Tuesday, January 03, 2006

The Economics of Iraq's War Within a War

By tee bee (gotta pull my weight around here sometime...)

The Washington Post notes that the Iraqi Oil Minister resigned yesterday in protest over rising oil prices, which he called "anti-democratic and lack[ing] foresight."

Minister Ibrahim Bahr Uloom needs a lesson in what democracy is, which doesn't include providing oil to consumers at a certain price no matter what it costs the producer. Unless you're talking about Russian democracy.

But the man may be onto something when he brings up foresight, and he should be drawing attention to the real problem:
Iraq's oil industry is in crisis as insurgent groups capitalize on unpopular increases in gas prices by bombing oil pipelines and gas stations and attacking drivers of fuel tankers. In December, the country's oil exports hit their lowest monthly level since U.S. forces overthrew Saddam Hussein in 2003, the Reuters news agency reported.

Will anyone note the good news that somewhere, somehow, somebody is becoming less dependent on this foreign oil and thereby cutting off a significant funnel of money to Mideastern terrorism? Probably not.*

The problem for Uloom is that his country is in significant distress; it will prosper and be productive based on cheap, available energy, and the terrorists understand this.

Iraq's prosperity is a crucial step in winning this war. Without economic stability and independence, Iraq will be ripe for overthrow, as weak as it was under Saddam and at the mercy of the factions most willing to burn everything to the ground in order to control it.

With limited productivity, there won't be much to burn, and there will be few who understand or care what else is left to lose in the transfer of power to radicals.

To win in the short term, we need to stop the attacks on oil productivity and distribution. To win in the long-term, we should be pursuing and introducing other energy technologies that free the Iraqis from this devastating dependency on oil.

*I acknowledge the possible explanations for disparity in the production and export rates in post-Saddam Iraq, given the argument that pre-war numbers were inflated by the oil-for-food scam and weapons-bartering by Saddam; however, the article claims to be pointing out only post-war export figures.

I also understand that part of the hike in prices is to cover Iraq's foreign debt. This is crucial to the nation's economic stability - the sooner Iraq relieves its rescuers, the more likely Iraq will enjoy continued support. Debt shouldn't be discounted as a problematic weight on a government's scales that will tip it away from involvement in Iraq. It won't be long before our own war cost will be thrown in our faces again as the left works to weaken our resolve. Winning Iraq's productivity is a key battle in the GWOT that we have to be committed to.

CP @ Vince Aut Morire.


At 6:47 PM, Blogger Isiah Schwartz said...

If economic stability is inmportant to the Iraqis, then de-nationalising there oil production would be a great start

At 11:03 PM, Blogger tee bee said...

It may well be, but that's a separate question from the cost of production and the reason why it is skyrocketing. It would possibly be harder to control and make gas affordable at all, if producers - who aren't defending their product and equipment without the help of the Iraqi government and the coalition forces - bore the brunt of the costs alone.

Disclaimer: I hate like hell defending anything like socialist practices, but this is an interim wartime and is probably similar to bridge times in other extended wars of ideology.


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