Liquid Freedom

November 11, 2004 2:34 PM

Liquid Freedom. "There is, in fact, a war-winning weapon close to hand that the Allawi government could use — with support from allies and from both Democrats and Republicans. This weapon could, at a stroke, put flesh on the bones of formal democracy, change the dynamic of the insurgency, begin to win the confidence of the Iraqi people and create a powerful, growing force for stability, national unity and economic development. The weapon, of course, is oil — and the huge flows of cash it generates." Lenny Glynn suggests an Iraqi People's Freedom Trust modeled after the Alaska Permanant Fund.
posted by Ty Webb (14 comments total)

"At a stroke" seems a bit strong, considering that they have no means of guarding the pipelines or keeping the oilfield workers safe -- that is, no means, without relying on the US or on foreign gunmen from Halliburton or Schlumberger....
posted by lodurr at 2:39 PM on November 11, 2004

He argues (correctly, I think) that such a gesture would prove to the Iraqi people and the world that we didn't invade Iraq on behalf on the oil interests. Problem is, whether we did or didn't, the oil interests are interested, and I don't think they'll give up their share without a fight.
posted by argybarg at 2:52 PM on November 11, 2004

It's a great idea, but it'll never happen--and aren't we using some of that money to fight the war? Where's it going now? Many powerful people have a very vested interest in ensuring that control of oil money stays in the hands of a select few.
posted by amberglow at 2:57 PM on November 11, 2004

If this is such a good idea (and I think it's flawed), why has nobody, nobody at all ever before suggested it?

Because they don't want it to happen, is why. newpartisan is naive or disingenuous, I'm not sure which - either he lknows it will never be taken up, or he doesn't realise that Poindexter, Allawi and all concerned are in cahoots with the multinationals.

And the guerrillas aren't just fighting for tyranny (ie, in opposition to freedom) - they trying to stop the dominos falling all round the Gulf. Iran is watching, and waiting.
posted by dash_slot- at 3:05 PM on November 11, 2004

I just enjoy the thought that, after having spent all that blood and treasure to overthrow a dictator and install a reformist government in Iraq, that new government nationalized the country's oil. That is, did precisely what provoked the U.S.-aided overthrow of a reformist government and installation of a dictator in neighboring Iran fifty years ago? I think that would qualify as irony.
posted by Ty Webb at 3:18 PM on November 11, 2004

Ah, I thought "liquid freedom" was going to be about alchohol in Iraq. Oh well, carry on I suppose.
posted by freebird at 3:20 PM on November 11, 2004

Didn't Fareed Zakaria propose this about a year ago?
posted by homunculus at 3:32 PM on November 11, 2004

I don't trust his figures, nor his presentation of them:

We’re not talking small money here. Even amid ongoing war and sabotage, Iraq today pumps over 2 million barrels of oil a day — roughly $100 million a day or $36.5 billion a year at $50 a barrel. A more stable Iraq could pump 5 million barrels a day or more — which would be nearly $45 billion a year at even $25 a barrel. Crediting, say 50% of these future revenues to Iraq’s Freedom Trust would ensure each person in the country a wealth stream worth hundreds of dollars a year — this in a country whose per capita gross national product is less than $1500.

His assumptions are:
- production is 100% every day of every year;
- production can be ramped up to 250% of todays levels;
- 50% of sales, which he calls revenues, to accrue to the people, with the other 50% to go to repair, development, corporation taxes, profits to western partners, paying off debt...

and he doesn't offer any evidence, convincing or otherwise, to support these assumptions.

Equally, he seems to contradict himself here:

Any adult citizen of Iraq would then be free, at any time, to ask for a calculation of their account’s value and withdraw up to their full balance — no questions asked.

...

Revenues credited to the Freedom Trust would not go directly to the public as cash payouts.

Eh? Can they ask for their money, NQA, or are the revenues squirrelled out of sight for their own good?

The population of Iraq is about 25 million. At his calculations, 50% of $45billion / 25 million = $1,800 pa. That seems mighty unrealistic.

I say that unless he can provide evidence that his calculations and assumptions are valid, that the premise will be explained better than this, and that the overall effects on the internal Iraqi economy is considered (inflation, anybody?), it's a crock.

And a transparent crock, at that.
posted by dash_slot- at 4:39 PM on November 11, 2004

If this is such a good idea (and I think it's flawed), why has nobody, nobody at all ever before suggested it?

I saw an article about such a solution in the WSJ over two years ago. See also here, here, here, here, et cetera.
posted by trharlan at 4:41 PM on November 11, 2004

Thanks for the 5+ links. Without context it's hard for me to know if any of the proposers are of any standing, or are they all by journalists and bloggers?
posted by dash_slot- at 6:13 PM on November 11, 2004

All the proposals I had seen (prior to my search) were from think tanks, both left and right.
posted by trharlan at 6:41 PM on November 11, 2004

OK, I'll check em out when I can, in the meantime - I hope their figures are more convincing than this guys. It could work, but expectations should be realistic, or else it'll turn out to be another half-assed promise.
posted by dash_slot- at 6:49 PM on November 11, 2004

Aah, "liquid freedom". "Beer". Homer Simpson
posted by davebarnes at 7:24 PM on November 11, 2004

HA HAHAHA... give the oil money to the Iraqis. Yeah that's a good one, a real knee slapper. Please. It's going to go right into oil corporation pockets, and that's that.

Yes, I'm being highly cynical. Allowing the Iraqis to control and benefit from their own oil production is of course the right thing to do in terms of empowering them as a nation and improving their standard of living to something reasonable...

... but it ain't gonna happen. Outside interests (us and others) will take control, either directly or by proxy, and the money will not stay in Iraq. Sorry.
posted by zoogleplex at 11:33 AM on November 12, 2004