Thread: Archive News - Iraqi Dinar Think Tank - 01/10/09 - 27/03/10

Kurd-Arab feud threatens Iraq growth, investment
* Bitter political feud weakens security, spooks investors

One summer day last year, insurgents drove a truck packed with explosives into a crowded market area in the small Iraqi town of Taza, unleashing a blast that killed 88 people and flattened dozens of clay brick homes. The horrific attack brought millions of dollars in state aid and private donations, fuelling a wave of construction around the blast site that would be the envy of other hardscrabble towns in a province where desperately needed investment and development is obstructed by a bitter, decades-long ethnic feud.

Efforts to rebuild Kirkuk, where dusty, depressed villages and neglected farms belie the vast oil wealth sitting under its soil, and to energise a dormant economy are linked to the U.N.-backed bid to unravel the dispute that has pitted Iraq's Arab-led government against minority Kurds and Turkmen. The dispute over Kirkuk, which Kurds want to make part of their semi-autonomous northern region, is now seen as a chief threat to security as Iraq emerges from a bloody sectarian war and tests its fragile democracy in national polls on March 7.

Abdul Rahman al-Mashhadani, an economist at al-Mustansiriya University, said the feud over control of disputed areas like Kirkuk adds another layer of concern for investors considering Iraq, plagued by a stubborn insurgency and rampant corruption. In the World Bank's ranking of doing business around the world, Iraq falls between Sudan and Tajikistan.

U.S. officials say that creating a measure of growth and establishing cross-ethnic business ties will be essential in unravelling the dispute over Kirkuk and other disputed areas. Even though everything in Iraq comes down to politics, one U.S. official said security is no longer the chief deterrent to investment in Kirkuk, citing serious concerns about whether the province will remain under Baghdad's control, be absorbed by Kurdistan, or become an independent region.

"Without a doubt in our minds, the lack of investment here, the lack of interest, has a lot to do with the lack of predictability," he said on condition of anonymity.

Political uncertainty has undermined Kirkuk's economy in far-reaching ways. Amid visceral confrontation over ethnicity and identity in Kirkuk, which Kurds say was flooded by Arabs under Saddam Hussein and Arabs allege was swamped by Kurds since 2003, Kirkuk was left out of provincial polls last January. This has meant that a law passed to give local officials more leverage in securing funds to rebuild and modernise has not been implemented in Kirkuk.

WANTED: PRIVATE INVESTMENT

Officials from across ethnic lines agree private capital is desperately needed in Kirkuk, especially in agriculture, which is crippled by drought and a lack of suitable seeds and equipment. Yet investment in farming, like other sectors, has been thwarted by multi-generational land disputes among Kurds, Turkmen and Arabs, many of them rooted in Saddam's 'Arabisation' push to move fellow Arabs into oil-producing Kirkuk. Ibrahim Khalil Rasheed, a Kurd who heads the Kirkuk provincial council's economy committee, said 90 percent of land in Kirkuk is subject to ownership disputes. "Without access to this land there can be no development projects," he said. A property dispute board is slowly trying to sift through 41,000 cases dating from 1968 to 2003; only 7 percent have been settled. That figure does not include land disputes that have cropped up since 2003, which may number in the thousands.

Oil has been a blessing and a curse for Kirkuk. Discovered in the 1920s, the super-giant Kirkuk field, with reserves of about 8.5 billion barrels, transformed a dusty trading post into a northern oil hub. Yet oil has also brought great conflict. Oil facilities here have decayed in part, Kirkukis believe, because of uncertainty in Baghdad about Kirkuk's future.

There is evidence to suggest the row has intensified reluctance among global firms eyeing Kirkuk, an older field whose production costs exceed those in southern Iraq. The Iraqi Oil Ministry offered energy majors a long-term contract for Kirkuk last year, but unlike other big fields in less volatile areas, Kirkuk has not yet been snapped up. There have been talks with a group led by Royal Dutch Shell for the field, but no deal on the field is in sight. Of all the fields the ministry has offered in volatile northern Iraq, only Angolan state firm Sonangol has signed up. U.S. officials say a permanent settlement on Kirkuk's future may not be necessary to kickstart the economy.

