That's encouraging
news. When it comes to stabilizing Iraqi society, however, the
microeconomics of the average Iraqi's pocketbook may trump the
macroeconomics of money in Baghdad's coffers.
Iraq, long
plundered by despots, should be a wealthy country. It has water,
an agricultural base, a source of capital (oil) and people willing
to work. It is the best place to begin to reform the dysfunctional
political systems that shackle and rob the vast majority of Middle
Easterners. Success in Iraq would create conditions to break the
region's endless cycle of robbery and violence. It would also
force angry Middle Eastern Muslims to finally confront the inadequacies
of their own societies, instead of blaming Europe, the United
States and Israel for their centuries of fossilization and decline.
Success
in Iraq means spreading wealth and curbing corruption. Iraq desperately
needs to become an ownership society, for economic stakeholders
are political stakeholders.
For three
years, Robert Miller of the ZOR Foundation has advocated establishing
an "Iraqi National Oil Trust," which shares oil profits
directly with Iraqi citizens. Miller, of Winter Springs, Fla.,
understands Iraq. In 1964, he graduated from Baghdad's Al Hikma
University.
At the UCF
conference, Miller said the state of Alaska's "oil trust"
is a good model, but Iraq pioneered the concept. In 1950, Iraq's
parliament created an autonomous board that dedicated oil revenues
to future economic development. However, Miller said, "powerful
political interests at the time sought to control Iraq's oil wealth
for their own political purposes." The government altered
the program and placed control with the Ministry of Finance.
Miller would
establish a new "Iraqi National Oil Trust" by national
referendum -- meaning the trust could only be "changed or
undone by another national referendum." Miller's trust would
dedicate 50 percent of oil profits to national reconstruction,
20 percent to education (primary through university education)
and 10 percent to government administration. The other 20 percent
swells the personal pocketbooks of every adult registered voter
in Iraq. Based on 3 million-barrels-a-day production at $50 a
barrel, that guarantees every Iraqi adult about $680 a year.
Miller argued
that limiting the government's slice of oil revenues strengthens
democracy. The government must rely in part on taxes, instead
of petro-dollar largesse. This means the government must seek
public support for tax initiatives.
Miller pitched
this idea in the summer of 2003, and the Coalition Provisional
Authority expressed mild interest -- then passed on the idea.
This may prove to be another CPA mistake.
Lenny Glynn,
formerly with BusinessWeek and Institutional Investor,
has written extensively on the benefits of "oil trusts"
in Iraq. Glynn believes an oil trust is a way to escape the "state-centered
oil paternalism and public clientelism" that plagues petro-states.
Glynn, in an article last month for the Internet's Daily Standard,
wrote, "The precise institutional form that such a system
might take is less important than the principle that Iraq's natural
wealth should belong, by right, to its people."
Glynn added:
"If there is one thing that matches the universal appeal
of freedom, it's the universal appeal of money. A Freedom Trust
would marry Iraqis' hunger to breathe free, so heroically displayed
by their votes last January (2005), with the income and wealth-building
to enjoy their freedom."
Well said.
The Iraqi people need to put an oil trust referendum on their
next national ballot.
