Oil, Sunnis, and the Iraqi Constitution

Although what the draft text says, exactly, is somewhat unclear, I have big concerns about one reported issue in Iraq's constitution -- how oil revenue is to be distributed.

Oil accounts for 98% of Iraq's export earnings. When foreign aid starts to dry up in a few years, it will be Iraq's only real source of hard currency.

According to press reports about the draft, and somewhat ambiguous language in the draft constitution itself, the Kurds and Shia have agreed that revenue from existing oil wells is to be shared nationally, but earnings from new wells will accrue to whichever regional government develops the well in question.

This is a big problem. For one thing, it invites gamesmanship. An old well can be modernized and redefined as new. Even if the Kurds and Shia are fair-minded about it, someday all wells in Iraq will be "new" relative to a 2005 starting point. At that time, what will be the economic basis of the Iraqi state? Even more to the point, what will be the economic basis of any Sunni Arab rump state?

Realizing how badly their interests are being protected, Sunni Arabs -- already the core of the insurgency -- will likely step up their resistance. At a minimum they will probably "veto" the constitution in the October referendum.

Iraq's international friends need to pressure the Kurds and Shia to change this provision, or to clarify that new wells will be treated the same as the old ones.