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13-12-2006, 12:31 AM #32211
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13-12-2006, 12:33 AM #32212
Mike,
I have been thinking about this with regard to Maliki's power play right before our elections. If some of you remember Maliki's group blustered alot about not being an American puppet and basically told Bush to go screw himself right before our elections. My thought on this situation right now is that maybe Bush is using the current situation to pressure Maliki to distance himself from Sadr. Kind of like saying, alrighty Maliki you can go down with Sadr or you can get on board. In public Bush says he supports Maliki, but behind the scenes Bush is grooming his replacement. The replacement is Bush's big stick that Maliki's about to feel if things don't change.
Walk softly and carry a big stick.
-Theodore Roosevelt, my favorite president of all time.
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13-12-2006, 12:35 AM #32213
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17 year olds WOW
It's good to see those 17 year old getting into dinar's. My son was 16 last year - sold his old Xbox and games - then purchase $300 dollars of dinar in Dec. 2005. He asked and I told him it was a risk but if he wanted to know more he need to do his own research "google son" - well he came back and said "sounds good" - now he is a member of Rollclub and will be able to PICK whatever College he wants after graduation in May.
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13-12-2006, 12:35 AM #32214
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Sorry if already posted:
FOR IMMEDIATE RELEASE
DECEMBER 11, 2006
1:20 PM
CONTACT: Institute for Public Accuracy
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167
Iraq War and Oil
WASHINGTON - December 11 - The Dow Jones news service, which has obtained a proposed draft of a new oil law for Iraq, reports: "Iraq's first postwar draft hydrocarbon law recommends the government sign production sharing agreements and other service and buyback contracts ... An Iraqi oil ministry official told Dow Jones Newswires Wednesday the new law proposes allowing -- for the first time -- local and international companies to carry out oil exploration in Iraq." (Full article)
Co-chair of the Iraq Study Group, Lee Hamilton was questioned yesterday about provisions in the Group's report that call for Iraq's oil industry to be "reorganized" as a "commercial enterprise" to "encourage investment in Iraq's oil sector by ... international energy companies." He declined to clarify whether the Group was calling for some sort of privatization, though he did note that the Group's report had "as many recommendations on oil" as on any other issue.
Similar questions were asked of incoming Senate Foreign Relations Committee chair Joseph Biden (D-Del.) and Sen. Gordon Smith (R-Oregon). (Full transcript below; video at Washington Stakeout)
ANTONIA JUHASZ
A visiting scholar at the Institute for Policy Studies, Juhasz wrote the piece "It's Still About Oil in Iraq," published in the Dec. 8 edition of the Los Angeles Times, which states: "While the Bush administration, the media and nearly all the Democrats still refuse to explain the war in Iraq in terms of oil, the ever-pragmatic members of the Iraq Study Group share no such reticence.
"Page 1, Chapter 1 of the Iraq Study Group report lays out Iraq's importance to its region, the U.S. and the world with this reminder: 'It has the world's second-largest known oil reserves.' The group then proceeds to give very specific and radical recommendations as to what the United States should do to secure those reserves. If the proposals are followed, Iraq's national oil industry will be commercialized and opened to foreign firms.
"The report makes visible to everyone the elephant in the room: that we are fighting, killing and dying in a war for oil. It states in plain language that the U.S. government should use every tool at its disposal to ensure that American oil interests and those of its corporations are met." Juhasz is author of the book The Bush Agenda: Invading the World, One Economy at a Time.
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JAMES PAUL
Executive director of the Global Policy Forum, Paul has written several pieces about oil including "Oil in Iraq: The Heart of the Crisis." He said today: "The cat is finally slipping out of the bag. U.S. policy in Iraq has been fixated on the oil prize for a very long time and the Baker-Hamilton report gives us an important glimpse of that. The language about re-organizing Iraq's oil industry as a 'commercial enterprise' is shorthand for Exxon and BP returning to their former (pre-1972) control over Iraq's oil so that they can rake in future profits in the trillions of dollars. Iraq may be an unspeakable tragedy, but the oil giants are still hoping for 'victory' if they can push the oil law through the Iraqi parliament and ink the contracts before the occupation collapses into oblivion."
