The vicious cycle

A report titled, Crude Designs: The rip off of Iraq's Oil Wealth has been released by American and British lobby groups that proclaims to have knowledge of ongoing negotiations between the current interim Iraqi government and oil companies ahead of next month's general elections in Iraq. The news breaks as the constitution of Iraq is being finalised and important clauses about trade and foreign investment are being inserted.

While the rest of Iraq could use foreign investment of any kind, the one area in which Iraq does not need any help is oil production and export. The report claims that American and British companies are looking to entrap Iraq into a tried and tested form of colonialism. They are looking to extract dividends between 42 and 192% over a standard contract of 25 to 40 years. This means that Iraqis stand to lose US $ 74-192 billion to foreign companies who are doing nothing more than working on oil extraction- this money could otherwise provide an impoverished nation like Iraq with economic stability. This calculation made in the report is also for a a price per barrel lower than the current rate of $60/barrel.

Many speculated that the war on Iraq in 2003 was about oil, and it seems that this speculation is soon to turn into reality. What is even more alarming is that Iraq is negotiating with oil companies ahead of the constitution's finalisation and the election of a new government. This means that not only are these companies dictating the law in many ways they are also safeguarding themselves against any new government that might look upon them unfavorably.

The group's report warns against serious oversight on the interim Iraqi government's part and calls upon the citizens of Iraq and the world to voice their displeasure at the actions of British and American oil companies, not to mention their respective governments which have given silent blessings to (indeed, provided a platform for) such foreign investment deals.