Iraqi oil minister: World Bank will eliminate 21bill $ of debt, if we lift subsidies on oil products

[sabra]

http://www.iraqslogger.com/index.php/post/913/Mondays_Iraqi_Papers_Karbala_Not_So_Safe

<snip>

In an interesting report, Az-Zaman quoted the Iraqi oil minister as saying that the World Bank is pressuring the Iraqi government to lift subsidies on oil products in Iraq. The Iraqi daily said that Husain al-Shahrastani, Iraq’s oil minister, stated in a press conference that the World Bank has made the lifting of government subsidies a condition for the elimination of 21 billion $ of Iraqi debts. Since the American invasion, The World Bank and US administrators have been trying to push for ‘free market’ reforms in Iraq, often translated in the privatization and abandonment of state institutions and the lowering of government subsidies, which many Iraqis see as harming the standard of living for the middle class. More importantly, the ‘liberalization’ of Iraq’s economy was chosen as a target by the US occupation from the days of Paul Bremer, these reforms were not the result of a democratic debate within Iraq, and many Iraqi experts and scholars (such as Kamil Mahdi) have criticized these measures and warned against their long-term effects on the political and economic future of Iraq.

[Unperson]

1. This goes against my perceived world view.

The Iraq is not about the oil.:sarcasm:

[Strelnikov_]

2. Which means less domestic consumption since very few could afford

the fuel.

Which means more available for export to the western economies.

Rationing by price, ain't it grand.

[sabra]

3. Iraq used to have the cheapest gas...

[ThomCat]

4. Of course, if we can't kill them then we'll deprive them.

We'll make sure they can't use their own oil, and we'll make sure they don't get any of the profit from the sale of that oil too.

[SanCristobal]

5. This isn't surprising, but probably necessary.

Saddam era subsidies left the Iraqi economy in shambles. Economic information was considered a state secret, and we didn't know how bad things were until we ended up trying to run them. It turns out the whole country was run on a shoestring budget and confusing maze of nonsensical subsidies which were about as effective as those of Soviet Russia.

Offering money for economic reform is what the World Bank does. If nations want the cash, they have to liberalize their economies. That usually means privatizing or ending subsidies. I'd be willing to gamble that Iraq will be better off getting rid of its debt and dropping the oil subsidies then trying to continue on the path it has been following.

[sabra]

6. what happens when the middle class can't afford to purchase gas?

Second, the WB is headed by Wolfowitz, who I doubt has the Iraqis best interest in mind..

[SanCristobal]

8. Why must that happen?

It's no surprise if Iraq's population is worried about losing oil subsidies, Iraq hasn't historically been a bastion of free market thinking. But leaving their economies hands tied with unworkable subsidies isn't going to help anyone in the long run. Iraq isn't exactly raking in the dough right now, and I'd say the Iraqi government has more important spending concerns to look towards then oil subsidies.

[Imagevision]

7. The World Bank as we all know is run by no other> Wolfowitz...

[MiniMe]

9. World Bank.....isn't that Wolfowicz?

What is he up to?