"We need a direction, that's all," the official said. "That's what's going to bind this country, the vast potential for economic development."

http://www.reuters.com/article/idUSL...pe=marketsNews

Iraq says talks with Shell prolonged, continue

Talks between Iraq and Royal Dutch Shell on a major natural gas deal near the southern oil hub of Basra have dragged on longer than expected but are continuing, Iraqi oil officials said on Friday. Iraq has been working to finalise a multi-billion-dollar joint venture between its South Gas Company, Shell and Mitsubishi, which would capture huge amounts of gas for domestic use or export, currently being wasted through burning.

"The ministry went a long way in the talks with Shell and it is still continuing negotiations," Asim Jihad, Iraq's Oil Ministry spokesman, said. "Iraq has an ambitious plan to invest in its gas sector."

Another senior oil official told Reuters that an initial deal signed in 2008 with Shell will be extended while discussions on a final agreement continue.

"The 'heads of agreement' will be extended and the project will be presented to the next government," the official said on condition of anonymity.

The gas venture, once in place, will be a major feature of Iraq's plans to revamp and modernise its dilapidated oil and gas facilities and to boost sluggish output. A final deal on the gas venture was expected to be signed next month, a third official said on condition of anonymity, but was postponed until after Iraq's national elections on March 7. He said the initial agreement was set to expire on March 22 but that Shell had requested an extension. Officials at Shell declined to comment on media reports that talks with Iraq had been halted.

Shell, Europe's largest oil company, signed in January final contracts for the development of supergiant Iraqi oilfields Majnoon and West Qurna Phase One. The deals are part a series Iraq has signed with international oil companies over the past year, the mainstay of its bid to boost oil output capacity to 12 million barrels per day (bpd), rivalling top producer Saudi Arabia. Output is about 2.5 million bpd now.

Iraq's proven natural gas reserves are 112 trillion cubic feet, a 2007 report from the U.S. government's energy statistics unit said.

http://uk.reuters.com/article/idUKLD...dChannel=11700

Leaving Iraq troops on standby
Although the US president has pledged to pull out all combat troops, lingering brigades could become a security fixture

Yesterday came the first signs of the inevitable in Iraq: a prolonged presence of US troops beyond the status of forces agreement deadline of 2011.

President Obama has promised to get all combat troops (ie most of those still in the country) out of Iraq by August this year. But Thomas Ricks of Foreign Policy magazine has revealed that the top US military commander in Iraq, General Ray Odierno, has asked Obama to keep a combat force in the north for longer than that.

Odierno's request suggests that a somewhat flexible approach will be taken towards the remaining 40,000 to 50,000 troops. The general has asked for a combat brigade to remain in Kirkuk, the ethnically mixed, oil-rich and volatile disputed territory. But the problem of Kirkuk will not be resolved by the end of 2011 and it may never be peacefully resolved at all (see the Falklands, the other oil-rich disputed territory that has had historic battles fought over it, where disputes exist over the rights to its oil and also where the UN, as with Kirkuk, has been called to look into).

If Obama does indeed give his approval then it is likely to be a reflection of the US troop presence in Iraq over the next five, possibly 10, years. Yet, we may well be seeing the South Korea-style permanent military presence taking root here, both as a counter-measure against the impenetrable Iranian influence in the country as well as a measure to keep the peace; since Kirkuk could decide whether Iraq collapses or survives, a prolonged military presence in Iraq focused around the province, as well as other northern areas like Mosul and Diyala – where joint US-Kurd-Arab military patrols have been initiated – can be justified.