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GREG MUTTITT
Muttitt is lead researcher at the British group Platform. He is the primary author of the report "Crude Designs: The Rip-Off of Iraq's Oil Wealth," which outlines the structure of production sharing agreements [PSAs]. He said today: "We know from the Dow Jones report that there are plans for Iraq's oil to be developed by PSAs -- which can be described as Privatization by Stealth Agreements. They give rights to Iraq's oil to multinational companies for decades into the future at the expense of the Iraqi people.
"The Baker-Hamilton report says very clearly that an oil law is needed for foreign investment -- this is shorthand for PSAs. Elsewhere the report says that Bush should emphasize that the U.S. is not interested in oil in Iraq. These are two recommendation of the report that Bush will follow.
"The Bush administration had been calling for a new oil law. It had been claiming that such a law was necessary because foreign investment is needed. More recently, the administration has been claiming such a law would help solve sectarian problems. But this is a Trojan Horse. If one's actual goal were solving sectarian conflict, PSAs would hardly be the remedy. Their real reason is to ensure that multinational oil companies take a share of Iraq's oil."
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***
Question to Hamilton by Sam Husseini of the Institute for Public Accuracy: "Mr. Hamilton, can you clarify one of your recommendations, number 63, which called on the U.S. to 'assist the Iraqi leaders to reorganize the national oil industry as a commercial enterprise' and to 'encourage investment in Iraq's oil sector by the international community and by international energy companies.' Are you calling for some sort of privitization?"
Hamilton's full response: "Oil of course is the critical asset in Iraq. It furnishes a very large percentage of the GDP of Iraq. It furnishes a huge percentage of the total revenues of the government. We recommend many things with regard to the oil industry. I think there are as many recommendations on oil as any other feature of it, and you have to look at them as a package. Okay, thank you."
When Sen. Joseph Biden was asked if these ISG recommendations were "a de facto call for privatization or quasi-privatization" of Iraq's oil, he replied: "No, I think what it's a de facto call for is a political settlement." However, Sen. Gordon Smith (R-Oregon), when he was questioned about the oil recommendations, stated: "This is Iraq's oil, it's not our oil. They need to make these political decisions in how to distribute the resources among the population of Iraqis."
Hamilton, Biden and Smith spoke on Dec. 10.
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13-12-2006, 12:40 AM #32215
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AN old article but interesting
Will Iraq repeat Russia's oil mistakes?
By Greg Muttitt, PLATFORM
Published in al-Sabah al-Jadeed, October 2006
Read article in Arabic
Iraqi Oil Minister Hussein Shahristani announced last week that he aimed to sign oil production contracts with foreign companies by the end of next year. Notably, the announcement was made in Australia - like most of the significant statements of Iraqi oil policy, it was made to non-Iraqi ears.
The same was true of the confirmation last month of the form of such contracts. Speaking to the conference of the International Compact for Iraq, a meeting of international donors in Abu Dhabi, Deputy Prime Minister Barham Salih, who heads the committee drafting a new oil law, announced that production sharing agreements (PSA) would be used - the type of contract favoured by the companies themselves.
Putting Mr Salih's comments into context, the US government representative to those talks threatened that any future economic assistance to Iraq would be conditional on economic reforms - the priority among which was the passing of an acceptable oil law.
But this announcement was made with unfortunate timing. Just a week later exactly that same structure came under renewed fire in Russia for the unfair deal it gave the state.
A dispute flared up when the Russian government announced that it was suspending an environmental permit for the Sakhalin-2 oil and gas project, which is currently under construction.
The project, on Sakhalin Island in Russia’s Far East, is being developed by a consortium led by European oil giant Shell, together with two Japanese companies. While the Sakhalin-2 project does indeed suffer from serious environmental problems, most analysts believed that Russia's real motivation was to change the unfavourable economic terms.
As Jarmo Kotilaine, a Russia expert for the Control Risks consultancy commented, "In Russia, environmental audits are often politically motivated. What the Russian government wants is a renegotiation of the PSA." This was echoed by Adam Landes, an oil and gas analyst at Moscow-based Renaissance Capital, who said, "It seems to be a brutal way of renegotiating previous deals that were quite humiliating for Russia."
