Thread: Archive Latest News - Think Tank - 01/01/08 - 14/04/08

Turkey's trade with Iraq to exceed $10 bln

Trade volume between Turkey and Iraq will probably exceed 10 billion U.S. dollars as of next year, Ercument Aksoy, chairman of Turkish-Iraqi Business Council, said on Sunday.

In an interview with A.A correspondent, Aksoy said commercial relations between Turkey and Iraq would revive as of next year. "Trade volume with Iraq will exceed 10 billion U.S. dollars as of 2009, because important tenders will be held," he stated.

Aksoy quoted Iraqi President Jalal Talabani as saying that "a new page" opened in the relations between the two countries and they would extend assistance to Turkish businessmen.

Turkish State Minister Kursad Tuzmen had said Saturday that Turkey targeted a 20 billion USD trade volume with Iraq by the end of the next 2 years. Tuzmen held talks with Iraqi Minister of Oil Husayn al-Shahristani and an accompanying delegation in Ankara. "We expect the bilateral trade volume to reach 6 billion USD in 2008," Tuzmen said during the meeting.

Tuzmen said the "3rd International Iraq Fair", which would be organized jointly with the Iraqi Ministry of Trade, would be held in southeastern province of Gaziantep between May 22nd and 25th, with the participation of Iraqi ministers and high-level bureaucrats. Moreover, Tuzmen said Turkey planned to sign a free trade agreement with Iraq.

''Energy sector was a major element of the strategic cooperation vision between the two countries'', Tuzmen added. ''Development of natural gas sites in Iraq, sale of the natural gas to be produced at those sites to Turkey and transport of such gas to Europe through Turkey were other issues with priority'', Tuzmen said expressing the importance of Kirkuk-Yumurtalik Oil Pipeline within this context.

Meanwhile, Iraqi Minister Shahristani said that Iraq aimed to provide Turkey the oil and natural gas it needed. "We want Turkey to be the transit country for the export of Iraqi oil and natural gas to Europe," he said. Shahristani also invited Turkish entrepreneurs to construct power plants in Iraq. "Turkey, especially through TPIC (Turkish Petroleum International Company Ltd.), can establish oil refineries anywhere it desires in Iraq," he added.

Turkey's trade with Iraq to exceed $10 bln | Iraq Updates

Slight drop in demand for dollar in daily auction

Demand for the dollar slightly dropped in the Iraqi Central Bank's auction on Monday, registering at $106.930 million compared to $114.250 million on Sunday.

"The demand hit $19.870 million in cash and $87.060 million in money transfers outside the country, all covered by the bank at a rate of 1,209 Iraqi dinars per dollar, a tick lower than yesterday," according to the central bank's daily bulletin and received by Aswat al-Iraq - Voices of Iraq - (VOI).

The 13 banks that participated in the auction offered to sell $10.400 million, which the bank bought at an exchange rate of 1,207 Iraqi dinars per dollar.

Speaking to VOI, Ali al-Yasseri, a trader, said that foreign transfers still high in today's session sending the overall size of demand up, but he expected a drop in the demand over the forthcoming sessions this week.
The Iraqi Central Bank runs a daily auction from Sunday to Thursday.

Aswat Aliraq

PM ponders patching up Govt. – spokesman

Iraqi Prime Minister Nouri al-Maliki is "seriously" considering the option of patching up his government by filling vacant portfolios with figures from outside the blocs that quit his cabinet, an official government spokesman said.

"There are great differences in views among the political blocs that encumbered the return of the ministers from withdrawing blocs, which prompt some officials to openly state that these differences still exist," Ali al-Dabbagh said in statements published by the Saudi edition of Asharq al-Awsat newspaper on Monday.

Dabbagh's statements came in reply to remarks by Vice President Tareq al-Hashimi on Sunday in which he said that differences with Maliki "still exist."

Hashimi had said in an interview with an Arab satellite channel that the differences with Maliki "were not personal. They have to do today with a national political stand calling for reform."

"The recent meetings between the government's representatives and members of the (Sunni) Iraqi Accordance Front bloc were not fruitful as to bring the two sides' views closer," Hashimi, a leading member of the IAF, said.

The government and the IAF had announced the commencement of talks aimed at means to bridge the gap between the two sides and speed up the IAF's return to the coalition government of Nouri al-Maliki, which suffered repeated withdrawals by influential blocs.

