052605.pdf
NEW YORK, May 26—Iraq's future peace and security depend on instituting constitutional safeguards that guarantee financial accountability and the equitable division of oil revenues, says a report by Iraq Revenue Watch, a project of the Open Society Institute.
Protecting the Future: Constitutional Safeguards for Iraq's Oil Revenues comes as the new Iraqi government prepares to draft the country's first permanent constitution since Saddam Hussein was ousted. The report urges lawmakers to protect against oil-sector corruption and mismanagement.
“Without such laws in place, ruling elites can evade financial accountability and divert resource revenues into their pockets, instead of supporting economic and human development,” said Cristina Posa, a lawyer at Manatt, Phelps & Phillips in New York who was Oxfam's Humanitarian Protection Advisor in Iraq in 2003 and a contributor to the report. “Iraq’s Parliament now has the opportunity to ensure that Iraq’s oil is used to benefit its people.”
The report also warns of civil conflict unless oil revenues are fairly distributed among Iraq’s ethnic and religious groups. In Iraq, rifts over oil revenues run deep, as Iraqi Kurds, Arabs, and Turkmen struggle for control of oil-rich Kirkuk.
Following the elections in January, the drafting of a permanent constitution remains the most significant challenge to establishing a democratic Iraq. Iraq's citizens are due to vote in referendum on the constitution on October 15.
Without constitutional provisions that protect its oil revenues, Iraq is likely to follow the path of so many other natural resource-rich nations that are dogged by corruption and bad governance. Most oil-dependent states have “ultra-presidential” governments, which enable the executive branch to use resource revenues as it sees fit.
Protecting the Future explores ways that Iraq can avoid this trap by embedding measures for accountability into the future Iraqi constitution. The report recommends provisions that make clear which agencies are responsible for the development and implementation of the Iraqi budget, and grant oversight of oil revenues to all branches of government—executive, legislative, and judicial.
“Saddam Hussein squandered the nation’s natural resources on unwinnable wars and lavish lifestyles for himself and his cronies,” said Posa. “With Saddam gone, Iraqis have reason to believe that their country’s wealth can provide them with a better life.
