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January 8, 2006
Iraq Short Of Oil?
By: Rowan Wolf
There is an interesting phenomena occurring in Iraq. People are really ticked off. No, it's not about the "insurgency," or even about U.S. presence in Iraq (at least not directly). It is because of the dramatic increase in the cost of oil and natural gas. Why would the nation with the third largest confirmed global reserves of oil be struggling with oil prices? Why would there be long lines and shortages? One might assume that it is because of the ongoing disruption of refineries and pipelines as they come under attack. That certainly doesn't help the situation, but it is not causing it. No, the proximal cause is the International Monetary Fund.
Iraq has had to turn to the IMF to take out an $11 billion loan to pay for debts of the Hussein regime. Of course the need for that loan surely has nothing to do with Bush canceling $18.4 billion in reconstruction funds. Nor with the privatization of Iraq's oil that came under the U.S. invasion.
The Minister for Oil, Ibrahim Bahr al-Ulum, blew the whistle on the plan to dramatically increase oil costs. He got sacked and replaced by Rumsfeld's "old friend" Chalabi - yes that one. In the typical IMF structural adjustment program, "In return for the loan, Iraq agreed to reduce its oil subsidies, improve the efficiency and transparency of public financial management, and develop a comprehensive restructuring strategy for its state-owned banks."
In other words, the proceeds of Iraq oil was no longer for Iraqi's, and while we are at it let those foreign banks take over your banking system.
The free people of Iraq are protesting the increases. And, like all democratic governments, the Iraqi police killed two of the protesters. I'm sure that the 300% arbitrary increase in prices in a country with roughly 50% unemployment, should not have gotten people ticked off.
Things are not always what one would assume.
Related article
12/31/05 Oppel, NY Times, Minister goes in Iraq oil crisis
1/02/06 BBC, Iraq oil exports hit post-war low
Posted by Rowan at January 8, 2006 12:09 AM Category: Peak Oil --- Social Implications