As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Friday, March 02, 2007

About the OIl

Earlier this week Iraq's government actually got something done, coming together around the only thing that can unite - money, bushels and bushels of money. And really, this is the same kind of "opening up the country's market" stuff that we've seen crush other nations and put them in near-total servitude to corporate hegemony:

Iraq's government has agreed on a plan to divide the country's oil wealth and open the industry to international investment, a move seen as necessary to a political settlement of the nearly four-year-old war, ministers announced Monday.

"This law will guarantee for Iraqis -- not just now, but for future generations, too -- complete national control over this natural wealth," Oil Minister Hussain al-Shahristani told reporters at a Baghdad news conference [...]

"This law affirms ... all the revenues will be shared at the federal level and redistributed equitably among all Iraqis," Deputy Prime Minister Barham Salih told CNN.

Deciding how to distribute the proceeds of the country's oil industry was a key political benchmark laid out by U.S. officials trying to broker a settlement of the country's political differences.

"This is the first time since 2003 that all major Iraqi communities have come together on a defining piece of legislation," said Zalmay Khalilzad, the outgoing U.S. ambassador in Baghdad. "This law is a major pillar of a national compact among Iraqis."

And of course, that sounds good, until you read the fine print. And unfortunately for the corporations, it appears that some Iraqis have.

Barely two days have passed since Iraq's Prime Minister Nouri al-Maliki hailed the country's new petroleum law as a "solid base for unity of all Iraqis" — a rare boast these days. President Bush has also trumpeted it as proof that Iraq has a viable future. But parliamentarians and Iraq's oil unions have already begun mobilizing against the draft legislation, arguing that it is a desperate attempt by al-Maliki's government to satisfy Western demands, which could damage Iraq's economic future and speed the country's ultimate disintegration [...]

Under the new law, agreed on Monday by Iraq's cabinet, foreign oil companies will be allowed to cut long-term exploration and development deals with the government for 20 years, renewable for a further five years. Companies willing to operate in a country with high physical risks — insurgents regularly blow up pipelines and kill contractors — will be allowed to export their oil after paying the government a minimum 12.5% royalty, although there are usually also cash signing bonuses to the government, and most "profit oil," extracted after operating costs are met, would likely go to Baghdad. Regional governments — only Kurdistan has one right now — can sign their own contracts under the law, a dizzying change from decades when Saddam dictated the terms and stifled oil production in Kurdistan. A Baghdad-based Federal Council on Oil & Gas will be formed; it will have 60 days to appoint a team to arbitrate a contract, if it has strong concerns.

Despite the grumbling from politicians, it is still unclear whether opposition to the law is strong enough to kill it. Among the parliamentarians arguing against the law are Moqtada al-Sadr's bloc, which fears that foreign oil companies will move into Iraq in force, and stay long after U.S. soldiers have left. But logistically they will have to race back to Baghdad to vote against it. Many parliamentarians, like al-Mutlaq, spend much of their time outside Iraq — al-Sadr himself is frequently in Iran. "I'm going back for this very reason," al-Mutlaq says. "We cannot yet figure out how many people will stand against it." He says he is certain he will find allies among his colleagues, who he says believe that the law is geared to the needs of Western oil companies rather than Iraqis. There has been no public hearing on the draft, whose details have largely been kept secret. Iraqi lawmakers fumed last July when U.S. Energy Secretary Samuel Bodman discussed the draft during a trip to the region, "when hardly a single parliamentarian had seen it," says Kamil Mahdi, an Iraqi who is senior lecturer in Middle East economics at the University of Exeter in Britain, and who spent Tuesday discussing the law by phone with several parliamentarians. He said several believe that the government should wait until the war ends before locking Iraq into long-term deals with foreigners, he says. "This draft is totally out of synch with any notion of the interests of Iraq," he says.

And who knew this, but Iraq has oil unions, and they're the strongest voices of opposition to this new law. Since their members are the ones who, you know, actually get the oil out of the ground, I would say this may have an impact.

In one sense this is about Iraqis who are tired of seeing American interests trump their own. But really this is the same grassroots resistance to globalization we have seen since the late 1990s. The whole world has seen the lessons over the past 40 years, where corporations come into the developing world, open their markets, practically enslave their people, and take out all the natural resources (and all the profit) for themselves. The reason Latin America and many other countries have this streak of what is called "anti-Americanism" here is not a foreign policy issue, it's an economic one. Simply put, the Iraqi people don't want their oil stolen from them by multinationals. They don't want to end up like Nigeria. I question the motives of groups like al-Sadr's (who probably want to minimize the amount of oil wealth they must share with the Sunnis), but the language they're using is undoubtedly very appealing to the Iraqi in the street.

Whether they'll succeed is another matter. It may not be that the whole war was fought to open up these oil markets, but as long as we're there, I'm sure the White House considers it a pretty important thing to get done. At some point the bombs will stop dropping and there has to be another way to make money off of Iraq. They've clearly got Maliki in the tank, as he probably knows that upsetting the Americans will cause his government to collapse. It'll be interesting to see if they can ramrod this through the Parliament, which frequently doesn't even show up to meet. Stay tuned.

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