How will this be sold to the American and Iraqi public? As I explained to the LSE Ideas Middle East programme, the remaining 35,000 to 50,000 troops are expected to carry on in "advisory" capacities, code for "on standby" if things get really bad and a status more acceptable to a public largely critical of any "combative", and therefore seemingly aggressive, military mandate. Iraqis may welcome this so long as the US keeps out of everyday Iraqi life, stays in the background as the Iraqi security forces become more assertive and generally improve, and so long as it leads to improved security.

Politically speaking, there will be some, especially among the Sunnis who deride Iran's influence and the Shia hold on power, that deem a strong US presence a necessary and imperative counter-measure against other domestic and external forces that have a degree of power far superior than their own.

It is election time in Iraq and the nation is gripped with the campaigning process as they prepare to cast their vote in less than 10 days. For this reason, the US administration is doing well to wait before coming out officially to extend the deadline – lest it hurt any allies, potential or otherwise – and it is likely to wait up to two months after the election as the political framework settles. For these reasons, it is unlikely that the revelation will have any bearing on the elections.

http://www.guardian.co.uk/commentisf...troops-standby

Iraq’s industry ministry signs 3 MoUs with France

Iraq and France signed three memorandums of understanding (MoUs), one of them would be to assemble Renault vehicles in Iraq, according to a press release by the industry & minerals ministry on Saturday.

“Iraqi Minister of Industry Fawzi al-Hariri and his French counterpart Christian Estrosi co-inaugurated a French businessmen center in Baghdad, which encompasses a residential building, which was welcomed by Minister Hariri,” read the release as received by Aswat al-Iraq news agency.

“This only stresses France’s support for and belief in the new Iraq and its fledgling democratization in light of the strong strategic relations binding the two countries,” the release quoted Hariri as saying.

Estrosi is visiting Iraq along with a high-powered delegation of members of parliament, businessmen and industrialists.

“The visit lends great support for Iraq and would encourage other European countries to follow suit and contribute to its rebuilding,” said the Iraqi minister.

He added that the French development agency AFD would launch preferential loans for projects in key sectors in the country.

http://en.aswataliraq.info/?p=127718

Al Habtoor Leighton looks to Iraq - Report
Local contracting giant Al Habtoor Leighton is considering the launch of a branch in Iraq as business in its UAE home market slows.

A joint venture between Dubai’s Al Habtoor Engineering and Australia’s Leighton International, the company believes that an easing regulatory environment and stronger security will provide opportunities for construction firms.

“We are exploring new tenders in infrastructure, buildings and ports,” Abdullah Muwahid, the associate director of Al Habtoor Leighton, told the National.

“Previously when we went there, the war was bad but now we are looking seriously about opening a branch in Iraq.”

Muwahid specified Basra as a location where Al Habtoor Leighton was looking at bidding for tenders. The newspaper added that the slowdown in construction in the UAE had cost Al Habtoor Leighton as much as $3.3bn in terms of cancelled contracts. In January, Reuters reported that the joint venture was hoping to win contracts worth $8.2bn in 2010.

Al Habtoor Leighton also revealed that it may float its engineering unit or the entire group in the third quarter of 2010, with possible listings in Dubai and London.

http://www.arabianbusiness.com/58197...-iraq---report

A statement of the French Embassy in Iraq

French Embassy

The UN Security Council on Friday February 26, 2010 a presidential statement on the issue of lifting the restrictions imposed on Iraq by the Security Council of the United Nations in the field of disarmament and non-proliferation of nuclear weapons. The Council welcomed the action taken by the Iraqi government, which demonstrate their full commitment of the international system to prevent the spread of nuclear weapons. Once this is taking the necessary action recent Security Council is discussing the United Nations the final lifting of restrictions.

France has spared no effort in creating the text of this statement, which was adopted under the French presidency of the Security Council, and considers that this statement constitutes a new stage on the path to stability and the full return of Iraq's sovereignty.