Dabbagh explained that some want to have certain conditions like changing the government's platform and having wider sharing in the decision-making process as far as security was concerned.

"These matters, however, go beyond the prime minister's constitutional powers," Dabbagh said.

"The effort is now inclined towards filling the gaps in the incumbent government with independent ministers from outside the quitting blocs," said Dabbagh.

He noted that the quitting blocs were given enough time to have them back but their insistence on certain "exaggerated" demands makes it hard to have them re-join the government lineup.

The Maliki government is composed of 37 ministries, five of them are state ministries, and distributed over the UIC, the largest bloc in the Iraqi parliament with 83 out of a total 275 seats, the Kurdistan Coalition (55 seats) and the IAF, which had 35 seats before its withdrawal in 2007 along with the ministers of the Sadrist bloc, or Iraqis loyal to Shiite leader Muqtada al-Sadr (30 seats) and the INL (21 seats).

The IAF had quit its five ministers and deputy premier from Maliki's government in August 2007, linking its return to have demands, including the release of detainees from Iraqi jails, met.

Aswat Aliraq

Iraq and Turkey to Have Strong Economy Partnership

Kursad Tozmen, the undersecretary of the Turkish Trade Ministry emphasized, after discussions with Hussein al-Shahristani the Iraqi Oil Minister, that both countries will sign an agreement to have a stronger economic partnership in the near future.

Kursad Tozmen, in a press statement said “The aim of this agreement is to create economic fusion between both countries and Turkey’s main concern is to invest in Iraqi gas fields development to export and transfer gas to Europe.”

On the other hand, Helmi Guler, the Turkish Minster of Energy talked about plans to build another pipeline to transfer Iraqi oil from Kirkuk to Yumurtalik (free trade zone) in the south of Turkey.

http://pukmedia.com/english/index.ph...=3651&Itemid=1

Kurdistan to ratify constitution soon – Kurdish official

Speaker of Iraq’s Kurdistan region Adnan al-Mufti said on Monday that the parliament will ratify the region’s constitution and other important laws during the current legislative term.

“There are several laws that need to be discussed and approved, mainly the region’s constitution draft law,” al-Mufti said in his work opening the new legislative term.

“There are other important issues wait to be discussed; financial supervision, the higher education law, the environment protection law, the journalistic work law,” he added.

The session was attended by Kurdish President Massoud al-Barazani, Iraqi Parliament Speaker Mahmoud al-Mashhadani, his deputy Khaled al-Attiya and other senior lawmakers, who arrived in Arbil to attend the Arab parliamentary Union meetings, due on Tuesday for three days.

Aswat Aliraq

Update.......

Iraq confirms China Ahdab oil field talks

The Ministry of Oil says it has revived talks with the China National Petroleum Corporation (CNPC) over a deal to develop the Ahdab oil field.

A ministry source, who did not wish to reveal his name, said the talks have reached “an important stage” and should be finalized in April.

He said negotiations have so far centered on the terms of the deal the CNPC had signed with the former regime.

The deal could not be implemented due to U.N. trade sanctions which have been lifted in the aftermath of the 2003 U.S. invasion.

The source said no major changes were expected to be introduced to the original deal under which China would have recouped its $1.2 billion investment through a production sharing agreement.

The Chinese estimate that the field could produce an average of 115,000 barrels a day over more than 20 years. Its proven reserves are estimated at 1.4 billion barrels.

Azzaman in English

KRG Discusses Steps of Implementing Article 140

Mr. Nichervan Barzani headed a KRG meeting to discuss the measures and activities of the Committee of Article 140 of Iraqi Constitution. The meeting was also attended by Mr. Omer Fatah, the KRG Deputy PM and Dr. Muhammad Ihsan, the KRG Minister of Extra-Regional affairs.
The meeting clarified the sections of Article 140 and the work of the committees in order to implement it. They also discussed the KRG collaboration and support, which led to solve the committee’s obstacles.

http://pukmedia.com/english/index.ph...=3657&Itemid=1

New call for Iraq Oil Cash Audit

The Democratic Party chairman Senator Carl Levin and Republican former chairman of the Senate Armed Services Committee Senator John Warner have asked US government auditors to determine what Iraq is doing with the billions of dollars in oil revenue it generates.

