Iraq is a Mass of Contradictions; Oil is at Their Center

Iraq's government is in the eye of a storm of deadlines and benchmarks and pressure from within and abroad. At some level, it's all about the oil.

The Parliament is to take next month off as key parties criticize the government and vow to withdraw. Washington, dragged by the Democratic Party, is looking for success or troop withdrawal. Iraq's citizens face more violence and poverty and less electricity and fuels.

"We are still struggling to find a political resolution on a whole number of issues," Iraqi Ambassador to the United States Samir Sumaida'ie told reporters Wednesday during a briefing at the embassy. "We're still searching for a common vision that will help us to deal with critical issues such as the constitution and its amendments, Kirkuk, federalism and to the extent that it will be applied outside Kurdistan, applied or not applied outside a Kurdish area, oil law and revenue sharing."

All are linked, he said.

Iraq's constitution, passed in 2005, was vague on certain issues now being targeted for amendment, including control over oil.

The constitution called for a referendum on disputed northern territories by the end of next year, including the oil-rich city of Kirkuk. Iraq's Kurds claim the city and other territories belong in the Kurdistan Regional government's semi-autonomous region. Turkomen and Sunnis dispute it and the outcry over its fate has sparked talk of delaying the referendum, which the KRG refuses.

In Baghdad, parliamentarians are at a standstill over legislation splitting up revenue, most of which comes from the sale of oil, and a law governing the exploration and development of the crude. Iraq has 115 billion barrels of proven oil reserves, the third largest in the world, and last year sales of it funded more than 93 percent of the federal budget. Disputes over the oil rally around whether the central or regional/local government should control key oil fields. This dispute over federalism is inherent in the holdup of the revenue sharing law. More than four years after liberation from Saddam Hussein, the government of Iraq struggles to function.

"A gap still exists between the different parties and their way of looking at this," Sumaida'ie said. "Intensive effort is going on to try to resolve this."

Prime Minister Nouri al-Maliki's coalition government is weakening. The Iraqi Accordance Front, the largest Sunni bloc in the Shiite-dominated coalition (with a heavy Kurdish partnership), has issued a list of demands to be met. Maliki has one week or the bloc will withdraw its members. The Kuwait News Agency reports IAF leader and Iraqi Vice President Tarek al-Hashemi has submitted his resignation.

The Sadr Movement and Fadhila Party, two smaller Shiite parties with a large citizen support base, have already withdrawn from the coalition. The anti-Maliki sentiment is not solely related to his push for an oil law, but the law is a major lightning rod.

"The law is discussed in the Parliament and in the Parliament there are various groups and of course there are differences," Oil Minister Hussain al-Shahristani told UPI during a telephone interview from Baghdad Wednesday morning. "Like any other issue it will be debated and we try to close the gaps and reach compromises."

All signs point to a Parliament that leaves for August recess without approving the law.

President Bush is urging the government to reconcile their differences as the troop surge assessment is due to Congress Sept. 15.

Ken Katzman, Middle East specialist at the Congressional Research Service, said the fighting will subside "once there's a deal where there is an equilibrium of power and money."

"I believe there's a mathematical equation to the fighting," he said, "once they reach a stalemate on the battlefield, they will likely reach a political compromise."