Where could Iraq have been today if each one of its citizens was receiving his monthly oil dividend check?

Sir, I refer to your “The nightmare emerging from Iraq” June 12.

When you write “If Iraq is in the throes of sectarian break-up it is because the country has lost any sense of a national narrative, a shared story”, and I think of that “The Iraq Study Group” report of May 2006, prepared by the US Congress stated: “There are proposals to redistribute a portion of oil revenues directly to the population on a per capita basis. These proposals have the potential to give all Iraqi citizens a stake in the nation’s chief natural resource” I feel like crying.

Can you imagine what different scenario we might be confronting in Iraq were each Iraqi citizen monthly receiving a check as an oil dividend? Can you imagine what kind of example that would have given citizens of other oil-cursed nations, like Venezuela where the government gets directly over 97 percent or all the nation’s exports?

Yes the Iraq Study Group also said about that possibility “but it would take time to develop a fair distribution system.... There is no institution in Iraq at present that could properly implement such a distribution system. It would take substantial time to establish, and would have to be based on a well-developed state census and income tax system, which Iraq currently lacks.” But when compared to all other pains and resources wasted, that seems ex post honestly like the mother of all bland excuses.

And then today I received a copy of a letter signed by 58 Democrats calling for the US to sign up on the Extractive Industries Transparency Initiative, which is a global effort designed to increase accountability and openness in extractive industries… as if that could really move our curse needle in any fundamental way.

By pure coincidence this is part of an Op-Ed I published today in Caracas in El Universal

“During the week I went to one of those conferences where the well-intentioned try to solve your problems with the "resource curse." And that conference versed primarily over how the United States, by means of the Dodd-Frank Act, and the European Community, through laws on corporate transparency, seek to impose on their oil and mining companies strong information requirements regarding their relationship with governments.

My position was, as always: "That sounds very nice but truth be told that for someone who lives under the guise of a giant oil-curse like Venezuela’s, being able to know more about what happens in each specific contract, may be interesting, but could divert the attention from what is happening in general. "

If you really want to help, better published monthly, in a newspaper of global circulation, your best estimates as to the value of non-renewable natural resources extracted, per citizen, per month, represents in each of the various governments around the world. And then let the citizens ask.

I beg of you, do not cause our citizens to believe that you are making their work for them.

With respect to the war against this curse, it is useless for you to strive to make your companies behave with dignity, if we cannot make our governments behave with dignity"

PS. “Oil revenue sharing for Iraq”

PS. A YouTube “Please, while you leave Iraq”

http://theoilcurse.blogspot.com/

http://petropolitan.blogspot.com/

When the oil curse is just too potent

Sir, Edward Luce in “The ghoul of half truths is not America’s real problem”, October 7, referred to a scholar opining that “[Poland’s electorate is divided between people who feel morally superior and people who fell intellectually superior”. 

But, making reference to your “Chávez challenge”, and John Paul Rathbone´s and Benedict Mander’s “Chávez hails election results as a perfectvictory” October 9, in the case of Venezuela, that division is better described as being between people who feel morally and intellectually superior, and those who do not care one iota about that, since they are too busy keeping their eyes fixed on the checkbook in the hands of the chief of turn which contains the oil revenues, and, quite often, they do so, only out of sheer imperative necessity. 

To understand what is happening in Venezuela just try to think about what would happen in your own country if 98 percent of all the nations export revenues were received by a centralized government. There is no Constitution anywhere that can provide for the sufficiently powerful societal checks and balance to handle something like that. 

And if you really want to get upset, just think about the missed opportunity to install in Iraq an oil revenue sharing with the Iraq citizens. Not only would that have set an example for the rest of oil cursed nations, but it could also help to avoid that a future neo Saddam Hussein could be receiving 3 times or more oil revenues as Saddam Hussein ever received.

When democracy dies in the cradle

Sir, Arvind Subramanian is absolutely correct arguing that democratic forces stand no chance against the economic rents of a State, “Arab spring will not see an economic bloom”, February 22.

As an oil-cursed citizen (Venezuela) and therefore an expert on the issue let me assure you that societies where citizens are not paying directly for most of their government expenses, and are mostly positioned as receivers of government favors, there is absolutely no chance to develop a functional democracy. The most one can do is to hope for an illuminated oil-dictator, in the sad certainty that sooner or later one will have to suffer a truly dysfunctional one.

If for instance in Iraq oil revenues were shared out directly in cash to citizens the political dynamics there would have been different, and real democracy could have had a chance to be empowered. As is they are just waiting for the next petro-autocrat, and who could then perhaps even count on an oil production that doubles the highest under Sadam Hussein´s regime.

By the way even taxes can produce a tax-curse, if these are not transparent enough. Currently the UK taxman perceives through taxes on petrol consumption more per barrel of oil than those who give up that non-renewable for ever… and few UK motorists are really aware of how much they pay in these taxes.

How will the fines from Siemens be distributed?

Sir Daniel Schäfer reports on December 16 that Siemens has to pay $1.4bn in fines to US and German authorities in order to settle bribery inquiries in the United States and Germany related to Venezuela, Argentina, Iraq, Israel, Russia and Bangladesh. How much of these fines will the real victims, the citizens of those countries that were the object of the bribery receive and how will these be distributed?

A corruption of a third kind?

The minimum minimorum of exiting Iraq!

