EXT—Oil Key to Iraq’s Economy
Oil key to the Iraq economy.
GAO Reports 6/23/08 Congressional Quarterly “Progress Report: Some Gains Made, Updated Strategy Needed” Lexis [ev]
Crude Oil Output Has Consistently Fallen below U.S. Goals Providing essential services to all Iraqi areas and communities and helping Iraq maintain and expand its oil export are key goals of The New Way Forward. The oil sector is critical to Iraq`s economy, accounting for over half of Iraq`s gross domestic product and about 90 percent of its revenues. Iraq`s crude oil reserves, estimated at a total of 115 billion barrels, are the third largest in the world. After 5 years of effort and $2.7 billion in U.S. reconstruction funds, Iraqi crude oil output has improved for short periods but has consistently fallen below the U.S. goals of reaching an average crude oil production capacity of 3 million barrels per day and export levels of 2.2 mbpd40 (see figure 12).
Oil revenues are key to Iraqi gov’t reserves.
MENA English (Middle East and North Africa Financial Network) 5/28/08 “Iraq's inflation rate rises to 16% in April” Lexis [ev]
Iraq's inflation rate increased to 16 percent in April 2008 due to higher food and energy costs, however, it is still well below the rate recorded in 2007, Iraq Directory reported. Food prices rose by 13.6 percent while medical services, including medicines, had increased by 1.3 percent in the month. Iraq's economy is heavily dependent on its oil exports, which have brought much-needed money to government reserves.
The Iraqi economy is entirely based on oil.
John A Simourian CEO of Lily Transportation Corp. 5/18/08 The Boston Herald “OP-ED; Oil must fuel policy in Iraq” Lexis [ev]
** Oil is Iraq's major economic asset (95 percent of its gross domestic product). Iraq contains 112 billion barrels of proven oil reserves, the second largest in the world behind Saudi Arabia, along with roughly 220 billion barrels of probable reserves.
Iraqi Collapse Spills Over to the entire region
Iraqi collapse spillover to the entire region
Los Angeles Times, February 21, 2007, “Is iraq turning into a Yugoslovia?” http://www.latimes.com/news/printedition/asection/la-oe-boot21feb21,1,2780392.column
Finally, Byman and Pollack write, “the problems created by these other forms of spillover often provoke neighboring states to intervene—to stop terrorism as Israel tried repeatedly in Lebanon, to halt the flow of refugees as the Europeans tried in Yugoslavia, or to end (or respond to) the radicalization of their own population as Syria did in Lebanon.... The result is that many civil wars become regional wars.”
As Byman and Pollack note, “Iraq has all the earmarks of creating quite severe spillover problems.” This is, after all, a state with something worth fighting for (oil), and one where all the major combatants (various Sunni, Shiite and Kurd groups) are amply represented in neighboring countries. Iraq’s potential as a breeding ground for terrorism is even greater than Lebanon’s or Afghanistan’s.
Iraqi collapse would drag in its negibros ranging form Iran to Saudia Arabia.
Washington Times, February 4, 2007. “Capitulation and ‘spillover’” http://www.washtimes.com/news/2007/feb/04/20070204-101330-5758r/
The authors, Brookings scholars Kenneth Pollack and Daniel Byman, examined civil wars in countries such as the former Yugoslavia, Rwanda, Congo, Chechnya, Afghanistan and Lebanon. "Without question, a wider Iraqi civil war would be a humanitarian nightmare," they concluded. "Based on the experiences of other recent major civil wars we should expect many hundreds of thousands or even millions of people to die with three to four times that number wounded." Large outflows of Shi'ite refugees could change the political balance in Kuwait, destabilizing that government. And there is every possibility that Iraq's neighbors, ranging from Iran and Syria to Saudi Arabia, Jordan and Turkey, a NATO ally, could be dragged in. The genocide of 800,000 to 1 million Rwandan Tutsi tribesman drew neighboring states like Uganda and Angola into that conflict, which eventually spread to Congo, where civil war continues to this day.
Ext—Iraq Conflict Spills over
Instability spills over—ethnic factions will rise up to create their own regimes.
Robin Wright Diplomatic Correspondent for the Washington Post, Author of Dreams and Shadows, the future of the Middle East, 4/24/08 American Morning 8 AM EST “Tragic Milestone Reached in Iraq Overnight; Olympic Torch Begins Journey to China; Search for Missing Crew Member,” Lexis [ev]
Iran clearly is the winner out of the U.S. invasion of Iraq. It has greater influence now. In part because of this long war, bloodies modern Middle East conflict between 1980 and 1988, there is an interest in seeing a friendly government in Baghdad. I think the Iranians want to ensure that continues. But they also have their own larger Kurdish and Sunni populations and any instability in Iraq will clearly spill over into Iran. So, it has a vested interest in seeing some kind of stability in Iraq as well.
