Friday, July 01, 2005

Oil Trust in Iraq

I think we should have set up an oil trust in Iraq similar to Alaska's system, where oil royalities are not given to the government to spend, but to individual citizens in the form of a monthly check.

Reasons?

A. This would have hit hard at the idea that theUS is there for the oil.
B. The chance for corruption or misspending of oil wealth would be lessened.
C. It would have been an excellent weapon against the insurgency.
  1. The populace would grow angry with any attacks on the oil infrastructure.
  2. The Iraqi government would be seen as a clear benefactor.
  3. The checks could be used as a carrot to insecure regions by denying them to areas where "it is not safe to deliver the checks." In other words, report the insurgents, tell your son to lay off the RPG attacks and you might get your checks.
Now, there may have been good reasons not to implement this kind of system or there may be drawbacks that I cannot think of.

If anyone says "the reason it wasn't done was Bush wants the oil" then I guess point A is completely correct. Though, there would be no reason under such a system that Halliburton et al could not get the same contracts and business as they would under other systems. It's only a matter of how to distribute the government's portion of the oil income.

Maybe the reasoning against it was that the Iraqi government will need lots of funds or that they should pay for some of their own reconstruction. A partial solution would be to implement a flat 50% witholding tax on the checks specifically for "war and reconstruction." Yet another incentive against the insurgents, because the checks would get bigger once the insurgents are dead.

I wonder if it's too late to encourage them to set up such a system?

2 comments:

Michael Turton said...

It's a great idea, but it won't stop corruption. Someone has to distribute the money, and there would be plenty of deaders, fictive IDs, applying for it. Both ends of the system would see substantial corruption in the absence of normal government functioning. After all, some $8 billion of US money has disappeared there, so whatever happened to that goes double for Iraqi cash.

I don't see why Iraqis should pay for reconstruction -- it was we who wrecked their country, uninvited and illegally. Maybe we should just distribute checks...

An imaginative proposal, though.

Red A said...

Actually, I immediately thought of the "dead voters" receiving their checks or whatever. I guess you could arrive in person to pick them up...but obviously any system can be gamed.

Regarding re-construction, I agree that Iraq should not pay for any damage we did. For anything else, say, investing in T-72s instead of water purification, I would still say we pay - because we are Americans. (see the Mouse that Roared.)

However, I believe some Congresspeople didn't like that idea too much.