Leadership Council for Human Rights

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Wednesday, April 12, 2006

The Role of Oil in Iraqi Politics

April 11, 2006

Washington D.C – The Wilson Center welcomed Yahia Said, Director of Iraq Revenue Watch Initiative at the Open Society Institute and a Research Fellow at the Centre for the Study of Global Governance of the London School of Economics to discuss the role of oil in Iraqi politics.

“What has dominated the news the past months has been the compositional resources,” Said began. He said that he had been in meetings for the last week to discuss what could be done in Iraq regarding its oil supply. These sessions included a variety of people, from policymakers to ordinary civilian Iraqis, and were designed to alleviate growing tensions about who will control the country’s oil.

Said raised the difficulties which would arise from the different ways of governing Iraq’s oil. Since the Iraqi constitution has created a decentralized state, control of the oil would be divided between each province. The Iraqi federalists are very pro-constitution, and some compromises were made during the meetings, he said.

There is a sharp divide between those who want petroleum to be ruled by federal authorities and those who want it to be controlled by regional authorities. Today 90% of the Iraqi budget comes from oil revenues, which explains the perceived need for some federal control. Said said that others believe it would be good to separate the oil industry from politics for the sake of government transparency.

Said added that there have been talks about equalizing oil prices with those of neighboring countries, and also about subsidizing all the Iraqi oil revenues. Said also said that people think that Iraq should take in less foreign investors, but in fact Iraq really needs foreign investment for the country’s reconstruction efforts.

The question was raised from the audience whether the tribes within Iraq could be the ones to protect pipelines and the oil; Said answered that such a system had been tested before but it did not work out as hoped. He said that in the end the tribes started to pressure their own interests. He also said that Iraq lost $18 Billion last year through oil smuggling.

Said answered a question about privatization of the oil, saying that there are three or four oil companies and if privatization happened Iraq would become very dependent on them. Today those few entities oversee 94% of all the oil within the country.


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