Why Iraq oil money hasn't fueled rebuildingSmugglers and thieves are stealing profits from oil even as insurgents work to keep the nation unstable.
By Howard LaFranchi | Staff writer of The Christian Science Monitor
WASHINGTON – First, the good news: With oil prices at record highs, Iraq is on track to bring in $20 billion or more in oil revenue this year.
That may sound like a lot of petrodollars, especially for a war-torn country with tremendous needs in infrastructure repair and services delivery.
But the bad news is that very little, if any, of that money will actually be used in the country's stalled reconstruction - despite past lofty predictions that oil-rich Iraq would be financially self-sufficient by now.
Dealing with Iraq's insurgency is a chief reason for the gap between oil revenues and improving living conditions. But another reason for the lag is a growing problem of income loss from smuggling and outright theft of the revenues.
One worrisome consequence of the inability to turn higher oil revenues into street-level improvements is the impact on the Iraqi public's faith in the country's new government and direction.
"The insurgents know that oil is the lifeblood of the Iraqi economy, and that keeping it from improving daily life is key to building up the frustration and sense of helplessness and lack of faith in the new government - all of which they are out to encourage," says Gal Luft, codirector of the Institute for the Analysis of Global Security in Washington. "Unfortunately, I don't see the government taking advantage of what should be a good time for an oil-producing country to make some money and move forward."
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http://www.csmonitor.com/2005/0714/p02s01-woiq.html