France cheerful this first concrete step to implement the resolution No. 1859 which is designed to allow Iraq to regain its international stature such as the one it enjoyed prior to resolution 661 of 6 August 1990. As repeatedly stressed the President of the Republic, Mr. Nicolas Sarkozy, then France strongly supports this process.

http://nahrain.com/d/news/10/02/100227o.htm

Al-Mutlaq accused al-Maliki and the parties in power in seeking to rig the elections

President revealed National Dialogue Front, Saleh al-Mutlaq said the deputy returned to his forehead to participate in elections after an agreement with Iraqi President Iyad Allawi's bloc to withdraw from the political process and if you lose mass boycott the elections because of fraud.

Al-Mutlaq said in a statement published by Al Baghdadi space that a return to participate in the elections was conditional on the withdrawal of all entities and the component parties of the Iraqi bloc if there was a forgery did not achieve the Iraqi parliamentary majority because of this, accusing Prime Minister Nuri al-Maliki and the parties in power that it intends to rig the elections, he said.

Mutlak strongly criticized the U.S. position resolutions of the exclusion and describing surprising and disappointing

http://radionawa.com/ar/NewsDetailN....686&LinkID=151

Confirms the persistence of al-Shahristani, the Oil Ministry to develop oil fields

Oil Minister Hussein Shahristani said that the State has taken the decision to establish rounds of competition at the insistence of the Ministry of Oil by because of the benefits of the economy based on national development of the fields down to the return of Iraq to the level of the best among oil-producing countries.

He said al-Shahristani, as published by the independent press agency that the acceptance of the International Secretariat of Transparency Initiative in Oslo Iraq's membership in the initiative unanimously to pave the restoration of Iraq's international status as one of the first countries in the region and the OPEC countries in joining the initiative.

The ministry and the rest of its subsidiaries has been able to overcome the obstacles and success of the conferences of the licensing contracts, despite the objections of some parties on the legal and professional contracts, noting that Iraq's possession of oil reserves to pave the higher rates of daily production is clearly the future.

He noted that this initiative dealing with the commitment of governments and extractive companies transparently deploy the proceeds and payments relating to mining of natural resources from the ground and compliance and control in the presence of representatives of civil society.

He said al-Shahristani, this announcement is the result of the tireless efforts made by the ministry in order to achieve the requirements of accession of the official announcement.

http://radionawa.com/Ar/NewsDetailN....675&LinkID=155

U.S. sources: Obama agrees in principle to maintain a combat unit in Iraq after 2011

American sources for the approval of President Barack Obama in principle to keep the unit and six combat brigades in Iraq after consulting the final withdrawal of troops from Iraq in early 2011.

The magazine quoted "foreign policy," the U.S. commander of U.S. forces in Iraq Raymond Odierno made a formal request "to keep a combat unit in Kirkuk after the withdrawal."

It was Odierno, has submitted proposals to officials in Washington about the prospects for development of contingency plans to delay the full withdrawal of troops from Iraq, but met with rejection by members of the Commission on Security and Defense, which stressed that any new changes must take place according to a prior agreement between the two countries.

http://www.radiodijla.com/cgi-bin/ne...?id=2010-02-27

Parliament: the next government, are determined by the state to keep U.S. forces

Deputy Chairman of the Committee on Security and Defense Council of Representatives Abdul-Karim al-Samarrai said "the next government that will determine the mandate to keep U.S. forces, according to need."

And called for U.S. forces and the Iraqi government to "adhere to the terms of the security agreement, which provides for the withdrawal of all U.S. troops from Iraq by end of 2011."

He pointed out that "the issue of keeping a U.S. military unit in Kirkuk, is due to the requirements of the need and desire of the new government will be formed after the next election."

Adding, "since that government would be driven from the Iraqi people, we believe it would go according to the wishes of the people who demanded to leave all U.S. troops from Iraq, which means that everyone abide by the terms of this Convention." He held the government responsible for Samurai repudiation of a referendum on the security agreement signed between Iraq and the United States, accusing it of negligence towards clear as he put it.

http://www.radiodijla.com/cgi-bin/ne...?id=2010-02-27