Ethnic factions guarantee spread of instability.
Turkish Daily News 4/19/08 “US-Led Invasion Strengthens Iran” Lexis [ev]
Ozdag argued that in the long-term, Turkey may well be the "worst-hit country" by the invasion. "For the threats against Turkey's unity that have arisen [as a result of the war] are complex and multi-dimensional. If Iraq falls apart, the consequent instability will first affect Syria but then spread to Turkey." Iran is the only one in the region that can minimize negative effects, as it has the "Shiite card" to balance the equation, Ozdag said. And in any assessment of the possible spinoffs of creation of a formal Kurdish statein northern Iraq, Iran is better poised to resist a Kurdish state that Turkey, he argued.
World leaders agree that Iraqi stability is key to the region.
Deutsche Presse-Agentur 5/29/08 “REFILE(eca208): 2ND ROUNDUP: UN review conference boosts Iraq” Lexis [ev]
"Stability in Iraq is stability for the region, and any instability in Iraq will affect the region as a whole," Iranian Foreign Minister Manouchehr Mottaki told reporters on the sidelines, adding that Iran was cooperating with Iraq on energy and other areas. On opening the conference, Swedish Prime Minister Fredrik Reinfeldt underlined the importance that neighbouring countries have had in hosting the flow of refugees from Iraq, and cited the need to let "the UN take the lead in our engagement with Iraq." Several speakers including Swedish Foreign Minister Carl Bildt and British Foreign Secretary David Miliband observed that delegates at the meeting had focused on "looking forward" rather than dwelling on the past five years at a conference dealing with Iraq. Shortly before the opening of the conference, Reinfeldt met with Rice, who cited progress in terms of security in Iraq.
Collapse of Iraq Fuels Terrorism and Regional Wars
Iraqi collapse incentivizes spillover terrorism and attracts regional countries
Daniel L. Byman, Senior Fellow, Foreign Policy, Saban Center for Middle East Policy
Kenneth M. Pollack, Director of Research, Saban Center for Middle East Policy, May-June 2007. “Keeping the lid on Iraq’s civil wars” http://www.brookings.edu/articles/2007/05iraq_byman.aspx
The collapse of Iraq into all-out civil war would mean more than just a humanitarian tragedy that could easily claim hundreds of thousands of Iraqi lives and produce millions of refugees. Such a conflict is unlikely to contain itself. In other similar cases of all-out civil war the resulting spillover has fostered terrorism, created refugee flows that can destabilize the entire neighborhood, radicalized the populations of surrounding states and even sparked civil wars in other, neighboring states or transformed domestic strife into regional war.
Terrorists frequently find a home in states in civil war, as Al-Qaeda did in Afghanistan. However, civil wars just as often breed new terrorist groups-Hizballah, the Palestine Liberation Organization, the Salafist Group for Preaching and Combat of Algeria, and the Tamil Tigers were all born of civil wars. Many such groups start by focusing on local targets but then shift to international attacks-starting with those they believe are aiding their enemies in the civil war. This process is already underway in Iraq; the 2005 hotel bombings in Amman, Jordan were organized from Iraqi territory. Iraq-based groups are also inspiring others to emulate their targets and tactics. As they regularly do in Iraq, jihadist terrorists have tried to strike Saudi Arabia's oil infrastructure, a switch from the jihadists' past avoidance of oil targets. Moreover, their Improvised Explosive Device technologies are showing up in Afghanistan.1 Suicide bombing, heretofore largely unknown in Afghanistan, is also now a regular occurrence, with the Iraq struggle providing a model to jihadists in Al-Qaeda's former home.
In turn, an ongoing civil war can contribute to the radicalization of populations in neighboring countries. Already, the war has heightened Shi'a-Sunni tension throughout the Middle East. In March 2006, after Sunni jihadists bombed the Shi'i Askariya Shrine in the northern Iraqi city of Samarra, over 100,000 Bahraini Shi'a took to the streets in anger. Bahraini Shi'a are simultaneously horrified at the suffering of their co-religionists in Iraq and emboldened by their political successes. As one Bahraini Shi'a politician noted, "Whenever things in Iraq go haywire, it reflects here."2
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