Jan 7, 2004

U.S. SUPPORTS STATE-OWNED OIL INDUSTRY FOR IRAQ

by Liberty and Power

I suppose Dubya’s whiz kids in Iraq will soon be favorably quoting the works of Sidney and Beatrice Webb. From today’s Wall Street Journal :

"U.S. advisers and Iraqi oil officials, now studying how to organize Iraq's vast but dilapidated oil industry, are leaning heavily toward recommending the formation of a large state-run petroleum company. If adopted, the move could sharply curtail the role of international oil corporations for years.

Officials of the U.S.-led occupation have been pushing liberalization in most parts of the Iraqi economy. But in the politically sensitive oil sector, occupation advisers say they strongly support establishing a state-owned company similar to those in neighboring Saudi Arabia and Kuwait.

U.S. and Iraqi oil officials say they believe such a model can attract the massive foreign investment the industry needs. But international companies have been stymied by other state-controlled oil producers in the region, where political sensitivities about foreign interference in the oil sector have kept them out."

More Comments:

Oscar Chamberlain - 1/8/2004

Politically, it would have been insane not to use a state-run oil company. Direct foreign control would be seen by many as confirming the charge that the US went in for the oil.

However, that begs the question of whether we should be imposing any economic model, whether liberal or Beatrice Web socialism.

From a practical political standpoint, imposing economic reforms makes us the villains whenever these reforms don't work.

From the standpoint of principle, I think respect for self-determination is more important. And self-determination must include the right to be wrong.