| 2008: Iraq is Banking on Oil Wealth |
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July 12, 2008 It is a politician’s dream: handing out cash to people on the street as they plead for help. Prime Minister Nouri al-Maliki has been doing just that in recent weeks, doling out Iraqi dinars as an aide trails behind, keeping a tally. The handouts by al-Maliki and a few other top officials are authorized — as long as each goes no higher than about $8,000 and the same people don’t get them twice. Aides say they are meant merely to ease the pain and are motivated by a belief that better conditions will lead to more security. The handouts are just one small — if eye-catching — part of a major investment push this summer by Iraq’s government. The aim is to rebuild basic services and jump-start Iraq’s economy by quickly distributing much of the country’s glut of oil revenue — an estimated $70 billion this year. Months of diminished violence have allowed Iraq’s battered oil industry to return to its prewar production level of 2.5 million barrels a day. (Before it invaded Kuwait in 1990 and faced international sanctions, it produced almost 4.5 million barrels a day.) Resurgent production and record oil prices add up to a windfall. Along with the street handouts, part of it is being passed on to civil servants in pay hikes that took effect at the end of June. The new scale includes extra pay for seniority and dependents and for education level. Raises are 50 percent for those with a bachelor’s degree, 75 percent for those with a master’s and 100 percent for those with a doctorate. It’s also a plea aimed at the thousands of Iraqi professionals who fled the country. The message: Things are getting better; come home. All told, the government will spend an additional $1.8 billion annually on salaries for its employees, all of it from oil revenues, said Ala Abdullah, a member of the parliament’s finance committee Yet the new Iraqi effort runs a high risk of failure. The government is disorganized, fears of favoritism remain, and the shadow of corruption haunts every step. "Money is not a problem," al-Maliki said at a recent gathering of tribal chiefs in the southern city of Basra. "But we must put it in honest hands to spend." Among the latest spending announcements: $100 million to rebuild Sadr City; $100 million to the Shiite city of Basra after fighting there; $100 million for another southern Shiite town, Amarah; and $83 million to help internal refugees return home. Mostly, al-Maliki gives out $200 to $400 to widows, the unemployed and people needing medical care. On one recent visit to a park in Baghdad, he gave a group of boys the equivalent of $40 in dinars each to buy soccer balls. |