* Tenmillion ~ HCL Report ~ 01/28/2012
January 25, 2012
This report (Iraq’s Oil Politics – Where Agreement Might Be Found, Sean Kane) details the hydrocarbon Law and revenue sharing issue between the Sunnis, Shia, and the Kurds. The author not only explains the oil contracting and revenue sharing issues between these three groups and the Iraqi government , but also explains the Sunni anxiety concerning the Iraqi constitution and regional powers.
Below, I pulled out some interesting excerpts from the report. The link to the full report is at the bottom of page.
Tenmillion~
Among many Arabs, particularly within the Sunni community, oil and natural resource management is perceived as being intimately related to the territorial integrity of Iraq and the key factor in determining whether the country stays together. Kurdish achievement of regional control over oil resources in the constitution is therefore perceived as a threat to Iraq itself. This is not only because Kurdish control over oil reserves could provide the financial basis for future Kurdish independence, but also because it could set a precedent for oil-rich regions in Iraq’s south. An Iraqi central government without control over its northern or its southern oil would be no government at all. In this respect, substantial resentment has developed against Iraqi Kurds, who are seen by some Sunni Arabs as having sought to take advantage of the weakness of Baghdad during the post-2003 maelstrom not just to secure their own autonomy but also to undermine the viability of Iraq as a whole.
Kurdish Region and the Iraqi Constitution
Kurdish achievement of regional control over oil resources in the constitution is therefore perceived as a threat to Iraq itself. This is not only because Kurdish control over oil reserves could provide the financial basis for future Kurdish independence, but also because it could set a precedent for oil-rich regions in Iraq’s south.
As Sunni groups have entered the political process, symbolically beginning with their almost unanimous rejection of the constitution in the October 2005 referendum, they have sought to reopen questions regarding Iraq’s political configuration and the extent to which power should be decentralized.10 The handling of oil has been at the forefront of this effort.For the majority of the post-2003 period, the KRG, traumatized by its past and perceiving the constitution as guaranteeing its future, has been resolutely opposed to constitutional amendments. (P. 21)
Where do the Sunnis fit in?
The Sunni attachment to a centralized state is also connected to a strong sense of Arab nationalism, in which Sunnis see their community as the natural steward and defender of a united Iraq.7 Given the relative paucity of proven oil reserves in the Sunni-majority western areas of Iraq, Sunnis’ identity-based suspicions toward federalism and decentralization are also buttressed by practical economic concerns. (page 7)
Given that the unequal geographic distribution of hydrocarbons around the country is overlaid upon Iraq’s ethnic and sectarian divisions, this fair sharing is also arguably critical to social peace. A stable oil-revenue-sharing agreement is therefore essential to Iraq’s stability and at the heart of determining what type of country it will be.
In fact, some Sunnis even privately opposed the hydrocarbon law, fearing it would further entrench a decentralized structure for the Iraqi state. U.S. officials did not appear to fully understand the reasons for Sunni ambivalence, sometimes displaying open frustration that Sunnis did not understand that the draft hydrocarbon law was going to benefit their community by dropping the distinction between present and future oil fields. However, as described, many Sunnis questioned the value of a national hydrocarbon law, however positive its contents, if it could be later overridden by the Kurdistan Region. (P.13)
The Kurds
The strategic importance of revenue sharing from a negotiation standpoint goes beyond its intrinsic political and economic importance and relates to its potential for compromise. This is because oil-revenue sharing, as distinct from oil contracting and management, is a possible exception to the Kurdish conception of how Iraq should work. The reason for this is Kurdish financial self-interest. Like the rest of Iraq, the KRG has limited nonoil revenues and large social-safety-net, civil service, and security-force-wage bills it must pay.25 At the same time, the KRG is almost entirely funded by annual transfers of $5–6 billion from the national budget,26 which is itself principally financed by oil production from outside of the Kurdistan Region.
The * Tenmillion ~ HCL Report ~ 01/28/2012 by Dinar Daddy's Tidbits, unless otherwise expressly stated, is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.
Comments
-
-
Follow Dinar Daddy
-
-
Currency Converter Powered by Forex pros - The Forex Portal -