"We believe that it has been overwhelmingly US taxpayer money that has funded Iraq reconstruction over the last five years, despite Iraq earnings billions of dollars in oil revenue over that time period that have ended up in non-Iraqi banks," the senators said in a letter sent to the head of the Government Accountability Office (GAO).

"At the same time, our conversations with both Iraqis and Americans during our frequent visits to Iraq, as well as official government and unofficial media reports, have convinced us that the Iraqi government is not doing nearly enough to provide essential services and improve the quality of life of its citizens," they said.

The senators estimated that Iraq will realise "at least $100 billion in oil revenues in 2007 and 2008", an Associated Press report said.

They asked specifically that the GAO determine:

• Estimated oil revenues from 2003-2007.
• How much the US and Iraq each have spent annually during that period on training, equipping and supporting Iraqi security forces as well as reconstruction, governance and economic development.
• How much the US and Iraq each have spent annually during that period on training, equipping and supporting Iraqi security forces as well as reconstruction, governance and economic development.
• Projected oil revenue and spending for 2008.
• The amount of unspent revenue from 2003 to 2007 and the expected estimate at the end of 2008.
• How much money the Iraqi government has deposited and in which banks.
• Why the Iraq government has not spent more of its oil revenue on its own country.

In a report released in january, the GAO concluded that the Bush administration used questionable financial data to assert that the Baghdad government was making progress in managing its budget.

The study focused specifically on whether Iraqis were spending money for infrastructure needed to boost the country's lagging economic growth and to improve poor public services.

The administration reported in September last year that Iraq's central government ministries had spent 24% of their 2007 capital projects budget as of 15 July 2007.

"This report is not consistent with Iraq's official expenditure reports" which show that the central ministries had spent only 4.4% of their investment budget as of August, the GAO said. It said capital projects are 90% of Iraq's investment budget.

The benchmark report submitted by the administration was ordered by Congress to measure Baghdad's progress in 18 areas including political and economic activities. It was aimed at judging whether Iraqis were working hard enough at reconciliation and other issues to warrant continued American support.

Iraqis have been slow to execute their capital budgets partly because violence and sectarian strife have reduced the number of contractors willing to bid on projects, the GAO said in January. Also, their procurement and accounting systems are weak and many professionals and skilled workers have fled the country, the GAO report added.

The January report recommended that the Treasury Department work to improve its "ability to report accurate and reliable expenditure data from the ministries and provinces" in Iraq.

http://www.upstreamonline.com/live/article150335.ece

Oil and Electricity Ministries won't mix

Lack of electricity is still a big problem in Iraq, and there's lots of blame to go around. Much of it goes to the usual suspects: too many insurgent attacks, too few experienced engineers and technicians.

But there's another factor, big and getting bigger, which you probably haven't read about. It's one that Prime Minister Nuri Kamal al-Maliki and his bureaucrats could solve quickly, if they wanted to: Iraq's Ministries of Oil and Electricity are at loggerheads.

While they bicker, Iraqis seethe. During a cold snap this January, I spent a morning interviewing people on the streets of Falluja. Over and over again, I heard variations on two basic themes: appreciation that the coalition had driven the insurgents out of town, and anger over the inability of their government, with American assistance, to provide them with more than an hour or two of electricity each day.

The number of hours may vary, but much the same complaint can be heard just about anywhere in Iraq. Electricity remains a scarce commodity, even though more than $6 billion, mostly in American money, has been devoted to improving supply.

From an encouraging peak of 5,530 megawatts last July 11, typical daily peaks have slipped back to around 4,500 megawatts, according to a recent report by the Special Inspector General for Iraq Reconstruction. That's only about 500 megawatts more than what it was shortly after the start of reconstruction five years ago - before the completion of thousands of American-supported projects. Summer peak demand will be at least 11,000 megawatts, the U.S. State Department estimates.

While the insurgency is a major factor, the heart of the matter is that the oil and electricity ministries have coexisted uneasily ever since they were reconstituted by the Coalition Provisional Authority in 2003. To run its generating plants, the cash-starved Electricity Ministry must beg for whatever fuel the Oil Ministry can spare, while buying as much as it can from places like Kuwait. But charity isn't a priority for Iraq's Oil Ministry - quite the contrary.

