Saturday, August 13, 2005

Tentative Deal on Oil

NYT reported Iraq's leaders said Friday that they had reached a tentative deal to divide the country's vast oil wealth between the central government and the provinces, a potentially significant break in the negotiations over a new constitution. Under the agreement, oil revenue would be shared by the central government and Iraq's 18 provinces, and split roughly according to their populations.

This is a good thing. The Kurds in the North and the Shiites in the south have most of the oil, and if they had been allowed to retain that oil revenue in "autonomous regions" it would have make it more likely that Iraq would split into three countries, and that there would have been civil war between them. This move makes that much less likely, and it makes it more likely that the Sunnis in the middle will approve the Constitution.
It was unclear which entity would control the money, though one Iraqi leader said it would be the central government. "The agreement is that the distribution would be under the control of the federal government," said the leader, Saleh Mutlak, a member of the committee charged with writing the constitution. If it holds, the deal will constitute a major advance in the effort to complete a constitution. The control of oil revenue, which provides the bulk of Iraq's income, could significantly strengthen the hand of the central government over the regions, like Kurdistan and southern Iraq, that are pushing for greater self-rule. Most of Iraq's oil is concentrated in fields well to the south and north, raising fears, especially among the Sunni Arab population, that the revenues will fall under the control of the Shiite Arabs and the Kurds. Until this week, Kurdish leaders were demanding that they keep at least 60 percent of the money earned from oil in their area, in the north. A Kurdish official said Friday that they had dropped that demand.

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