The recent hydrocarbon law, approved after much wrangling by Iraq's council of ministers, deserves a great deal more praise than it has been receiving. For one thing, it abolishes the economic rationale for dictatorship in Iraq. For another, it was arrived at by a process of parley and bargain that, while still in its infancy, demonstrates the possibility of a cooperative future. For still another, it shames the oil policy of Iraq's neighbors and reinforces the idea that a democracy in Baghdad could still teach a few regional lessons.
To illustrate my point by contrast: Can you easily imagine the Saudi government allocating oil revenues so as to give a fair share to the ground-down and despised Shiite workers who toil, for the most part, in the oil fields of the eastern region of the country? * Or picture the Shiite dictatorship in Iran giving a fair shake to the Arab-speaking area of Khuzestan, let alone to the 10 percent of Iranians who are both Sunni and Kurdish? To ask these questions is to answer them. Control over the production and distribution of oil is the decisive factor in defining who rules whom in the Middle East.
The Saddam Hussein dictatorship, with its record of mass murder against Shiites and Kurds, can be explained partly by a Baathist ideology that subordinated everything to the leader and to the state. But—without wishing to be overly Marxist on the point—I would argue that it was also determined by an economic imperative. The Sunni minority, and especially the Tikriti minority of that minority, lived in areas of Iraq where oil was relatively scarce. In order for it to exert control over the country's chief national resource, it had by definition to act as an almost colonial power in the Kurdish and Shiite provinces, with results that are well-known. (It also had to invade and annex Kuwait to make up the huge self-inflicted deficit created by its invasion of Iranian Khuzestan.)
But there is, in fact, enough and more than enough oil for everybody in Iraq. And important new fields are being prospected all the time, most notably and recently in the Anbar province, where al-Qaida forces have been making their strongest challenge. Here, as across much of the rest of the country, the visitor stands amazed at the sheer abject poverty and misery of people who are living in what is potentially one of the richest countries on earth. Iraq has the third-largest oil reserves of any nation, and that's if you take the lowest estimate of its reserves. Its oil is of purer quality, and nearer to the surface, than that of many of its rivals. A dusty and hopeless city like today's Basra could be, as one minister told me excitedly last December in Baghdad, "as rich as Kuwait in five years." The new law proposes a federalized control over oil and gas, with a distribution of revenue that would be in proportion to the population of each province. To put it another way: The very element that greased the weaponry of dictatorship and aggression could, with a certain amount of nurturing, become the economic basis of a federal democracy. I must say that it sounds worth trying.
On the left and in the anti-war camp, the very mention of the word "oil" is usually considered profane: a Brechtian clue to the secret designs of neoconservatives. So, I was interested to see Christian Parenti, a staunch foe of the Bush policy in Iraq, saying in the March 19 Nation that "on key questions of foreign investment and regional decentralization versus centralized control, the law is vague but not all bad." What have Iraqis got to lose here? It's not as if a withdrawal of foreign investment would leave the oil as a trusteeship for the people. Remember that Iraq under Saddam had already seen the most extreme form of "privatization," with the whole industry a private fiefdom of a parasitic elite. Remember that no real investment was made in the oil fields for almost 20 years, so that when experts visited the refineries after 2003, they could not (in the words of one I spoke to) "find anywhere even to put a Band-Aid." Remember that the Baathists used the "oil for food" program to sow corruption throughout the United Nations. Remember that Saddam Hussein set fire to the Kuwaiti fields and also ordered the taps opened so that crude oil would flow straight into the seawater of the Gulf, destroying the marine habitat. After all that, even Halliburton must come as a blessed relief.
Of course, all this is still heavily overshadowed by the daily menace of vicious jihadist sabotage, of corruption in a sectarian oil ministry, and of the generally parlous state of the infrastructure. And the deal has yet to be approved by the Iraqi parliament—a body that has some difficulty in meeting. Nonetheless, a principle is being established that does great credit to the Iraqis who signed it and to the coalition forces that made it possible. If it were not for the general American feeling that oil is a substance too dirty even to be mentioned in polite society, this consideration might even influence the current debate about an "exit strategy." One would like to know, of those who advocate leaving Iraq, whether they are happy to abandon the control of its fabulous wealth to be parceled out between the highest or most ruthless bidders—say, al-Qaida in Anbar, the Turks in the north, and the fans of Ahmadinejad in the south? Or might it be better to have even an imperfect federal democracy that could be based not just on ideals but on an actual material footing? A country that might, over time, undercut the power currently exerted by Saudi Arabia and Iran? I only ask. And it's no good chanting "no blood for oil" at me, because oil is the lifeblood here, and everybody knows it and always has.