Almost all of the Iraqi government's revenues come from oil exports. They totaled $39.8 billion last year, the government says, accounting for about 95 percent of its income. So it is not surprising that the oil minister, Hussain al-Shahristani, has been acting as though every barrel not exported is money wasted.

But that attitude, and the tacit approval of Maliki, is helping to prolong the economic, social and security quagmires that continue to afflict the country. All over Iraq, generating plants sit idle for lack of fuel. The State Department estimates that on a typical day about 1,500 megawatts of power, or one-third of the country's peak output, are unavailable because the Electricity Ministry cannot get enough fuel.

While the Oil Ministry swells the government coffers, hospitals, water-pumping stations and sewage systems function sporadically or not at all. And now countless Iraqis are preparing for yet another summer of sweltering nights and spoiling food.

The Oil Ministry's also refuses to pay for any oil-related projects that do not help the cause of exporting more crude oil. "The Oil Ministry has done zero projects to benefit electricity," an American diplomat in Baghdad told me. "They couldn't care less."

Reconstruction experts at the American Embassy in Baghdad told me of a dozen or so proposed oil projects that could make a big difference in the electricity supply. One is the renovation of the pipeline that brings crude from the southern oil fields to the Doura refinery in Baghdad, which is the nation's largest producer of kerosene and gasoline.

A branch of this pipeline also feeds the Musayyib power plant, south of the capital. Workers there are now finishing a $50 million structure, called a topping unit, to produce diesel fuel for 10 new turbine-generators. Unfortunately, the troubled project to buy and install those generators has dragged on for years and has cost American taxpayers more than $300 million so far. Only four of the generators are ready to operate, but even they sit idle for lack of fuel. A few more generators are expected to be ready in the next couple of months, but the pipeline still won't be capable of delivering enough crude oil for conversion into diesel at the topping unit to run the generators.

To allow this to happen, the pipeline would need an additional pumping station and some general refurbishing. The cost would be very small compared to the money already invested at Musayyib, or compared to alternative fueling schemes like bringing in diesel fuel in convoys of dozens of tanker trucks every day. But the Oil Ministry refuses to modernize the pipeline's pumping system because it wants the oil flowing south for export.

Meanwhile, at the big Qudas power station north of the capital, workers are adding two new generating units to the eight already installed. There's an old oil field literally across the street from Qudas that now pumps enough crude-oil distillate to supply three of the plant's generating units; the other units, however, rely on fuel being trucked in.

It would cost an estimated $50 million to rehabilitate enough of the fields' aging wells and equipment to supply enough an amount of crude, diesel and gas sufficient to fuel 7 of the 10 generating units that Qudas will soon have. Consultants from the American engineering firm Fluor estimate that, given the cost savings from no longer having to truck in the crude, the $50 million would be recouped in about a month. But, here, too, the Oil Ministry isn't interested. "They have no dog in that fight," an embassy official told me. "There's no way for them to make money out of it."

Perhaps the biggest waste of all in Iraq involves not oil but natural gas, an enormous resource that is literally squandered all the time. It comes out of the ground along with oil, and is simply burned off, or "flared," to prevent it from exploding. Yet several studies have concluded that if the gas from the southern oil fields alone were used to generate electricity, it could provide 4,100 megawatts, nearly doubling Iraq's total capacity.

Nevertheless, the Oil Ministry has pushed back on every Electricity Ministry proposal over the past five years aimed at capturing and delivering the gas to generating plants.

Not only the two ministries are at odds, their leaders are as well, American diplomats tell me. The oil minister, Shahristani, was trained as a chemical engineer, worked as a nuclear specialist and spent years in Saddam Hussein's prisons - but he had no experience in the oil industry before his appointment.

He is, however, well connected with the Supreme Council for the Islamic Revolution in Iraq, the country's dominant Shiite political party. Meanwhile, the electricity minister, Karim al-Hasan, holds a Ph.D. in electrical engineering and came up through the ranks of the ministry, which gives him great expertise but little political sway.

Efforts to bring coherence and compromise to Iraq's energy ministries have been sparse and fruitless. A multi-ministry "energy-fusion cell" was set up nearly a year ago to work with the Pentagon and State Department on an integrated energy plan, but this has gone nowhere.

One promising note: The Iraqi government's new agreement on sharing oil resources among regions apparently has language mandating that the government stop flaring its natural gas and start capturing and using it.