Sir your “Exiting Iraq”, August 26, concentrates mostly on the logistics of getting out, like not leaving permanent bases and receiving legal immunity for the forces. After so much suffering can we not be more ambitious?

I was never in favour of the invasion of Iraq but, once it occurred, I pleaded for a scheme that would put its oil revenues directly into the pockets of all the Iraqis, and thereby set an example that could help to empower the democracy in all the other countries that are cursed with the centralization of their oil revenues… the mother of all oil curses. Unfortunately, the supposed builders of democracy forgot bringing with them to Iraq such a fundamental building block.

Now, when exiting Iraq, as a minimum minimorum, we should at least aspire that the next Saddam Hussein, whenever he will appear, should not find it easier to be the next Saddam Hussein… much the same like the next Bush, whenever he will appear, should not find it easier to be the next Bush.

We only wish the first oil news from Iraq were different

Sir, FT’s front page on May 16 spells out “First crude oil pumped by a foreign group for 35 years to flow from Iraq” which reminds us of how much better it could have been with news like “First oil revenues to flow directly to the Iraqi citizens in their history”, since that could really have meant the possibility of turning Iraq into something so much better that their current only best options of ending as a third rate democracy in the hands of an democratically oil elected mogul. How sad it is seeing so many sacrifices made by so many and missing such an opportunity to make a real difference.

What an opportunity we seem to have missed!

Sir, Daniel Smith writes that “Politicians cannot control Nigeria’s corruption crusade”, April 12, and of course he is right, since absolutely no one could do that, at least not while oil prices are high. He writes about Nigeria saying “its politics remains a stark scramble for power in which elites compete for domination of the state apparatus to reap the benefits of control over enormous oil revenues” and as happens, the population then elects a government to whom hand over the oil revenues that in reality belongs to themselves, only to thereafter have to spend the next couple of years licking boots in order to get some of that same oil money back, while the elected government officials, arrogantly, not in need of other tax income, couldn’t care less about them. It is only when you get to understand this that you really get a feeling for what a wonderful opportunity the world seems to have lost in Iraq. Can you imagine what having helped to channel the oil revenues directly to the Iraqi citizens in a transparent way could have done? That could really have been called democracy building, and setting a great example for the citizens of Nigeria, Venezuela and all the other oil cursed nations to follow.

Withdrawal to where?

Sir, you are right about there being “No easy route to an Iraq withdrawal” April 11, but one of the main reasons for that is perhaps that the where-to-withdraw has not been very clearly defined. Withdrawing to a place close by, perhaps even to the borders of Iraq, to see how it goes means a world of difference from a withdrawal to Kansas, USA, from where no politician is going to be able to suggest to take any American troops out, for decades.

Why not just go to the sidelines first?

New York Times, I am a foreigner, but since what America does mean more for the world than the famous butterfly flapping its wings, I hope you allow me a question in reference to your editorial of March 29, “Legislating Leadership on Iraq”. Why is it that with respect to where the US troops in Iraq should go, we only hear about the options of keeping them on the frontline, in Baghdad, or sending them home to the backlines, to Kansas, when instead the normal thing to do would be to first have them go to the sidelines, the borders of Iraq, to see how it goes? Could it be that the US is currently so divided that this option is too middle of the road? If so, you have a much bigger problem than Iraq, since divisiveness is the real weapon for mass-destruction of a nation. Being from Venezuela, I should know.

But be careful of swinging into just another “patriotically correct version”

Sir, of course “nations and individuals do not grow weaker by confronting the truth” as Jacob Weisberg argues in his “Iraq: the patriotically correct version”, March 8, but sometimes it is wiser to lay low with the truth, before you have figured out what to do, after the truth is out. Otherwise truth could be like only rubbing the salt in, for no particular good political reason at all, and could even make things much worse when everyone starts panicking for the door.

Dov Sakheim with “Why America should operate from Iraq’s borders” FT January 5 and James Fearon with “U.S. Can’t win Iraq’s civil war”, Foreign Affairs, March/April 2007, are both making the point that there could be benefits in retiring the troops a bit and allow (force) the Iraqis to work out their own solutions, and as they must do if they want to have ownership of their own destiny. This alternative seems a possible way out, but its chances to succeed would obviously be so much better if the US hang around for a while, for instance at the borders, for if it went a hundred times more haywire than it will as a minimum go, and not having because of an untimely truth retired the young soldiers back to Kansas, from where no one will get them out for ages, because of just another new patriotically correct answer.

Iraq needs mercenaries for peace

Sir, as Venezuelans know so well, it is impossible to build a real democracy upon abundant oil. Democracy is about creating a level playing field, and, therefore, if you want a real chance at democracy in an oil-rich land like Iraq, you need first to distribute their oil revenues equally among all their citizens. For Iraq, distributing their oil revenues upfront, in cash, would carry a special significance since not only would it help to solve the problem of their oil being located only in some parts of the country, but it would also foster an additional bond of national identity among all the Iraqis, be they Sunnis, Shiites, or Kurds. The possibility for each citizen to receive perhaps a couple of thousand dollars a year would promote interest in reaching normality. The World Bank could be the perfect candidate to help implement a very transparent sharing of the oil revenues for Iraq.

In a world where so frequently mercenaries are used for wars, why don’t we help Iraq contract their own citizens, using their own money, to be mercenaries for peace?

Iraq Study Group Baker Hamilton Bush Blair