Iraq

 
A picture of an Iraqi psychiatric hospital, now in disrepair. (NYTimes.com)
(Note: we know that US troops are suffering from psychiatric disorders upon returning to the US, but what about the Iraqi people?)

It seems that the US is bearing the brunt of reconstruction expenses in Iraq, even though the Iraqi government is projected to receive a $79 billion surplus from oil revenues by the end of 2008.  As the International Herald Tribune reported last week, Iraq is not only not spending its ever-increasing budget, but some of the government’s money is actually sitting in a US bank.  The figures offered by the article could be easily misconstrued, such as the fact that the US spent $23.2 billion on reconstruction projects since the 2003 invasion while Iraq only spent $3.9 billion between 2005 and April, 2008.  It seems to me that the majority of US reconstruction spending would have taken place prior to that of Iraq.  Not to mention that oil reconstruction, which allowed for increased Iraqi revenues, was most likely a large chunk of the US budget.  Nonetheless, Americans should be questioning the continuing billion-dollar spending.  One worrisome statistic is that between 2005 and 2007, Iraq only contributed 1 percent of its operating budget to maintain reconstruction projects. 

In another story about budgeting US money in Iraq, The New York Times reported yesterday that 20% of US spending in Iraq has gone to contractors for the US military and other US government agencies.  This extremely interesting article states that private contractors now outnumber US troops in Iraq, and that this large population has allowed the US government to keep troop numbers as low as they are while also avoiding a draft.  Further, US spending on contractors (starting from 2003) is slated to reach over $100 billion by the end of 2008.  I won’t paraphrase the entire article here, but I vehemently recommend that everyone read it.  I will be very interested to see how military contracting is used in future conflicts, US and otherwise. 

In a morning speech Thursday outside the Oval Office, George W addressed the Iraq war, political and military advances made by the Iraqi government and shorter tours of duty.  The International Herald Tribune published the full text of his speech. 

“This has been a month of encouraging news from Iraq.  Violence is down to its lowest level since the spring of 2004, and we’re now in our third consecutive month with reduced violence levels holding steady.  General Petraeus and Ambassador Crocker caution that the progress is still reversible, but they report that there now appears to be a ‘degree of durability’ to the gains we have made. 
A significant reason for this sustained progress is the success of the surge.  Another is the increasing capability of the Iraqi forces.”

Some media outlets are focusing on Bush’s statement about the possibility of “reversible progress,” or that he did not specify on the topic of the security agreement with the Iraqi government.  Bush did state that military tours in Iraq will be decreased from 15 months to 12, which I’m sure is good news for our troops.  However, he only vaguely addressed a full withdrawal timeline, as usual. 

In a follow up to my fellow blogger Jennifer’s piece on the lucrative oil wars in Iraq, the BBC has a piece entitled “Iraq seeking help to develop oil“. This discusses the official beginning of the opening up of the oil industry to foreign investment. The six main oil fields that are being opened up to investment are Rumaila, Kirkuk, Zubair, West Qurna, Bai Hassan and Maysan (according to BBC). These are being chosen because according to Oil Minister Husain Al-Shahristani, “These fields were chosen because their production can be raised in a short time and at a low cost”.

Anbar province (known most commonly as ‘the restive Anbar province’) has been handed back to Iraqi authorities. Anbar is the province of Abu Risha (killed in September 2007), the tribal leader whose prominent backing of the Awakening movement continues to drive the province today. This has brought peace to the province, but the peace’s sustainability remains to be seen.

The Center for Strategic and International Studies, a think tank based in Washington DC, has released a report on “Quietism And The U.S. Position In Iraq” on June 19. It is written by Anthony Cordesman and Jose Ramos. It mainly discusses Ayatollah Sistani  and his true level of influence. His positions on various issues such as political and military matters are difficult to gauge because his public statements are very limited. According to the report, “Experts also disagree about the extent to which Sistani has seen some loss of influence, faces a challenge from Shi’ite politicians and parties, and has become more cautious in taking political stands. Furthermore, there are conflicting reports about the extent to which he holds private policy discussions, some of which are reported to oppose any lasting relations with the US.”

The latest news involving Iraqi reconstruction revolves around just one word: oil.  (Reported on Informed Comment) Both UK newspapers, The Independent and The Guardian, published stories today about recent foreign oil company deals with Iraq.  The articles discuss the new contracts negotiated by Exxon Mobil, Total, Shell and BP (amongst others) for “repair and technical support.”  The contracts are not long-term (only two years) and do not include the full set-up for drilling and exploration.  However, there are insinuations, and even some flat-out comments, that the companies are using these agreements as a “stepping-stone” for future, more lucrative contracts.  Both British authors compare this latest development to the western exploitation of Iraqi oil following the post-WWI creation of the Iraqi state (for more historical background, click on Informed Comment or The Independent.)  Essentially, these stories have turned oil companies into the McSinisters of the world (not that I completely disagree with that right now). 

The Washington Post , The New York Times and USA Today also reported on the new contracts.  They state that foreign investment means that Iraq is finally on track with its security and reconstruction efforts, while implying that the US is doing its job in reducing violence and improving Iraqi government and infrastructure.  USA Today’s version of the continuing oil saga is particularly interesting.  Entitled, “Hope arises for Iraqi oil production,” this article views the same story in a completely different way than that of the Brits.  Quoting a Basra councilman, author Charles Levinson describes the return of the oil companies as Iraq’s “wish.”  Here, we are led to believe that the oil conglomerates will save the day (more specifically, Iraq’s economy). 

The US media is claiming that these contracts would propel Iraq into modernization, and more importantly, wealth.  But does this really mean wealth for Iraqis?  Or just more for the oil companies?  As The Guardian, The Independent and The New York Times all state, these oil deals are making Middle Easterners nervous that getting our hands on their oil was the US government’s goal all along.  And of course, the latter group of articles include Iraqi oil output in the discussion about alleviating gas prices in the US, something that Americans are desperate to hear right now.  I don’t have a strong background in economics, but I have to ask: with the exponential increase in consumption by China and India, is a 4% addition to the global supply really going to lower prices for the next six months, one year, five years? 

We’ve all seen it a thousand times before: one set of facts, ten different stories.  That’s just how the media works.  But I’m always left wondering, who should we listen to?