Iraq has some of the world's largest known oil reserves, but it spent nearly $1 billion - maybe twice that - importing refined oil products last year. That's not the only paradox. Iraqis are experiencing the unfortunate results of America's failure to anticipate the fuel requirements of the three dozen generating units it installed early during reconstruction.

Sadly, thanks to bureaucratic infighting and an obsession with export revenue, their own government is now on a path to institutionalize and perpetuate those energy problems indefinitely.

Oil and electricity ministries won't mix - International Herald Tribune

Debating Devolution in Iraq

(Reidar Visser is a research fellow at the Norwegian Institute of International Affairs and editor of the Iraq website Basra and Southern Iraq Analysis.)

In early August 2007, Jalal al-Din al-Saghir, a Shi‘i preacher affiliated with the Islamic Supreme Council of Iraq, made headlines with striking comments to a reporter for the Christian Science Monitor. The cleric revealed in an interview with Sam Dagher that “a massive operation” was underway to secure the establishment of a Shi‘i super-province in Iraq, to be named the “South of Baghdad Region,” and projected to encompass all nine majority-Shi‘i governorates south of the Iraqi capital. Saghir claimed that his party had already drafted detailed plans for how such a super-province would be governed -- plans of such importance to Iraq and the region that there was “no room for misadventures.”[1] While Saghir did not mention a timeline for this remarkable undertaking, other Supreme Council supporters of the idea were less reticent: “The Shiite federal region will be announced in April 2008,” wrote one enthusiastic proponent.[2]

The date was not chosen at random. April 2008 is the month when the law for implementing federalism -- adopted by the Iraqi parliament in October 2006 -- comes into effect. For the first time in Iraqi history, areas of the country that desire a special federal status similar to that already enjoyed by Kurdistan may initiate a procedure for transforming themselves from ordinary governorates into “federal regions,” potentially acquiring such privileges as the right to establish local paramilitary forces and the right to negotiate local deals with foreign oil companies. In order to obtain the rank of federal region, a governorate must hold a referendum in which no less than 50 percent of the electorate votes and a simple majority votes yes. If multiple governorates wish to band together in one federal region, the proposition must pass such a referendum in each province tagged for inclusion. (Only the Baghdad province is prohibited from forming part of a greater federal region.) If one targeted governorate says no, the federal project founders.

PUTTING THE SUPER-PROVINCE ON ICE?

For a while, it seemed that Supreme Council leaders were on track to realize their grandiose federal ambitions south of Baghdad. The Supreme Council already held a very strong position inside the Iraqi government, thanks not least to its excellent relations with Washington and Tehran -- both of which capitals, somewhat incongruously, consider the Shi‘i Islamist party their number one partner in the Green Zone. The Supreme Council’s project also dovetailed nicely with the aspirations of the twin Iraqi Kurdish parties, which have long sought allies willing to engage in quid pro quo bargaining over the oil-rich city of Kirkuk, which they aim to embrace inside expanded boundaries of the present Kurdistan Regional Government. (The Supreme Council could find Kurdish backing helpful for its similar designs upon areas of the Sunni Arab-dominated Anbar governorate.) And in September 2007 another potential ally entered the limelight: Sen. Joseph Biden (D-DE) sponsored a Senate resolution recommending that Iraqi elites answer the question of federalism through a nationwide “conference settlement.” Such a “conference” would be alien to the provisions for gradual “bottom-up” federalism in the 2005 Iraqi constitution, but would be precisely the sort of setting where the polished Supreme Council leaders would have the upper hand and where the cumbersome, but more democratic constitutional modalities could be dispensed with altogether.[3] (In December, Biden’s non-binding “sense of Congress” resolution passed.)

On January 13, 2008, however, other Shi‘i actors, including loyalists of Muqtada al-Sadr, several branches of the Da‘wa party and many independents, joined Sunni Arabs, Turkmen, representatives of the Yazidi and Shabak minorities, and secularists of all communal backgrounds in signing a “Baghdad charter” that addressed the federalism question from a different perspective.[4] The document expressed deep concern about bids by regional entities to cut deals with foreign oil companies, adding that the status of Kirkuk (which the Kurds hope to absorb into their federal region through an early referendum) should be resolved only through negotiation and consensus, so that the city becomes a “model of national unity, coexistence and social integration of the people of a single united homeland.” The declaration also inveighed against the resort to ethno-sectarian principles in structuring Iraqi politics. Funds from the national budget, for example, should be distributed among provinces according to their relative demographic weight, not communal quotas.

