Steve Forbes’ Iraqi solution

At Always On, Steve Forbes is on the platform with Roger McNamee and he’s asked what he’d do in Iraq if he were president. One of his recommendations is they should install the Alaskan system of paying all citizens a cut of oil revenue and then everyone would have an address and would look dimly at those who are trying to disrupt oil production.

  • thedude

    Well that defeats the purpose of the invasion. How is the US suppose to loot the country without complete chaos and a disorganized population. Anything that doesn’t lead to more chaos is a non-starter.

  • dan

    Instapundit has been arguing for this –the term he used is ‘oil trust’– since 2003. Hillary also seems to support this idea. It makes a lot of sense.

  • wag

    Hey I’ve got an idea – why don’t we let the Iraqis decide? Why should the opinion of people thousands of miles away matter, anyway?

  • Angelos

    I’m not sure Halliburton would go for this.

  • Well, we’re spending $100 billion a year on the occupation. Before we invaded their total GDP was $22 billion. I know! We could (sort of) split the difference and just distribute $44 billion, to be distributed evenly to all Iraqis. We’d triple their GDP (assuming that they still had $22 billion of economic activity regardless of what we did) and cut our expenses by more than half. We’d leave, they’d be rich, we’d feel rich, and they would love us. It has to be at least as sensible as Bush’s original plan.

  • Except that it would not work in Iraq. First, there would not be enough income for everyone; second, the state would be left with no budget, as Iraqi economy is almost completely dependent on oil revenue; and third, given the nature of Iraqi society, people would have very little incentive to work.

  • mrbill

    1. If we wanted the damn oil, we would BUY it , just as we do everywhere else.

    2. Why dont they raise taxes, just as the Dems do. That always helps the economy.

  • Zeyad, I think you are looking at this solution based too much on the current situation. The goal of revenue sharing like this in the short-term is to generate a common interest in keeping the oil industry going. As production rises above current levels, there would be more export earnings both to support a fund for citizens, and to support the government. Payouts in the early years could be structured to incorporate current conditions — perhaps they would be higher in the short-term since there is so little other industry.

    The Alaskan fund does pays out some money to citizens each year, some money to support the government, and also invests the majority in assets that help diversify the Alaskan economy away from total reliance on oil prices. This diversification of revenue streams would be another benefit of the Alaskan approach in Iraq.

    I think there are also potential benefits of sharing revenue in stabilizing federal/provincial frictions.

    I’m sure there would be problems in the beginning. After all, oil smugglers make much more by stealing oil than they would under a revenue sharing plan. However, more citizens would be upset by the smuggling than is now the case, and this might be enough to help curb the practice. Are any readers aware of other countries where revenue sharing has been implemented after widespread smuggling was already present and successfully eliminated it?

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  • Steve OOOOOO

    Ya know, on the surface it sounds crazy, BUT, when you think about it… It kinda makes alot of sense. Give people a stake in their own country, radical isn’t it. Just like giving them stock, if they do good they get more csah, if they have fighting and destruction, they get less. You take away some of the power of the trouble making leaders and bypass the lets split up the booty by sect types who are never gonna give it to the pople anyway. Every person needs to have a name, sitizenship and an address. This way it does get split up via the ethnic factions, just directly to them not a crooked politician. I get a direct stake and I want my money not to be screwed with because I need it to live and grow mt family and life, so cut out the shit and lets get to bussiness…
    Great idea.

  • Cover Me, Porkins

    Zeyad, it’s a little premature to arrive at those conclusions about your country when Iraq has spent the last eighty years as either a kleptocracy or a command economy. Give the policies of the Ministry of Finance several years to work.

  • Aaron

    I think Zeyad is thinking about that math.

    In Alaska there are few people but lots of oil, and thus each person gets a juicy check.

    In Iraq, while there is a lot of oil, there are also a lot of peopel…20 million plus. Thus there might not be enough to spread around…

    “Iraqi economy is almost completely dependent on oil revenue”

    The revenue would still exist, but instead of being in the hands of the government, the people can spend it as they see fit. In fact, it can often do more good in the hands of the people than in the hands of kleptocratic government, no?

    “and third, given the nature of Iraqi society, people would have very little incentive to work.”

    This is true – and that means less people joining the police or the army.

  • thedude

    The oil has been and is being sold off to large oil corporations. The oil will NOT be in the publics hands. The Forbes idea makes perfect sense to those who want to solve the problem as they see the problem, but to those who decided to invade the “problem” was how to get the oil into private hands. Bush was right all along, mission accomplished. Cause chaos, dress it up as a fight against terrorism and in that chaos loot the country of its wealth. Check, check, check.

