ARTICLE: "Iraqis Near Deal on Distribution of Oil Revenues by Population," by Edward Wong, New York Times, 9 December 2006.
Previous deal said central gov got all revenue to distribute from existing fields, but future ones left to individual groups (Kurds, Sunnis, Shiia). That had the Kurds pushing hard to attract their own FDI into the industry. Yes, it would have come, but it will come much faster if outside companies feel like they're not walking into a Balkans-like situation (we seem to be doing the Balkans backwards--as in, take down the dictator and then let the genocidal clashes begin that complete the separation).
But this law could hold Iraq together just enough for the natural splitting up of the nation along sectarian lines to both unfold and yet not prove fatal to the state.
BAGHDAD, Dec. 8 — Iraqi officials are near agreement on a national oil law that would give the central government the power to distribute current and future oil revenues to the provinces or regions, based on their population, Iraqi and American officials say.If enacted, the measure, drafted by a committee of politicians and ministers, could help resolve a highly divisive issue that has consistently blocked efforts to reconcile the country’s feuding ethnic and sectarian factions. Sunni Arabs, who lead the insurgency, have opposed the idea of regional autonomy for fear that they would be deprived of a fair share of the country’s oil wealth, which is concentrated in the Shiite south and Kurdish north.
The Iraq Study Group report stressed that an oil law guaranteeing an equitable distribution of revenues was crucial to the process of national reconciliation, and thus to ending the war.
Without such a law, it would also be impossible for Iraq to attract the foreign investment it desperately needs to bolster its oil industry.
So long as the sectarian violence flares, there will be a natural tendency for the three groups to pull apart, especially the two stable ones (Kurds, Shiia) from the one unstable one (Sunni triangle). But this law may just be enough to help give the central government just enough reason to remain relevant in the meantime that, as things settle down over time, Iraq can survive the inevitable bloodletting that comes after you take the dictator down who had held the nation together through institutionalized violence.
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