Saturday, September 03, 2005

Fatal Flaw in Constitution?

The Iraqi Constitution: Potentially Fatal Flaw

There is, as I have written earlier here, reasons to be concerned over the draft for a new Constitution for Iraq.

It might contain the seeds not only for immediate conflict in terms of Sunni anger, but also future conflicts in terms of the power over oil.

For the foreseeable future, oil is everything that Iraq has. Oil exports are 98 % of the country's export, and with foreign assistance of different sorts declining in the future the country's oil dependence is massive.

Iraq has vast reserves. Within OPEC, they are second only to Saudi Arabia. Since large areas of the country haven't been properly explored for decades, it is by no means excluded that further large finds will be made.

Power over oil is the power over the economy that will bring power over Iraq.

That's why it is so disturbing that the draft constitutions provisions concerning oil revenues are so unclear. In all probability, they will be used by the Kurds in the North and the Shiia in the South to argue that any income from new oil wells should go to them rather than through the central government.

There is no doubt that such a reading of the constitution will further a disintegration of the country. There will be very strong incentives for the Kurds and the Shiites to attract oil companies to their part of Iraq to drill new wells, in all probability also so adjacent to old fields that only the distinction between new and old is bound to create conflicts.

On present plans, there will be a referendum on the constitution on October 15th.

Let's hope that the unclear and dangereous parts of the draft constitution can be sorted out before then.