  • John

    >>> The oil has been and is being sold off to large oil corporations. The oil will NOT be in the publics hands

    How is it that people can get away with making such retarded statements with absolutely no facts to back them up? How is it that a poster above can simply say we’re there to “loot” the country? I swear, most Democrats under the age of 40 think that if they think something, it must be true.

    Don’t believe everything you think. You will eventually grow up and realize how stupid and wrong you are.

  • thedude
    This harpers work is very good.

    Also do a little research on the Cheney’s energy task force for timeline issues.
    If your definition of growing up is believing propaganda and avoiding difficult truths then I’m glad I avoided the head in the sand like self delusion.
    How can one continue to argue we’re there to help the iraqie people and find WMD? The results on the ground speak louder then the retoric. Fact. There are no WMD. Fact. The war is still raging. Fact. We haven’t left them with a democracy. Fact. We have sold much of there oil interests to corporations. Why do YOU contine to believe the propaganda coming out of the WH when the facts don’t match the retoric?

  • Reality-based Democrat

    Since I’m an upper middle class democrat, I’ll bet $500 that John will never read the articles that thedude just linked.

    But they are excellent, well-sourced, and well-researched. And they make clear that the Bushies’ agenda in Iraq was a fantasy about how everything would be better if they could just place all assets in Iraq in the hands of private corporations – including the oil wealth.

  • Another View
  • Eric

    You know, thedude, I read the Harper’s article linked above, and Naomi Klein (hm, you think she might be a *tiny* bit biased?) specifically says that the oil revenues have NOT been sold off yet. I guess that you (a) hadn’t actually read the article, or (b) wasn’t expecting people to check your references. Your global policy article also doesn’t say what you say it does, either.

  • John F.

    Keep pulling that head, Dude, you’re not there yet! At the risk of staying on-topic, let me point out that the idea of an oil trust administered at the level of regional governments has been under serious discussion for quite a while. [Forbes’ idea is probably too good to ever be implemented.] Let me further point out that the Evil Oil Companies are the only ones who know how to reliably extract the oil from the ground. Once decent infrastructure is established and the oil pie enlarged, sovereign countries have all kinds of options for trying to make sure they have what they think is their fair share. But depending on what you have in mind, ask Mexico, Venezuela, or Iran how that nationalization stuff is working out for them. To go off-topic for a second, the most positive by-product of the Iraq war has been to get the oil OUT of Saddam’s hands.

  • thedude

    Wow such aggressive arrogance. From an Iraqie perception all your saying is “only the west knows how to drill. Trust us.” You wonder why they’re fighting back.

    production sharing agreements (if the company was owned by iraqies this might not be so bad for them, but its not) Never forget they didn’t ask us to invade you can’t turn around and charge them to rebuild.
    PSAs in summary:

    * A contract between a multinational oil company and a host government, in which the corporation provides capital investment, in exchange for control over an oilfield, and access to a large share of the revenues from it
    * Lasting usually 25-40 years – and sometimes even indefinite.
    * A change of language, describing the state as “owner” and the foreign company as “contractor”, but in practice mostly equivalent to the old-style concession agreements.
    * Precise terms depend on negotiation between state and company.
    * Often contains “stablisation clause”, which restricts future governments’ ability to change tax rates or pass any new law which affects the company’s profits.

  • John F.

    Dude: I’m so glad you’re here to educate us on the Iraqi perspective. I hope you understand the difference between provision of oil services (such as exploration and drilling) and the ownership of drilling rights and revenue streams. I encourage you to take a look at who provides these services for what countries and see if there’s any correlation to the health of their oil industries. I also hope you understand the difference between an informed opinion and received wisdom. Keep trying. You’re still young (I think).

  • I thought this would be a good idea for Afghanistan, if the pipeline from Kazakhstan to Pakistan is ever built. This would leave all those alarmed by the pipeline idea burdened with explaining why, exactly, they prefer to keep the country impoverished.

  • Eddy

    It’s not Steven Forbes problem and anyway, that will not be the best solution for a divided nation like Iraq where people of different sects are looking only after their own tribe interest instead of the nation

  • Brian Lewis

    100% agree with Steve Forbes “Alaskan Solution” for Iraq oil problems.
    Why can’t we push for these kind of solutions where evryone benefits. The split of revenue should be A) Fund for per head payouts on a quarterly basis. B) fund to cover infrastucture needs, i.e, Electricity, water and transportation. C) Invite Oil Companies to participate but require they must contribute a percentage of their anticipated profits to immediate reconstruction of Refineries, Pipelines and exploration equipment. D) A neutral group to oversee…Headed by George Mitchell!!