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Daily Column
Iraq Papers Wed: Oil Contracts in Jeopardy
Iraq Plies to IMF Demands, Chalabi Involved in Re-Building the I'tilaf
By AMER MOHSEN 06/16/2009 5:27 PM ET
For the first time in decades, Iraq is negotiating to receive IMF loans amounting to over $5 billion, news outlets report. Al-Jazeera says that these funds will not come without strings attached: Iraqi government sources told the news channel that the IMF has presented a package of conditions that Iraq needs to fulfill in order to receive the loans, including structural reforms to the monetary and economic policies.

One of the main requests of the international organization is for Iraq to cut its food coupons program, which dispenses basic foodstuffs to Iraqi families through a massive public distribution system that was fo following the Second Gulf War and the imposition of economic sanctions on Iraq. IMF sources said that the government should “reconsider” the program in order to make it target poor families exclusively, rather than the current system where all Iraqis are entitled to these food subsidies.

Az-Zaman’s front page claimed that the government “has begun to abolish the food subsidies” in order to satisfy IMF conditions. The paper said that the authorities started making lists of government employees whose salaries exceed a certain limit in order to cut them off from the program. Another major condition of the IMF will likely be the privatization of state-owned companies, most of which have been closed and unproductive since 2003, but the government continues to pay their employees’ salaries in order to avoid the political consequences of firing them.

It should be noted that the food subsidies, which are credited by many for preventing starvation in 1990s Iraq, have been repeatedly reduced since 2003, but – ironically – the cost of the program (now executed through private contractors) kept rising until it reached over $5 billion last year.

Also in Az-Zaman, the paper reports that the “reconstruction” of the Shi'a I’tilaf coalition will include a pivotal role for Ahmad Chalabi, who joined the I’tilaf two months ago. The paper’s headline claimed that Chalabi has committed to “renovating” the coalition, and that a statement by al-Hakeem’s SIIC said that new forces, which had left the I’tilaf in the past, will return, while new factions will be joining “within a new vision” for the alliance that was the biggest political player in Iraq in the post-2003 phase.

Meanwhile, the headlines of the local edition of Az-Zaman said that “unconfirmed reports” claim that 'Izzat al-Duri – Saddam’s second in command and the highest-ranking Ba'thi still at large – has died 10 months ago. The paper quoted a source “close to the Ba'th party” who claimed to have met al-Duri several times in 2003 and 2004; the source said that al-Duri was extremely sick and was unable to walk more than a few dozen meters in 2004, and that his health condition deteriorated thereafter until he died and was buried in a desolate area in the Hamreen hills – according to his will.

Since the US invasion, rumors said that al-Duri was sick with cancer and claims of his death have been made periodically. However, an Algerian paper published an interview with al-Duri two weeks ago, in which he allegedly denied that he had cancer (the interview, however, was made remotely and through written questions, which does not provide concrete evidence.) Sources in the Ba'th party had also stated that al-Duri’s apparent sickness (which was visible in his public appearances before 2003) was not due to blood cancer as was widely believed, but to an undiagnosed case of lactose intolerance.

Meanwhile, government-owned As-Sabah reports that the Iraqi Parliament has formally requested to summon the Oil Minister, Husain al-Shahrastani, for a Parliamentary interrogation next Tuesday. The Minister is currently one of the most controversial in the cabinet, with the Kurdish bloc, as well as several Shi'a parties, demanding his replacement. Other Iraqi MPs, the paper notes, have demanded that a special session be held to discuss major oil contracts that the Ministry aims to dispense to foreign companies in the coming days.

MP Shadha al-Moussawi said that these development contracts could grant foreign companies “up to 50% of oil revenues” and that the administration of the national oil company in the South has made repeated requests to delay the dispensation of these contracts until they are further evaluated. The Oil Ministry had announced that the winners of major contracts to develop much of Iraq’s idle oil fields will be announced in the coming weeks. The doubts surrounding the Minister and these new protests, however, could put these licensing rounds in jeopardy.


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