Weeks later, this noteworthy cross-sectarian coalition asserted itself once more. On January 28, Baha’ al-Araji, a Sadrist, spoke before the Iraqi parliament on the issue of the draft law for the powers of governorates -- those that already exist, not the envisioned federal regions. He emphasized, firstly, that the powers the draft law gave to provincial assemblies should come into force only after new local elections had been held and, secondly, that it was necessary to insert a timetable for those provincial elections in the law. Al-Araji was supported in this stance by the Fadhila party (a spinoff from the main Sadrist bloc) and other Shi‘i Islamists, as well as Sunni Islamists, secularists and minority representatives.[5] The opponents of a timetable for elections were the Kurdish parties and the Supreme Council, which also voiced concern about the relatively large role given to the central government in supervising the existing governorates.

For a while, it seemed that Supreme Council leaders were on track to realize their grandiose federal ambitions south of Baghdad. The Supreme Council already held a very strong position inside the Iraqi government, thanks not least to its excellent relations with Washington and Tehran -- both of which capitals, somewhat incongruously, consider the Shi‘i Islamist party their number one partner in the Green Zone. The Supreme Council’s project also dovetailed nicely with the aspirations of the twin Iraqi Kurdish parties, which have long sought allies willing to engage in quid pro quo bargaining over the oil-rich city of Kirkuk, which they aim to embrace inside expanded boundaries of the present Kurdistan Regional Government. (The Supreme Council could find Kurdish backing helpful for its similar designs upon areas of the Sunni Arab-dominated Anbar governorate.) And in September 2007 another potential ally entered the limelight: Sen. Joseph Biden (D-DE) sponsored a Senate resolution recommending that Iraqi elites answer the question of federalism through a nationwide “conference settlement.” Such a “conference” would be alien to the provisions for gradual “bottom-up” federalism in the 2005 Iraqi constitution, but would be precisely the sort of setting where the polished Supreme Council leaders would have the upper hand and where the cumbersome, but more democratic constitutional modalities could be dispensed with altogether.[3] (In December, Biden’s non-binding “sense of Congress” resolution passed.)

On January 13, 2008, however, other Shi‘i actors, including loyalists of Muqtada al-Sadr, several branches of the Da‘wa party and many independents, joined Sunni Arabs, Turkmen, representatives of the Yazidi and Shabak minorities, and secularists of all communal backgrounds in signing a “Baghdad charter” that addressed the federalism question from a different perspective.[4] The document expressed deep concern about bids by regional entities to cut deals with foreign oil companies, adding that the status of Kirkuk (which the Kurds hope to absorb into their federal region through an early referendum) should be resolved only through negotiation and consensus, so that the city becomes a “model of national unity, coexistence and social integration of the people of a single united homeland.” The declaration also inveighed against the resort to ethno-sectarian principles in structuring Iraqi politics. Funds from the national budget, for example, should be distributed among provinces according to their relative demographic weight, not communal quotas.

Weeks later, this noteworthy cross-sectarian coalition asserted itself once more. On January 28, Baha’ al-Araji, a Sadrist, spoke before the Iraqi parliament on the issue of the draft law for the powers of governorates -- those that already exist, not the envisioned federal regions. He emphasized, firstly, that the powers the draft law gave to provincial assemblies should come into force only after new local elections had been held and, secondly, that it was necessary to insert a timetable for those provincial elections in the law. Al-Araji was supported in this stance by the Fadhila party (a spinoff from the main Sadrist bloc) and other Shi‘i Islamists, as well as Sunni Islamists, secularists and minority representatives.[5] The opponents of a timetable for elections were the Kurdish parties and the Supreme Council, which also voiced concern about the relatively large role given to the central government in supervising the existing governorates.

THE SUPREME COUNCIL’S BOMBSHELL

There could be other players in the federalism game come April 2008, however. On February 20, Wa’il ‘Abd al-Latif, a former judge and now member of Parliament for Basra, told the southern television channel al-Fayha that he was about to start efforts to create, “in accordance with the constitution,” a “region of Basra” limited to Iraq’s second city and environs, and thus separate from the rest of the Shi‘a of Iraq. In fact, this project dates back five years, and is the only federalist movement among the Shi‘a that cuts across party lines: It receives support from secular politicians (like ‘Abd al-Latif), from tribal leaders and from Islamist opponents of the Supreme Council, such as Fadhila.

