Not a bad idea
Steve, over at Begging to Differ, reports on a pretty good idea: Creating an Iraqi Oil Trust and giving shares in the trust to all Iraqi citizens. This would resemble the Alaskan Oil Trust, where all state oil revenues are pooled, and then dividends paid to Alaska residents. The difference here would be that the shares could be bought and sold, so that Iraqis would in effect have ownership of the oil, and would have more freedom do decide what to do with their shares - sell them, keep them, whatever.
This is a good idea on several levels. One, it gives the Iraqi people on an individual level, a stake in the country's wealth and future. Two, it gives them a clear title on a source of wealth that they can use as they see fit. Three, it would remove or at least mitigate one of the major sources of corruption in resource rich third world ountries - government control of vast wealth. I approve heartily, and this could be something that materially assists the formation of a civil and democratic soceity in Iraq.
Also on that estimable webpage, is a post by Greg linking to and commenting on a list of the fifty most underrated recent movies. This is an interesting list, and as I informed Greg, I have seen 36 of them, and actually own 15 of those. The remaining 14 will give me a goal, now that I can no longer easily go over to the multiplex thanks to the arrival of Sir John-the-can't-be-quiet-in-a-movie-theater. I have seen one, one movie in the last eight months. I used to see at least one a fortnight. Go over and see my additions to the list.
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I agree, an Oil trust is a
I agree, an Oil trust is a good idea, at least in theory. I wish there were a way that such a thing could be pulled off, but I can't really see it.
One of the main problems facing Iraq now is the question of who gets to use the oil, that is, to whom is it sovereign. The answer is unquestionably the Iraqi people, but since the Iraqi people are on the whole still dealing with the whole lights/water/shelter axis, they can't take charge. A trust might be a good way to establish their oversight by proxy.
However. That raises the question of who will run this trust. In order for the Iraqi oil industry to be profitable at all, there need to be creditors and buyers: creditors to finance the rebuilding and modernization of the infrastructure, as well as the short-term costs of extraction; and buyers to buy future oil shipments and wait for the oil to flow.
One problem is that large-scale credit is not forthcoming-- sovereignty and national-stability issues are key here, as I understand it. Iraq is just too big a default risk. Another problem is that right now, nobody is willing to buy hundreds of tankers of future Iraqi oil, for the same reasons. Until delivery of those tankers can be guaranteed, and until there's a stable entity to serve both as current seller and future delivery agent, big buyers are going to be hard to find. Since oil is key to Iraq's future economic health, this is a vicious cycle.
The US's involvement, though clearly a good thing (tm) from many standpoints, only complicates the sovereignty issues that keep buyers away from the oil industry. I'm not sure that a trust of the kind proposed would solve this because it raises all sorts of other questions about who will run the trust, and whether they'll still be around and honest in 10 years' time. Will it be the US? Some international body (unlikely, given the President's tendencies)? Iraqi businessmen? OPEC, for pete's sake?
I hardly need to mention the challenges facing any project that aims to put 150 dinars or 1 share or whatever in the pockets of every single Iraqi, and then hopes to track the authenticity of the shares as they are traded in a rural market the size of Texas. Do we want a scenario where sharks could come in, buy up all the shares, and corner the market, like scalawags did with US Army Veterans' shares during Reconstruction?
Anyway, I'm rambling now and should be stopped. Hence, I stop.
The trust could be
The trust could be administered, at least in the beginning, by Americans - it could later be transferred to a board of directors elected by the shareholders - the Iraqis. I'm sure we could arrange some sort of loan guarantee.
As for the buyers - people buy oil where its cheap, and in a large commodity market, it doesn't really matter where the oil comes from. And things will become more stable - attacks against US forces are already down 22% since Saddam's capture.
Anyway, its an interesting idea, and some pointyheaded policy wonk can figure out the details. Next!
Since my son was born in
Since my son was born in early November, he's been to about a half a dozen movies. We've taken him to "Big Fish," "Love, Actually," and even "Return of the King." He accompanied my wife and daughters to "Brother Bear" and "Elf," as well as the IMAX movie "Santa vs. the Snoman."
Of course, pretty soon he'll reach that stage where he's no longer lulled to sleep by the loud noises and dark theatre, and then we'll be in trouble.
Ooh, and another movie that should be given a mention as underappreciated: Brad Anderson's "Happy Accidents." Hardly anyone saw that movie, and it's great.
Buckethead, that's the
Buckethead, that's the problem. Like it or not, the buyers of oil out there are unlikely to view an American-administered trust as legitimate. People do buy oil where it's cheap, but only where it's certain to actually come out of the ground on schedule as well. That's the problem, and one that a policy wonk can't fix.