The Sakhalin-2 contract was signed in 1994, while Russia was undergoing rapid economic liberalisation, following the collapse of the Soviet Union. Ever since then, the contract has been criticised for its economic terms. In January 2005, the Russian audit chamber warned that, "We have drawn a conclusion that PSA terms for Sakhalin-2 are decidedly not beneficial for Russia." Indeed, so unfair were the terms that leading energy economist Ian Rutledge called it a "production non-sharing agreement".
But it was in July 2005, when the costs of the project nearly doubled from $12 billion to $22 billion, that the dispute really intensified. The Sakhalin-2 PSA is structured in such a way that the Russian state receives nothing (apart from a small royalty) until both the costs and a specified profit for Shell have been deducted. The result is that Shell's profits are guaranteed, while the state effectively carries all of the risk of cost over-runs.
Ironically, two of the main arguments commonly given for oil to be developed by foreign companies are that it reduces the state's risk and that only multinational companies have the capacity to manage major projects - something Shell proved by both the cost over-runs and the environmental damage that it was not up to.
However, despite all these problems with the contract Russia does not have the right to revoke, amend or renegotiate it. Even worse, the contract effectively lasts for an indefinite period of time, with an initial period of 25 years, followed by a right for the company to renew it (without consent required by the Russian state) for further periods of five years in perpetuity.
It is for these reasons that Russia was forced to revoke the environmental permit in order to halt the project.
Russia has only signed three production sharing agreements, all in the early to mid-1990s. All three were controversial and no more have been signed since. In fact, the other two have also both come under pressure following the Sakhalin-2 dispute.
The parallels with Iraq are striking. All three of Russia’s PSA contracts were signed while the country was in a weak position and going through rapid change. It was only later that it became clear what the country had given up.
But Russia is not the only country that is reconsidering the terms of foreign investment. Bolivia famously nationalised its gas production earlier this year. Algeria and Indonesia have both revised the terms of future oil contracts, and Venezuela has done so for its existing contracts. Thus Iraq - despite being a founder of OPEC, and a leader in taking national control of its oil industry through Law 80 of 1961 - seems to now be bucking the international trend.
So why would Iraq pursue such a policy?
A clue lies in the fact that both the deputy prime minister's announcement that PSAs would be used and the oil minister's statement that they could be signed by the end of next year were made to foreign audiences, not within Iraq. It seems it is outside interests that are driving Iraqi oil policy.
During the drafting of the oil law over the last five months, three consultations have taken place - none of them with Iraqis. The US government and the multinational oil companies were presented the draft law for their comments in July. Last month, the International Monetary Fund joined this list, examining the draft oil law in its quarterly review of the Iraqi government's compliance with its economic conditions.
But the Iraqi people have not been consulted, nor even has the Iraqi parliament. Indeed, Iraqi civil society groups and parliamentarians who have asked to see the draft have been told that it does not exist. Instead it will be presented to the parliament in December, to be pushed through (the government intends) as a fait accompli.
Russia realised the mistakes it made by signing PSA contracts only when it was too late. It remains to be seen whether Iraq follows the same course.
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13-12-2006, 12:44 AM #32216
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More Oil Info
Places » Iraq - النفط في العراق
About production sharing agreements
PSAs in summary:
A contract between a multinational oil company and a host government, in which the corporation provides capital investment, in exchange for control over an oilfield, and access to a large share of the revenues from it
Lasting usually 25-40 years - and sometimes even indefinite.
A change of language, describing the state as "owner" and the foreign company as "contractor", but in practice mostly equivalent to the old-style concession agreements.
Precise terms depend on negotiation between state and company.
Often contains "stablisation clause", which restricts future governments' ability to change tax rates or pass any new law which affects the company's profits.
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See also Production sharing agreements - Surrendering Iraq's resource sovereignty?, a presentation to the al-Kindi Society for Engineers
PSAs in Iraq:
In the minds of some neo-conservatives, writing on Iraqi oil before the war, "privatisation" meant the transfer of legal ownership of Iraq's oil reserves into private hands. However, in all countries of the world except the USA , reserves (prior to their extraction) are legally the property of the state. This is the case in Iraq, and remains so under the new Constitution. There has never been a realistic prospect of US-style privatisation of Iraq’s oil reserves. But this does not mean that private companies would not develop Iraq’s oil...