Basra’s regionalism shows that Iraqi Shi‘a are not divided into two camps on the issue of federalism, but rather into three: centralists who want a strong Baghdad government, small-scale federalists and those advocating larger, ethno-sectarian regions. On many issues, however, the centralists and the small-scale federalists see eye to eye, as with regard to administration of the oil sector, where ‘Abd al-Latif, like many centralists, has spoken in favor of control by Baghdad. The main cleavage with respect to the question of devolution in Iraq is thus more accurately characterized as setting off the ethno-federalists (the Supreme Council and the Kurdish parties) from all the other groups. Indeed, the latter might well be thought of as “conservative moderates” or even “centrists” for proposing a decisive halt to the demolition of existing Iraqi structures of government that was initiated by US administrator L. Paul Bremer back in 2003. In the centrist view, it is time to start reconstruction in Iraq on the basis of existing infrastructure, instead of destroying even more of the current system, or generating further potential for civil conflict through divisive federal adventures and imagined sectarian “regions” of which no one had even heard prior to 2005.[6]

Notwithstanding the trend toward centrism in the Iraqi parliament, the ethno-federalists had one more card to play. At night on February 26, in the middle of a parliamentary recess and on the eve of the Arba‘in religious holiday, the Supreme Council’s ‘Adil ‘Abd al-Mahdi slipped a bombshell into a letter to his colleagues on the three-person Iraqi presidency council. By the terms of the 2005 constitution, this council is composed of a president (currently, Jalal Talabani of the Patriotic Union of Kurdistan) and two vice presidents, all three of whom have the prerogative to veto legislation passed by Parliament. In his February 26 missive ‘Abd al-Mahdi, one of the vice presidents and a Bush administration favorite, announced his veto of the recent law on the powers of the governorates. In his view, many of the law’s provisions for a degree of central control over the governorates were “unconstitutional.” ‘Abd al-Mahdi clearly stretched the legal limits on his power to the maximum: According to the constitution, vetoes must be declared within ten days of receipt of laws at the presidency council, and the letter was sent 13 days after the disputed piece of legislation’s passage. Even in the middle of the holiday season, other Iraqi politicians reacted furiously, with ‘Abd al-Mahdi’s fellow Shi‘i Islamists in the Sadrist and Da‘wa movements prominent among the protesters.

What happens next with the law on the powers of governorates? The answer is not entirely clear. From the constitutional point of view, the process should be straightforward. Once Parliament reconvenes in mid-March, its members can debate the law and send it back to the presidency council, which will have to adopt it by consensus or reject it within ten days. It then goes back to Parliament, but this time the legislature has the power to ratify the law without presidential consensus. The caveat is that ratification must take place not by simple majority but by three-fifths super-majority (not two-thirds as claimed in some news stories). A complicating factor is that, through certain arguments in his letter, ‘Abd al-Mahdi enters the domain of constitutional review, which properly belongs to Iraq’s federal supreme court, instituted by the 2004 Transitional Administrative Law and still operative pending the establishment of a new court pursuant to the 2005 constitution. In fact, that court has already issued an opinion on the powers of the governorates, specifically limiting these to areas not among the “exclusive powers of the federal government” enumerated in the constitution.[7] But ‘Abd al-Mahdi refers to “legal experts” in his own office who will come up with suggestions for amendments. This practice of circumventing the emerging Iraqi judicial structure is quite typical of the ethno-federalist bloc. Lately, the Kurdish parties have been trumpeting a legal opinion that essentially argues that the Kurdistan Regional Government’s law on oil is more in tune with the Iraqi constitution than the draft law of the central government -- the problem being that the author, British lawyer James Crawford, is not a member of Iraq’s federal supreme court, whose very existence is ignored in his brief note.[8]

