Demonstrations Over Fuel Price

Demonstrations over Fuel Price Increases in Iraq

Al-Zaman: Now that the elections are safely over, the government of Ibrahim Jaafari has tripled the price of gasoline and made substantial increases in the price of gas and heating oil, in contravention of its campaign promises. Hundreds of demonstrators came out in Kut and Karbala to protest the increases, which hit the poor especially hard in the winter. Many Iraqis consider the subsidized prices a way of sharing in the country’s oil wealth, which may generate as much as $50 billion this year, and which goes directly into government coffers. The cheap fuel also does, however, allow a lot of smuggling and it is expensive for the state, and Jaafari’s move seems designed to ensure that no government has to take responsibility for it. He is a lame duck prime minister and a new government will be formed in the coming months. This move may also be a sign that Jaafari will not continue as prime minister. It is the sort of policy that would have been pushed by the Supreme Council for Islamic Revolution in Iraq’s Adil Abdul Mahdi, a former Marxist who has become a free marketeer, and who is a leading candidate for prime minister.* [see below for Achcar comment on this entry]

Al-Zaman estimates that the Kurdistan Alliance will have about 50 seats in the new parliament. This is down from the 75 they had gained on Jan. 30, when the Sunni Arabs had not voted.

A Turkish source reports that, as well, 6 of the 9 seats allotted from Kirkuk province will go to the Kurdistan Alliance. This result has provoked consternation among Turkmen and Arabs, who also live in Kirkuk province in great numbers and fear that they will be joined against their will to the Kurdistan region confederacy.

Guerrillas detonated roadside bombs and conducted assassinations all over Iraq late Saturday and through Sunday, leaving two dozen dead. A GI was killed at Fallujah. One of the suicide bombers killed a woman and injured 11 persons at the Shiite shrine neighborhood of Kadhimiyah in northeast Baghdad, in a further attempt to stir sectarian passions. Many of the targets in this spree of violence were the Iraqi police and military.

There are a lot of credible complaints coming in about fraud in the recent Iraqi elections. A lot of the complaints concern the United Iraqi Alliance, the Shiite fundamentalist list, which had won the Jan. 30 elections in many provinces and was therefore able to erect a Chicago-style party machine. As in the old days in Chicago, the election was so democratic that even some of the dead got to vote.

“US Firm Paid $20 million for Iraq Propaganda“. The headline says it all.

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* Gilbert Achcar writes:

‘ Re: your comment dated Monday 19 on the increase of fuel price. The az-Zaman article that you quoted is biased, as are generally this newspaper’s anti-UIA comments. I don’t need to tell you that all news comments made on the Iraqi situation should be considered with a pinch — or a handful — of salt, as they involve all kinds of political or sectarian biases.

I think that, for the sake of fairness, one should take into account the following information given by Jaafari himself at a Press conference of the UIA on December 3:
1) the very date of the Press conference I am quoting [original excerpt attached] shows that this is not a decision proclaimed suddenly “now that the elections are safely over.” It has been proclaimed long before the elections, and was intensively (and very hypocritically when coming from the likes of Allawi) used against the UIA; the only new element, as one can gather from the news agencies, is that the government had decided that the increase would not be implemented before January 2006.

2) it was imposed by the Paris Club of governmental creditors as a condition to grant the Iraqi government a 30 billion dollar loan that it needs badly. This is one more instance of the rich countries clubs, whether they are called IMF, World Bank, Paris Club, or whatever, imposing social cutbacks on a Third World government; it is certainly not the last for such governments in general, and for the Iraqi one in particular. The issue is to what extent is the Iraqi government in a position, economically and in the presence of US occupation, to stand against such pressures.

3) the Jaafari government decided to allocate the extra budgetary income resulting from the increase to a social security fund for poor families. If this were truly implemented, it would be — by all standards of justice — much fairer than a very low price of gasoline, which feeds smuggling to the detriment of the Iraqi public and the benefit of smugglers. The difference is the classical one between a benefit given equally to everyone, rich or poor, and a redistributive benefit incurring to the poor only: the latter is much fairer. What remains to be seen, of course, is whether this last pledge was only one more of those “electoral promises” soon forgotten after the elections — as has already been the case for some of the UIA’s promises after the January 30 elections — or a real commitment determined by the fact that the UIA’s constituency includes mainly impoverished layers of the Iraqi population. Moreover, the increase in gasoline price should have been accompanied with an intensive explanatory campaign and specific measures guaranteeing cheap or free public transportation for low-income families . . .

The incumbent Iraqi Minister of Oil, Ibrahim Bahr-ul-Ulum, gave a press conference today (12/19) in which he stated his disagreement with the way the Jaafari government implemented the increase in fuel prices, which he said was done against his opinion. According to the report of the National Iraqi News Agency, the minister called for the postponement of the increase, saying: “We should make sure that we allocate the monthly subvention to poor families and the unemployed before starting to increase the price of oil products, because otherwise citizens in general and poor and unemployed people in particular will bear the brunt.” The minister’s position sounds correct to me. To be accurate, one should also add that the 3-fold increase brought the price of gasoline to 150 dinars (10 US cents) per liter, which remains quite below its cost to the government.

All the best,
Gilbert