The Critical Battle in Iraq

Federalism Emerges As Deal-Breaker in Iraq - Yahoo! News

Media reports create the impression that the security situation is the most serious of the challenges in Iraq today.

Serious as it is, I would argue that it is the constitutional process that will really decide what happens in and with Iraq in the years to come.

By Monday, the different concepts should be brought together in a common proposal for a new constitution.

At the center of the debate is the degree to which Iraq will be a federal state with substantial powers for its different regions. And among the powers that are under dispute are the powers of responsibility for the oil revenues of the country.

In fact, the oil revenue question is central to the entire battle. One can have regions with very substantial autonomy, but if they don't have access to financial resources they tend to be adjunct to the centre anyhow.

Sicily in Italy can serve as an example. For historical reasons it has a very far-reaching autonomy within Italy, but since most of the financial resources of the Sicilian authorities are coming from Rome it does not necessarily makes that much of a difference.

In Iraq it is hardly surprising that both the Kurds in the North and lately also the Shiites in the South want to have control of oil revenues. That's where the oil is. And it is as natural that the Sunnis in the center are dead against is, and want Baghdad in control.

So we have seen the Americans coming in strongly to favour the Sunni position on this issue, knowing that if oil revenues are not flowing through Baghdad there are very scant possibilities of the country remaining some sort of united entity in the years to come.

These are other issues - notably those concerning the role of Islam in society - are now on the table as one rushes to complete the constitutional talks in order to meet the August 15 deadline.

We'll see. Positions are very entrenched - and perfectly logical. As things stand now, it looks somewhat unlikely that the deadline will be met, unless there is a serious fudging of the more difficult issues.