BUSH’S BIDEN POLICY

A great challenge to the diverse centrist coalition is the immense support given to its ethno-federalist opponents by players outside the 15 Iraqi governorates that are not part of a federal region. Firstly, there is the powerful backing of the Kurdish parties for the Supreme Council, which often seems aimed at depriving Baghdad of any real capacity for governance. The Kurdish parties are aligned with advocates of “soft partition” in the United States, like Sen. Biden, who tirelessly conjure images of an Iraq neatly split in three and who are programmatically opposed to any restoration of a powerful Baghdad in Iraq. Even in more modest statements, champions of “soft partition” insist on unconstitutional “conferences” that might well serve to perpetuate the hegemony of the ethno-federalists, who are proven ******* of the art of backroom deals. The international media, for its part, simply refuses to recognize the existence of the second party in the ongoing two-way struggle. Instead the media read every single move on the Iraqi political scene as part of a “battle” between Iraq’s “main contending factions, the Shiites, the Sunnis and the Kurds” -- as seen, for example, in coverage of the law on the powers of governorates, largely presented to American readers as a “Shiite objective” in a grand compromise where the Kurds got “their” budget and the Sunni Arabs “their” amnesty law.[9] The deep intra-Shi‘i divisions on the governorates law and the Sadrist demands for a strong amnesty law were conveniently ignored; only the ethno-federalist players were even acknowledged.

Arguably, though, the greatest problem for the Iraqi centrists is what may be termed “Bush’s Biden policy.” While Washington speaks an admirable language of fidelity to strong central government, in practice it consistently extends material and moral support to the opposite camp, the ethno-federalists that share Biden’s vision for Iraq. In 2003, Bremer acceded to Kurdish demands to maintain peshmerga militias; in 2004, the US let the Kurdish parties introduce the fateful concept of “disputed areas” into the Transitional Administrative Law, whereby the old regime’s displacement of individual Iraqis can be redressed by collective demands on territory framed in an ethnic language. Since 2005, when it launched the divisive project of a single sectarian region south of Baghdad, the Supreme Council’s relationship with Washington has prospered. Whenever there is talk in Washington about an alternative to Prime Minister Nouri al-Maliki, the discussion tends to focus on the Supreme Council’s man (and the instigator of the presidential veto of the governorates law), ‘Adil ‘Abd al-Mahdi. ‘Abd al-Mahdi’s accession to power would probably mean the evaporation of the last remnants of centralist thinking in the Iraqi government, currently represented by Maliki personally, as well as figures like Oil Minister Husayn al-Shahristani. Conversely, Washington maintains little or no contact with representatives of the centrist trend whose vision for the future is far more compatible with the long-standing stated objective of US policy: a unified, multi-ethnic Iraq.

It is policy contradictions like these that facilitate the persistence of ethno-federalist dominance in Iraq, despite clear signs that this current is losing influence in the Iraqi parliament and among the Iraqi people south of Kurdistan. The ethno-federalists may not enjoy a parliamentary majority, but they have secured control of two of the three seats on the Iraqi presidency council. They cannot dictate the legislative agenda, but have managed to jostle their way to a blocking majority on the committee charged with revising the Iraqi constitution. Today, in a most ironic manner, Iraqi politics has come almost full circle in a gradual liberation from sectarianism: An institution originally designed in 2005 by the ethno-federalists to protect communal interests -- the presidency council -- is now being used by one of the vice presidents, ‘Abd al-Mahdi, to guard his ruling faction against democratic pressures framed in Iraqi nationalist terms, including from a majority within his “own” Shi‘i community. There are signs that at least some groups inside the government have had enough of the centrifugal forces associated with the ethno-federalists, with the Supreme Council’s complaints about the police in Nasiriyya and Basra suggesting that its supposed monopoly on the security forces south of Baghdad is much exaggerated. But until US policymakers realize the growing importance of the centrist trend in Iraq there can be no real alternative US policy: The major “alternatives” to Biden’s ideas on the Democratic side -- withdrawal or a focus on fighting al-Qaeda -- would only mean a freeze of current power structures and an irreversible head start for the axis of the Kurdish parties and the Supreme Council. These parties, notably, have benefited and continue to benefit from a disproportionate share of US spending on supposedly “national” institutions of government, including the arming and training of branches of the country’s security services. In the meantime, those Iraqis trying to push their country’s politics in a more sensible direction will continue to face a formidable opposition, made up of the combined forces of Republicans and Democrats in the United States, Iran and their ethno-federalist Iraqi partners.

Middle East Report Online: Debating Devolution in Iraq by Reidar Visser