Sunday, February 10, 2013

Oil Discovery in Iraq

Iraq officials announced on 20 January that they had discovered over one billion barrels of crude oil in Maysan, a southeastern province near the border with Iran.  The deposits were found after an exploration in the Maysan province and could potentially make a significant addition to the already substantial reserves in Bahgdad (Dawn Newspaper).

Being that Iraq is highly dependent on oil sales for government revenue, the possibility of increasing its production in this field is always a high priority.  This new find in resources, however, brings up many opposing thoughts of whether this could be a resource curse, causing Iraq to backslide democracy and revert back to the Saddam Hussein led dictatorship or more of a blessing, continuing to further its democratic transition.  After years of violence and unrest, Iraq's oil production facilities are still recovering and the state has new plans to increase oil exports, up to 12 million addition barrels each day by 2017 (Niqash).  Although this is an incredibly optimistic goal, it would surely give way for Iraq to become the largest oil exporter in the world.

Iraq is on its way to becoming one of the biggest oil exporters in the world, earning billions, yet most of its citizens live in poverty.  In my opinion, I think that a direct cash payout to its citizens is more necessary than ever if Iraq wants to remain on a path to democracy and not see its citizens begin revolutions.

Johnny West, a Huffington Post editorial put it like this, "Why not give petro-dollars back to the citizens?  Directly, in cash."  West argues that this could potentially abolish poverty within two years which would attract attention from the public that governance in the oil industry would never be the same again (West).

Essentially, the idea is that every Iraqi would have a direct oil dividend and a personal stake to keep the oil industry going.  This, in turn, would arguably help to combat the "resource curse," allowing Iraq to remain fixed on democracy.

It is obvious that the discussion on how Iraq should spend its oil revenues will indefinitely remain a source of disagreement, especially at the speed in which the Iraqi government solves any issue.  While the government decides how best to invest this income, the citizens can do nothing but wait helplessly and only dream of the benefits that black gold can bring them.  I am in agreement with West in saying that, "When there is a crowded football stadium of hard core transparency activists in Iraq - and millions of armchair spectators at home, cheering them on - that's when we'll see progress on the Resource Curse."


"HEADLINES." DAWN.COM. N.p., n.d. Web. 10 Feb. 2013.
"Johnny West: Give It Back! Direct Citizen Oil Dividends in Iraq, Why Not?" The Full. N.p., n.d. Web. 10 Feb. 2013.
"The Resource Curse: Will Ordinary Iraqis Ever See Their Oil Money?" Niqash. N.p., n.d. Web. 10 Feb. 2013.

1 comment:

  1. It is an interesting and revolutionary idea, a direct cash payment. I like it, although I see some problems with it (of course).

    1. What would make the government want to do that? I mean, they would essentially be losing lots of revenue. A potential answer is taxation. Which I think would help improve accountability of the government to the people.

    2. Corruption could become rampant. In payments to people, in numbers reported (why not "forget" to mention some $2 billion of oil revenue for distribution and divide it amongst the elite?)

    3. Iraq has many issues facing it now after the U.S. occupation and continued violence. Is the resource curse the biggest issue facing it now? Even if it is not now, it may be down the road when other issues are worked out.

    It will be interesting to see how these issues might be resolved.