Dispatch: Iraq’s New Government

After eight months of excruciatingly complex and drawn out negotiations at both the intra and intercommunal level, the Iraqi factions have finally agreed upon some semblance of a preliminary government. The ongoing lengthy process underscores the extent of influence Iran enjoys in its western neighbor and the fact that this is not your normal jockeying for power that one sees in most countries after an election.

What we have here is a very preliminary form of government emerging as a result of negotiations between the various factions. Today’s session of parliament elected a speaker and his two deputies. The speaker is a Sunni which was the case in the outgoing parliament, and he has two deputies one each from amongst the Shia and Kurdish communities.

In addition to the election of the speaker and the two deputy speakers the house also reelected President Jalal Talabani for another term. What is interesting here is that Jalal Talabiani was elected in two phases of voting and the Sunnis largely walked out of the session when that was taking place. So we enter into a new controversy in which the Sunnis feel betrayed by the Shiites and Kurds.

One of the most interesting and important points in this eight month saga since the election is how Iran was able to essentially checkmate the United States in the sense that the Sunni backed al-Iraqiyah block bagged the most seats in the March 7 election. Yet Iran was able to pull together both the two Shia block that came in second and third place to form a super Shia bloc and thereby claiming the right to form a government in which we now see in process.

In most countries there are democratic elections and then there’s this normal – if there is a hung parliament – is normal jockeying for power between those that bagged the most seats to cobble together a new government. In Iraq it’s much more than just a normal negotiations because essentially Iraqi is a new state. Post-Ba’athist Iraq does not have a lengthy tradition of elections or governments being formed. This is the second government since the overthrow of Saddam.

What’s significant about this new power sharing arrangement is for in the first time the Sunnis en masse were able to participate in elections and therefore pose a challenge to the domination of the system enjoyed by the Shia and Kurds thus far. What this shows is that every time there’s going to be an election for the foreseeable future, we’re going to be going through this same motion again because there is no underlying if you will understanding or formal power-sharing mechanism. It has to be built from scratch based on the results of the elections.
Source :- Stratfor

Iraqi leaders reach agreement on new government – Los Angeles Times

Incumbent Nouri Maliki appears headed to a second term as prime minister after his main rival, Iyad Allawi, accepts his terms for limited power-sharing. The deal will end an eight-month impasse.

By Ned Parker, Los Angeles Times

November 11, 2010

Reporting from Baghdad

Iraqi Prime Minister Nouri Maliki appeared to lock up a second term in office Wednesday after a lengthy closed-door meeting of Iraq’s political elite in which foes buckled to his demands for ending a dangerous eight-month impasse and forming a new government.

It was stunning victory for the Shiite Islamist, who was plucked from obscurity four years ago to become prime minister during the worst of Iraq’s sectarian violence, and a success for Iran. But it was a strategic defeat for Washington, which had pressed for a prominent role for Maliki’s rival, and appeared to be caught flatfooted by the rapid developments.

Maliki has mastered Iraq’s levers of power in Iraq to become a figure admired and feared by supporters and opponents alike. Wednesday’s marathon meeting, which started around 4 p.m. and lasted almost seven hours, fitted the Maliki mold.

Holding fast during months of uncertainty, he wore down the opposition, who initially had refused to agree to his terms for a parliament session Thursday that would pick a speaker and a three-man presidency board, who would then nominate Maliki for a new term and authorize him to assemble his Cabinet.

Iraq has been without a new government since March elections in which Maliki’s slate of candidates came in second to that of secular Shiite candidate Iyad Allawi. As politicians maneuvered for position and U.S. combat troops withdrew, the country saw violence increase and Iraqis become increasingly fearful of a return to widespread sectarian strife.

The United States had lobbied hard for Iraqiya to have a central role in the next government, and in recent days had pushed hard for Allawi to be given the post of president, according to Iraqiya and Kurdish officials.

Instead, the alliance of Maliki and the incumbent president, Jalal Talabani, a Kurd, triumphed. It creates a scenario where a Shiite religious party and a Kurdish leader hold the main posts in Baghdad, and Iraq’s Sunni Arab minority is once more relegated to a secondary role, not unlike that under the polarized government Maliki took control of four years ago.

“If things actually happen as just announced, it would indeed appear to be a victory for Maliki and for Iran, which pushed this scenario forward,” said Iraq expert Joost Hiltermann of the International Crisis Group think tank. “On the face of it, it looks like the new government could become a retread of the government of the past four years, with its uneven representation and multiple deficits.”

Until the last moment, Allawi had vowed that his Iraqiya list would never participate in a government that did not guarantee an equal distribution of power and limit the prime minister’s powers. But one member said the group became concerned about splits within its own ranks.

Allawi stunned even some of his own supporters shortly after he left Wednesday’s meeting in frustration by reversing himself and accept the incumbent’s terms.

Iraqiya agreed to accept the post of parliament speaker and the chair of a new government body, called the National Council for Strategic Policy, which has yet to be given any defined powers. Some observers wondered if Iraqiya might still change its mind. The alliance of Allawi, Sunnis and secular politicians is fractious, and many of its prominent figures have their own personal ambitions.

But officials from Iraqiya sounded shocked and defeated after waging an eight-month battle against Maliki over who had the right to form the next government.

“There was no choice,” one Iraqiya official said, at the end of the long night. Iraqiya was expected to name its candidate for parliament speaker before the Thursday legislative session.

