Iraq’s new egalitarian oil law offers hope for democracy, prosperity and peace

THE recent hydrocarbon law, approved after much wrangling by Iraq’s Council of Ministers, deserves a great deal more praise than it has received.

For one thing, it abolishes the economic rationale for dictatorship in Iraq. For another, it was arrived at by a process of parley and bargain that, while still in its infancy, demonstrates the possibility of a co-operative future. For another, it shames the oil policy of Iraq’s neighbours and reinforces the idea that a democracy in Baghdad could still teach a few regional lessons.

To illustrate my point by contrast: can you easily imagine the Saudi Government allocating oil revenues so as to give a fair share to the ground-down and despised Shi’ite workers who toil, for the most part, in the oilfields of the western region of the country?

Or picture the Shi’ite dictatorship in Iran giving a fair shake to the Arab-speaking area of Khuzestan, let alone to the 10% of Iranians who are Sunni and Kurdish?

To ask these questions is to answer them. Control over the production and distribution of oil is the decisive factor in defining who rules whom in the Middle East.

The Saddam Hussein dictatorship, with its record of mass murder of Shi’ites and Kurds, can be explained partly by a Ba’athist ideology that subordinated everything to the leader and to the State. But I would argue that it was also determined by an economic imperative. The Sunni minority, and especially the Tikriti minority within that, lived in areas of Iraq where oil was relatively scarce. In order for it to exert control over the country’s chief national resource, it had by definition to act as an almost colonial power in the Kurdish and Shi’ite provinces, with results that are well known. (It also had to invade and annex Kuwait to make up the huge self-inflicted deficit created by its invasion of Khuzestan.)

But there is, in fact, more than enough oil for everybody in Iraq. And important new fields are being prospected all the time, most notably and recently in the Anbar province where al-Qaida forces have been making their strongest challenge. Here, as across much of the rest of the country, the visitor stands amazed at the abject poverty and misery of people who live in potentially one of the richest countries on Earth.

Iraq has the third-largest oil reserves of any nation.

Its oil is of purer quality, and nearer to the surface, than many of its rivals. A dusty and hopeless city like today’s Basra could be, as one minister told me last December in Baghdad, “as rich as Kuwait in five years”. The new law proposes a federalised control over oil and gas, with a distribution of revenue that would be in proportion to the population of each province. To put it another way: the very element that greased the weaponry of dictatorship and aggression could, with a certain amount of nurturing, become the economic basis of a federal democracy.

I must say that it sounds worth trying.

On the left, and in the anti-war camp, the very mention of the word “oil” is usually considered profane: a Brechtian clue to the secret designs of neo-conservatives. So I was interested to see Christian Parenti, a staunch foe of the Bush policy in Iraq, saying in the March 19 issue of The Nation, a US weekly political journal, that “on key questions of foreign investment and regional decentralisation versus centralised control, the law is vague but not all bad”.

What have Iraqis got to lose? It’s not as if a withdrawal of foreign investment would leave the oil as a trusteeship for the people.

Remember that Iraq under Saddam had already seen the most extreme form of “privatisation”, with the whole industry a private fiefdom of a parasitic elite. Remember that the Ba’ath- ists used the Oil for Food programme to sow corruption throughout the UN.

Nonetheless, a principle is being established that does great credit to the Iraqis who signed it.

This consideration might even influence the current debate about an “exit strategy”.

One would like to know, of those who advocate leaving Iraq, whether they are happy to abandon the control of its fabulous wealth to be parcelled out between the highest or most ruthless bidders?

Or might it be better to have an imperfect federal democracy that could be based not just on ideals but on an actual material footing? A country that might, over time, undercut the power currently exerted by Saudi Arabia and Iran? And it’s no good chanting “no blood for oil” at me, because oil is the lifeblood here, and everybody knows it and always has.