In some ways, the debate on “privatisation” has obscured the important practical issues of who gets the revenue from the oil, and who controls the way in which oil is developed. On this matter, Iraq has a relevant history.
The development of Iraq’s oil industry began in the aftermath of the First World War, while the country was occupied by Britain under a League of Nations Mandate. In 1925, Iraq’s British-installed monarch, King Faisal, signed a concession contract with the Iraq Petroleum Company (IPC) , a consortium of British, French and (later) American oil companies. The contract followed a model widely applied in the British colonies. It was for a period of 75 years, during which terms were frozen. Combined with two further concessions granted in the 1930s, the IPC obtained rights to all of the oil in the entire country. Even the Iraqi call for a 20% stake in the concession was denied, despite having been specified in earlier agreements.
As Iraqi frustration at the unfair terms of the deal grew, in the 1950s and 1960s the contract came under pressure. Underpinning this were the issues of the split of revenues between company and state was a fair one, and the degree of control the foreign companies had over the development: they restricted production to boost their other producing areas, and used their monopoly on information in order to fix prices so as to deprive Iraq of income. These same arguments were echoed in all of the major oil-producing countries at the time, most of which had similar deals with multinational companies. The ultimate conclusion to these disputes was the nationalisation of many oil industries – in Iraq’s case in two stages in 1961 and 1972.
While these disputes were raging in the Middle East, a different model was emerging in Indonesia. There, a new form of contract was introduced in the late 1960s: the production sharing agreement (PSA).
An ingenious arrangement, PSAs shift the ownership of oil from companies to state, and invert the flow of payments from state to company. Whereas in a concession system, foreign companies have rights to the oil in the ground, and compensate host states for taking their resources (via royalties and taxes), a PSA leaves the oil legally in the hands of the state, while the foreign companies are compensated for their investment in oil production infrastructure and for the risks they have taken in doing so.
Although many in the oil industry were initially suspicious of Indonesia’s move, they soon realised that by setting the terms the right way, a PSA could deliver the same practical outcomes as a concession, with the advantage of relieving nationalist pressures within the country. In one of the standard textbooks on petroleum fiscal systems, industry consultant Daniel Johnston comments:
“At first [PSAs] and concessionary systems appear to be quite different. They have major symbolic and philosophical differences, but these serve more of a political function than anything else. The terminology is certainly distinct, but these systems are really not that different from a financial point of view.”
So, the financial and economic implications of PSAs may be the same as concessions, but they have clear political advantages – especially when contrasted with the 1970s nationalisations in the Middle East. Professor Thomas Wälde, an expert in oil law and policy at the University of Dundee, describes them as:
“A convenient marriage between the politically useful symbolism of the production-sharing contract (appearance of a service contract to the state company acting as master) and the material equivalence of this contract model with concession/licence regimes in all significant aspects…The government can be seen to be running the show - and the company can run it behind the camouflage of legal title symbolising the assertion of national sovereignty.”
These advantages now appear to make PSAs the Western method of choice for future development of the Iraqi oil industry.
But the cost to Iraq could be severe. PLATFORM's research estimates that the use of PSAs could cost Iraq net revenue of up to $200 billion (seven times current GDP), compared to keeping oil in public hands. Furthermore, they could deprive Iraq of democratic control over its most important natural resource:
PSAs fix the economic terms for 25-40 years, preventing future elected governments from changing their taxes or other economic policies.
They deprive governments of control over the development of their oil industry, instead giving key economic decisions such as the depletion rate to the foreign companies.
They generally over-ride any current or future legislation that compromises company profitability , effectively limiting the government's ability to regulate.
They commonly specify that any disputes between the government and the foreign companies will be resolved not in national courts but in secretive international arbitration tribunals which will not consider the Iraqi public interest.
It seems that if PSAs are signed in Iraq - as key politicians, under pressure from the UK and USA, are keen to do - the country could be surrendering its democracy as soon as achieving it.
