A Divided Iraq… Who Gets the Oil

Strategic Insider – 2 November 2006 – William Rees-Mogg  

It seems increasingly likely that Iraq will be divided, as it was in the pre-1914 period of the Ottoman Empire.  It is more difficult to determine how the division will be made, though it will not be achieved without more bloodshed.

If one looks at the main ethnic groups, there would seem to be a simple pattern.  The Shia Arabs would take the South, the Sunni Arabs would take the West, and the Kurds would take the North.  Baghdad would remain a mixed City in the centre.   This does approximately correspond to the division of the provinces of Mesopotamia under Turkish rule.  But there are major difficulties.

One obvious difficulty is that Iraq’s oil, which provides the revenue for the state, is largely found in the North and South.  The Sunni community is only about 20 per cent of the population, but they would be unlikely to accept a division which gave all, or almost all, the oil to the Shias and the Kurds.  

The next difficulty is that the Shia are the democratic majority, as the elections have demonstrated.  The Shia militants have connections with the Shia majority in Ian, which adjoins Iraq.  Saddam Hussein ran Iraq under control of the Sunni Arabs, to which he himself belonged. He was grossly oppressive to the Shia.

The question of Baghdad looks insoluble.  In 1900, Baghdad was still an international trading City, like Shanghai, with great wealth and about 450,000 Jewish inhabitants, including the fabulously wealth Sassoons.  Now the Sunni insurgents have control of the main routes into Baghdad, which is protected by American troops.  An American withdrawal would be likely to lead to a Sunni-Shia civil war, for control of Baghdad itself, with the risk of ethnic cleansing.  As the Iraqi militias and the army become more powerful, they are likely to fight each other.  American withdrawal would risk a conflagration but the American presence is not sufficient to keep the peace.

Finally, there is the Kurdish question.  The Kurds have enjoyed a large measure of independence in recent years and the Kurdish area has approached most closely to the level of security that the U.S. hoped to create.  But the Kurds face the threat of the Sunni claim to Northern oil, and the reluctance of Turkey and Iran, both of which have adjoining Kurdish populations, to accept anything like a Kurdistan.   The combined strength of the Iraqi Sunnis, the Turks and the Iranians would, in the absence of the Americans, be too much for the Kurds.

These are some of the problems which face the peacemakers.  It will be difficult for the Americans and the British to withdraw their troops unless they can create a largely autonomous Iraq federation.  Yet such a federation will be fiendishly difficult to create.  Perhaps the West should have looked at these problems before the invasion happened.

Strategic Insider – 2 November 2006 – William Rees-Mogg

Dan Denning

Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.

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