Monday, March 12, 2007

Great Idea For Sharing Oil Revenue in Iraq

As we know the Iraqi cabinet approved a draft oil law to divvy up Iraq’s most critical natural resources and the billions of dollars the country stands to make from selling it.

Economist and commentator Susan Lee says the “Alaska Permanent Fund” would avoid “the oil curse” that produces an inordinate amount of corruption, graft, and waste. The state of Alaska takes a quarter of the amount of money it makes on oil leases and royalties and puts it in an investment portfolio. This portfolio pays a dividend each year to each Alaskan citizen. Alaska set up this fund 30 years ago and today it’s got 36 billion dollars in assets. Last year the dividend was over $1100 for every adult and child. In addition Alaska runs a tip hotline to combat fraud. Last year alone it recovered $3 million dollars in fraudulent dividend claims whereas it is estimated that more than $11 billion dollars a year is being stolen from the oil industry.

Duplicating this fund in Iraq would certainly contain the government corruption that normally goes hand-in-hand with the wealth an oil-rich country brings. Iraqi citizens would profit directly therefore they would have an incentive to make sure the oil industry runs efficiently and honestly.

Lastly, an oil fund for Iraq would spur consumer spending which would grow their economy and provide for a much better quality of life than they would otherwise have if this current draft is turned into law.

Obviously, the goal of our current government is not to create an Iraq where its citizens are given a chance to prosper, build a strong middle-class and democracy, but to create a situation where the elites enjoy all the power and the rest of the citizens have very little opportunity to participate in the type of economy that would naturally evolve from massive oil revenue in the hands of its citizens. The situation we’ve created by invading Iraq has achieved the exact opposite of what the Bush administration gives as one of the reasons we went to war in the first place, to reduce the number of terrorists in the world and establish an environment that would discourage terrorism. Instead, the Bush administration has managed to lay foundation for increased terrorist recruitment now and in the future.

I don’t believe the Bush administration’s goal was to increase the number of terrorists in the world, but to secure and increase the power and money the “hyper rich” currently hold. In other words, they didn’t set out to fan the flames of terrorism but if in their pursuit of greater wealth and power, terrorism spreads throughout the world as a result, they don’t give a damn.


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