For more information, see our Crude Designs report.
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13-12-2006, 12:54 AM #32217
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13-12-2006, 01:05 AM #32218
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By HAMZA HENDAWI, Associated Press Writer
1 hour, 28 minutes ago
BAGHDAD, Iraq - America's outgoing No. 2 commander in Iraq said Tuesday that curbing unemployment and improving services would help reduce the violence in the country, warning that military muscle cannot win the war alone.
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Lt. Gen. Peter Chiarelli, in the last days of a second Iraq tour, also drew a picture of daunting challenges facing the U.S. military in Iraq as it strives to keep up with a constantly changing enemy whose knowledge of the terrain and culture give it an edge over the Americans.
At times during his farewell news conference, Chiarelli — in charge of day-to-day combat operations throughout Iraq — sounded exasperated, almost despairing, over what he said were misperceptions that American forces were fighting a conventional war or that they can achieve victory without improvements on other fronts.
"I know everybody wants us to charge on out there and make everything OK," he said. "But you cannot if you don't get those other things moving. I don't know why it's so hard to get people to understand that," he said, alluding to the need to create jobs and improve services in Iraq.
"I also get frustrated at times that everybody compares us to other conflicts we have fought, like somehow there is a defined enemy out there, a group of individuals that if you can just go out and either kill, capture or put in jail or do whatever, everything will be all right," he said. "I don't believe that, I don't believe that."
"There is no doubt in my mind that the soldiers, sailors, airmen and Marines that we are bringing over here are trained for the fight at their hands. Is it tough? Yeah, it's really tough, it's very tough," he said.
Chiarelli's assessment of the U.S. military's predicament in Iraq came as President Bush was continuing efforts to formulate a new approach for Iraq following the release last week of a report by a bipartisan committee that described the situation here as "grave."
"We don't have to drive unemployment down to 4 percent like in the United States, that's not what I am talking about. We don't have to have 24 hours of electricity in Baghdad," he said. "But if we can increase the power in Baghdad back to 12 hours a day, it would be huge."
With reduced unemployment and fewer power cuts, he said, "I think we will see things here change in ways that are hard to believe right now when you see the level of violence out there."
Chiarelli's notion that the fight against the Sunni-led insurgency and efforts to disband Shiite militias would have a better chance of success if the use of force went hand-in-hand with stepped up economic activity is not new.
The U.S. military has tried this, without much success, from as early as 2003 — a time when many were upbeat about Iraq's future after the ouster of Saddam Hussein, with foreign aid money flowing in and a free-market economy swiftly taking hold after decades of state control and crippling U.N. sanctions.
For its part, the U.S. military has given out hundreds of contracts to local firms to repair schools and overhaul medical facilities, power transformers and roads. But with widespread corruption, mismanagement and relentless insurgent attacks, little has changed on the ground.
Nearly four years after Saddam's ouster, Iraq's economic woes are staggering.
Unemployment is thought to be anywhere between 20 percent and 60 percent, inflation above 50 percent and more than 1.5 million Iraqis, mostly professionals, have fled abroad, according to the Iraq Study Group report and U.N. figures. Lengthy power cuts are routine, fuel shortages are chronic and health care is close to collapse.
"Putting young men and middle-aged men to work will have a tremendous impact on this level of violence we are seeing in and around Baghdad and in other provinces," Chiarelli said.
He contended that because of military sweeps, life is returning to normal in some areas of the capital, including the mainly Sunni districts of Dora and Amariyah.
"People are out, about, walking around, markets are open, fruit stands are open and commerce is bustling," he said.
Residents of Dora say the area has been quiet in recent weeks, but that they are too afraid to leave their homes after dark and that a Shiite enclave in the district is frequently shelled by mortars fired from Sunni areas. Amariyah is quieter, but bodies of apparent victims of sectarian violence are found there almost daily, according to residents.
Violence in Baghdad districts often goes in cycles, with turbulent areas becoming quiet during and immediately after large-scale counterinsurgency operations — only to flare up again when the focus of the U.S. forces and their Iraqi allies shifts elsewhere.
