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Weekly UpdatesThe Shi'ite-led government of Iraq is trying to re-assert central control by uniting communities in Baghdad, which for centuries used to be the capital of the Sunni-led Muslim world and in the post-Ottoman era became the capital of the Arabs. Under a new master-plan for the capital ordered in 2008, the remaking of this city means the most serious phase of Iraq's reconstruction may have begun. Baghdad will host the Arab League's 23rd summit conference in late March 2011.
Plans for the remaking of Baghdad already have begun attracting large delegations into this country from the Western powers, with one from Britain having arrived in the capital on April 7 under Minister Peter Mandelson. In turn, Western powers have invited Iraqi delegations to visit them and present reconstruction opportunities.
A large Iraqi business delegation visited Paris more recently under the country's Shi'ite VP 'Adel 'Abdul-Mahdi, a fluent French speaker, and discussed a number of major projects. These include the giant Nahr 'Umr oilfield in which the French giant Total has been interested since the early 1990s. Total is hoping to win the technical support agreement (TSA) for developing of this field.
At the same time, the Shi'ite-led but shaky central government is embarked on tackling two huge problems:
1. A mountain of financial debts which has resulted from the behaviour of Saddam's Sunni/Ba'thist dictatorship since the 1980s, including its invasion of and brief occupation of Kuwait.
2. The behaviour of the Kurdistan Regional Government (KRG) in the oil-rich north which, among other things, has adopted an oil policy independent from that of Baghdad and offering exploration and production sharing agreements (EPSAs) - while the central Oil Ministry has declared such deals null and void and wants the KRG to shift to 20-year TSAs based on service fees to international oil companies (IOCs).
The two problems are getting increasingly complicated and need urgent remedies for several reasons. The main one is the global recession caused by an unprecedented credit crunch which has hit the world and led to a collapse of crude oil prices (see omt16IranExprtApr20-09), with Iraq's 2009 budget considerably reduced (see Part 36 in ood3IraqDebt&KurdsMar16-09).
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