Iraq: more blasts and few US gains
With the remaining 33,000 US troops in Iraq preparing to leave, bomb blasts and a gasoline blaze in a market on this Muslim festival Sunday killed another 10 innocent persons and injured many others. The troop withdrawal was always known to be fraught with menace but things seems to be going from bad to worse. Bombings and killings occur daily as Sunni insurgents probably linked to al Qaeda and Shi’ite militias perpetrate lethal attacks against each other’s communities.
The Obama administration may declare victory as it exits from Iraq, but the US will have obtained few political gains and almost no economic gains from the war. Its companies have not reaped multibillion contracts in broad non-energy economic areas that might continue after the withdrawal. Whatever money they made was during the war, which cost more than one trillion dollars. Some large sections of that went to American contractors and their subordinates.
Nearly 4,500 American troops were killed, including about 1,300 younger than 22-years-old, and nearly 32,300 were injured, according to reputable estimates. Despite such sacrifice, the US is far from popular because of the destruction caused. The Brookings Institute estimates over 115,000 Iraqi civilians killed out of a 25 million population and 3.5 million displaced. The death toll would be over one million if a similar proportion were killed in the US.
If Americans companies could not win juicy long-term contracts while the troops were there, they are hardly likely to win much after the withdrawal. The Shia-dominated government of Prime Minister Nuri al-Maliki while not in Iran’s pocket is friendly to Teheran and prefers contracting with Russia, China and Europe. There is very little the White House can do because the Maliki government is already turning cool towards US political interests in the region. Suitors in its neighbourhood surround it: the very rich Gulf states, Syria, Turkey, Iran and Jordan. All are wary of the US although some profess friendship.
Many countries are jockeying for position to get a piece of the Iraqi oil cake but one category of American companies will still reap a longer-term bonanza. They are oil-drillers that have no foreign competition. For instance, Russia’s Lukoil, which won a contract for part of a field said to hold about 10 percent of Iraq’s known oil reserves is using American drillers. International majors are expected to obtain $150 billion in Iraqi oil contracts and about half is likely to go to just four oil drillers linked to the Texas oil industry.
The risk factor in Iraq so far is the Parliament’s inability to decide on division of oil profits among the Sunnis, Kurds and Shias. The US wanted to locate large consulates in the northern Sunni and Kurd areas to prevent political destabilization but it does not seem to have much influence anymore. Turkey, which has strong influence in Kirkuk because of a large population of Iraqi Turks, is also entering the game to prevent Kurds from keeping local Turks out of political power.
A discouraged State Department appears to have shelved plans to build large consulates containing several hundred people each in the Northern cities of Kirkuk, which is oil rich, and Mosul, which is the power centre of the disgruntled and violent Sunni minority. However, the self-sufficient US embassy and compound in Baghdad, which is the world’s largest, may contain 8,000 to 16,000 people probably including military personnel using diplomatic cover for legal immunity.
The Kurds claim the Kirkuk oilfields belong to them. This major political issue could destabilize the Baghdad government after US troop withdrawal. Some fear the entire nation may sink into chaotic tribal violence because everybody wants the oil money. Even the Shias are not monolithic and the southern Shias who dominate the lion’s share of Iraqi oil are just fair weather friends of Maliki. Baghdad’s Muqtada al-Sadr, who controls a fierce Shiite militia, is no friend of Maliki. But all are keeping their heads down to bid Godspeed to the US withdrawal. Internal reckoning among factions may follow soon after.
New oil contracts, which are usually secret and last 25-40 years, could range from $74 to $194 billion and yield massive profits to foreign companies of 42% to 162%. Iraq has 12% of world oil reserves valued at over $27 trillion at $75 a barrel over 100 years. So there is a lot to gain for everyone and a lot to fight over.