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13-12-2006, 01:13 AM #32219
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Sun December 10, 2006
Iraqi pup provides lesson in love
Soldier chronicles surprising, heartwarming events
Lt. Col. Jay Kopelman (with Melinda Roth) has written a book about war and humanity. "From Baghdad With Love” (The Lyons Press, $22.95) is also about a small group of U.S. Marines, who, trained to kill in any number of ways, manage to hang onto and even nurture their humanity during war.
The object of their kindness is a tiny puppy, not much larger than a deck of cards, who turned up in an abandoned Baghdad house and with an infantile growl (roo-roo-roo-roooo) threatened to chew up the Marines who found him.
When they entered an abandoned house and heard his small noises in an adjacent room, they assumed it was an enemy. Normal routine was to toss in a grenade. Instead, for unknown reasons, they raised rifles and rushed in. The pup yipped, threatened and then wagged his tail. They were hooked, especially Lt. Col. Kopelman.
Violating the rules, the Marines adopted the pup, who fit right into their routine, their hearts and Kopelman’s sleeping bag. He thrived on their ready-to-eat meals and got by with chewing up their shoes and one Marine’s last pair of socks.
They named him "Lava” for the grounds on which they had trained; they de-fleaed him in kerosene, de-wormed him with cigars and fell hopelessly in love. He grew to be a large dog. Ordered back to the United States, Korelman couldn’t face what would happen if Lava had to be left in Iraq, where abandoned dogs ate human corpses.
But getting Lava out of Iraq appeared impossible, and so began frantic efforts and string-pulling by Kopelman. Equally humane help came from a National Public Radio newswoman and a kind Iraqi man identified only as "Sam.” Had his real name been disclosed, Sam could be in danger for having helped Americans. Sam may never know the book is dedicated to him.
The book is about more than just kindness to animals, about tough, tenderhearted Marines and about overcoming obstacles. It’s also about brotherhood and the nature of at least one Iraqi. There are bound to be countless other Iraqis with hearts like Sam’s.
— Mary Jo Nelson
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13-12-2006, 01:19 AM #32220
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UNITED NATIONS : Iraqis need international support
(Voice of Iraq) - 12 - 13-2006
This issue was sent to a friend
News agencies : envoy called on the United Nations Secretary-General Kofi Annan sector in Iraq, Ashraf Jehangir Qazi, on the international community to provide assistance to the Iraqi people, stressing that the controversies on the question of whether the country in the midst of a civil war or not, does not alleviate their distress · The judge told reporters in the report of the International Security Council on the situation in Iraq yesterday evening, "that Iraq is on the brink of civil war and chaos ·
Faced with fundamental issues not accept solutions based on power alone and the excessive reliance on the use of force may indeed spoil the reconciliation through negotiation is the only viable basis for stability, "but he said that engage in a debate about the civil war, according to the Dictionary definition or another, hardly ease the full catastrophe in Iraq, and instead of analysis of tariffs, the effort must be focused on prevention," a true disaster for the human rights situation "·
He said that a broader and more comprehensive approach to solve the problems of Iraq must include the participation of Member States in the UN Security Council and governments in the region to assist Baghdad ·
He pointed out in his report, "due to the lack of political unity now and balkanize the Iraqi society and the levels of violence, which causes paralysis, it is unrealistic to expect the government and parliament to make any progress without the active cooperation of the regional and international community," ·
He added that Iraq and its neighbors "do not say that the conflict can not be resolved by focusing exclusively on the political movement Iraqi Interior alone and should therefore be the participation of the United States, Russia, China, France and Britain with regional governments to find a political solution" ·
And said Qazi "if Iraq had had the would avoid the catastrophe national, it is necessary to have a sense of collectively that there is a pressing need to work for the settlement of, the solutions that achieve gains for some at the expense of others is not in line with the political stability and national security" · He explained that his talks with the leaders of the Iraqi political parties, showed that they asked for equitable distribution of the proceeds of oil and "sharing unrealistic to the authorities" includes the collection of taxes from governorates and regions and develop the security forces to become national institution rightly, disbanding the militias, and armed groups other illegal gradually ·
And they also want to find a "mutually acceptable to all parties" to discuss the future of the multinational forces led by the United States and its role in the process of national reconciliation ·
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