Iraq arms itself, ‘Kurdistan’ develops economy

Iraq arms itself, ‘Kurdistan’ develops economy

Azerbaijan, Baku, Nov.16 / Trend /

Azer Ahmedbeyli, Trend analytical centre expert

Iraq is arming itself. Even if a deal worth $4.3 billion with Russia fails, it is still highly visible. It has contracts worth $ 11 billion with the U.S. and $2.5 billion with Ukraine. It also has the contracts with the countries of South-Eastern Europe.

Why does Baghdad need so many offensive weapons for? Even Turkey, having difficult relations with Baghdad, exported (frankly speaking defence industry goods) worth $31 million to Iraq for 10 months of this year compared to $1 million in the same period of 2011. All comments of Internet users concerning the reports about Iraq's arms purchases are the same. Why does the country need so many weapons? Is it not better to spend the huge amounts of money for reconstruction and development of the economy, construction of industrial facilities and infrastructure?

Various variants of the answer to this question are being discussed in social networks and blogs. In particular, the situation that may arise in Syria in the case of Bashar Al- Assad's regime falling and which will be fraught with inter-tribal chaos resembling post-Saddam Iraq. The danger to Baghdad's Shiite government is that radical Sunni groups are likely to come to power in Syria, which can then ignite a new sectarian conflict in Iraq. The bloggers remind us that today over a million Iraqi Sunnis live in Syria who fled there from persecution because of sectarian clashes in Iraq in 2005-2007, and they can play a role in returning the positions which Sunnis had during Saddam's leadership, including ruling the country.

There are other suggestions why Iraq is so heavily armed. The Turkish version based on Iraqi leaders' statements about the time to stop Turkish aircraft flying over Iraqi northern provinces and to cancel the mandate to hold Turkish Armed Forces military operations against PKK militants in Iraqi border regions with Turkey is being discussed.

There are also comments that the purchasing of arms is connected with the rise of nationalism in the country and that Iraq is trying to regain its status as a formidable regional power. All its neighbors feared it.

There are statements on countering Israel's Zionist regime whereby aircraft will allegedly refuel in the air over Iraq's territory to reach Iran's nuclear facilities.

However, there is a problem disturbing the al-Maliki's government most of all.

Around one-third of Iraq's oil is in the north of Iraq, in the Kurdish autonomy. According to various estimates, this hits 45-60 billion barrels.

President of the Kurdish autonomy Massoud Barzani is conducting an irreproachable policy from the point of view of the interests of the Kurdish people.

Some key elements can be included in a logical chain: establishing transparent and good conditions for attracting foreign investments and in particular in the development of oil and gas deposits, the oil companies' interest including the largest ones.

Also under consideration is the practical development and revenue - the contribution of income from oil in other areas of the economy and education and the expansion of economic relations with the outside world. Winning the reputation of a reliable partner is also important.

This can be confirmed by many examples. News is disseminated almost weekly that yet another company is interested in doing business with the Kurdish autonomy.

The latest news came from the UAE and Turkey a few days ago. Abu Dhabi's State Oil Company (UAE) TAQA is holding preliminary talks with the Iraqi Kurdish autonomy to buy a controlling package of shares in the General Exploration Partners consortium which is the operator of the Atrush oil field, Al-Quds Al-Arabi newspaper said.

The Turkish Genel Energy Company plans to acquire a 49 per cent stake in the Heritage Oil Company for the Miran gas field in Iraq's Kurdish autonomy, Zaman newspaper said. The deal value is estimated at $249 million. Gas reserves in the Miran field hit 150 million cubic meters. This is the largest gas field in Iraq.

According to Kurdish sources, the autonomous region now has about 450 large projects worth $21 billion, 21 per cent of which are funded at least partially through foreign direct investments. Around $7 billion is expected to be invested in the economy by Kurdish and foreign companies this year. Twenty countries including Arabic ones, have expressed an interest in cooperating and investing in the region.

Finally, ensuring security in the autonomy can also be included in the actions of the conducted policy.

This independent policy which became possible due to big oil revenues seems to greatly annoy Baghdad.

Petroleum Law, which is very important in removing mutual tension and delineating the powers of the parties, has not been adopted yet. Baghdad and Erbil cannot, or do not want to compromise, but time is in the Kurds' favour. Baghdad still could not oppose anything in return, except ultimatums with threats of imposing sanctions against the oil companies of American, Turkey and Russia, have decided to begin working on the autonomy without the permission of the Iraqi government.

The central government cannot find effective mechanisms to influence the on-going processes, considering them as a threat to its interests. It also feels that the Iraqi Kurdish autonomy's full independence may become the result of these processes in the future.

However apparently, Baghdad does not intend to bear with it. Seeing no other way out, Baghdad is being armed in an attempt to resort to the old, tried and tested method called 'threat by using force'.

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