Maliki’s supporters described deals brokered prior to Wednesday night, particularly the prime minister’s alliance with anti-U.S. Shiite Muslim cleric Muqtada Sadr, as a victory for Tehran, but emphasized that Maliki did not take orders from anyone.

“The Americans lost that battle to the Iranians,” said Izzat Shahbandar, a Maliki supporter and advisor. “But the Iranians didn’t win with Maliki.”

In Washington, a State Department official declined to comment on the developments, and noted that “there are some procedural steps that need to be completed before a new government is formed.”

“We’ve encouraged the Iraqis to have an inclusive government; we’ll wait and see if this will be one,” said the official, who declined to be identified because of the sensitivity of the subject.

Supporters hail Maliki for rescuing his country from a civil war, while critics call him the lucky beneficiary of two developments that reduced violence: an increase in U.S. troops and a revolt against Al Qaeda in Iraq by Sunni Arabs.

Regardless, Maliki has proven himself a tenacious survivor – one with admirers who say he is the only man who can save Iraq, and critics who view him as a divisive figure. They accuse him of being motivated by a wish for his Islamic Dawa Party to stay in power no matter what the cost, and warn another four years under him could see the creation of a one-party state.

Maliki’s former national security advisor, former Dawa member Mowaffak Rubaie, voiced apprehension about the country’s direction in the days before the announcement.

“I personally am worried that our whole political program is going down the drain,” he said. “What did we come for? I campaigned for three things throughout my life: democracy, federalism-community rights and human rights,” Rubaie said. “The Shia are enjoying our community rights but we are persecuting the other community. We are getting closer and closer to a one-party state.”

Maliki’s supporters had predicted his victory in the countdown to Wednesday’s meeting. Sami Askari, a lawmaker and advisor to Maliki, had predicted Iraqiya would come around. “It’s too late,” he said. “They will join the government.”

Last week, before three days of meetings hosted by another Kurdish leader, Massoud Barzani, one senior Western diplomat had said that Iraqi politicians appeared to be close to a deal after months of impasse.

Barzani has had a contentious relationship with Maliki and had wanted guarantees that there would be limits on the prime minister’s power. But the diplomat observed that principles appeared to have gone by the wayside as politicians focused on their personal ambitions.

“It’s become a souk now,” said the diplomat. “What are you selling? What is the price?”

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Iraq To Match Iran’s Oil Output By Around 2015 – IEA

By Benoit Faucon

Published November 09, 2010

Dow Jones Newswires

LONDON -(Dow Jones)- The International Energy Agency said Tuesday that Iraq’s oil output will catch up with that of regional rival Iran by around 2015 but won’t hit the country’s ambitious targets, sending a mixed message on Iraq’s ambitious plans despite a reassessment of reserves.

In its annual outlook report, the IEA–which represents some of the world’s largest energy consumers–said Iraq’s crude output will be “catching up with Iran by around 2015.”

But it also forecasts oil output in Iraq at 7 million barrels a day by 2035, compared with about 2 million barrels a day at present.  That assessment is considerably lower than the country’s plan to grow production to 10 million-12 million barrels a day by 2017.

The IEA’s forecast comes amid skepticism over the Middle East nation’s plans to boost its output.

The International Monetary Fund in October said it had lowered Iraq’s oil production forecast, after a disappointing 2010.  The IMF report lowered Iraq’s projected 2012 oil production to 2.6 million barrels a day, from 3.1 million barrels a day in February.

The IMF reassessment came despite Iraq raising its proven oil reserves by around a quarter to 143.1 billion barrels in early October.

Copyright © 2010 Dow Jones Newswires

Iraq: Nov. 11 Founding Of Iraqi State – PM

November 10, 2010

Iraqi Prime Minister Nouri al-Maliki said that the Nov. 11 parliamentary session will be the beginning of the founding of the Iraqi state, not just the Iraqi government, Alsumaria News reported Nov. 10. Speaking in the National Alliance conference, al-Maliki said the new session undermines a months-long conspiracy against the new government, adding that some elected officials were hypocrites who wanted to be part of the government while still supporting terrorism. He said such officials are not partners in the newly founded state, but benefit from the state without adhering to any rules.

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Statement on Iraqi Dinar Zero Lopping

There has been a lot of speculation recently causing plenty of confusion about the deletion of three zeros from the Iraqi currency , our belief is that it is purely speculation and until there is a definitive announcement from the Iraqi Central Bank we will continue to consider it pure speculation .

I discussed this with a leading banker in Iraq and I include a partial quote from him regards this matter which re-inforces my statement above :-

Dear IraqiDinars,


The revalue as of today remains a market speculation which the entire Iraqi banking industry considers null and void as the CBI has not made a move, decision or issued an official notice to Iraqi Banks regarding this matter.


The CBI has not provided official written notification to the banking sector and banks regarding the revalue or printing of new currency thus it is considered null and void by the Iraqi banking sector and this is the general law noting that we contacted the CBI regarding this matter where they did not provide anything official to comment on simply stating that this matter is under study and has been so for the past few years nothing more nothing less.


From our prospective we can not comment and will not comment any further unless the CBI officially announces that the removing of the 3 zeros or revaluation will actually take place by providing the banking sector written documentation where this would be the standard general verification and confirmation currently practiced.


Best regards,


(omitted for security reasons)