistent that Baghdad not be allowed to force contracts on the regions or require approval from national bureaucrats. Instead, the parties agreed to give the national government the power to “prevent” contracts from being executed, a bit of wordsmithing that allowed the Kurds to acquiesce.

I've written about this a few times over the last week, but allowed me to pull all my thoughts together into one place. Be sure to read it all.


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