A woman passing U.S. and Iraqi soldiers in Baquba on Tuesday. The report issued Tuesday could put a new focus on the approximately $48 billion in U.S. taxpayer money devoted to rebuilding Iraq since the U.S.-led invasion. (Thaier al-Sudani/Reuters) From The International Herald Tribune:
High Oil Prices Giving Iraq Up To $79 Billion In Surplus Cash
The soaring price of oil will leave the Iraqi government with a cumulative budget surplus of as much as $79 billion by the end of this year, a U.S. oversight agency has concluded in an analysis released Tuesday.
The unspent windfall, which covers surpluses from oil sales from 2005 through 2008, appears likely to put a new focus on the approximately $48 billion in U.S. taxpayer money devoted to rebuilding Iraq since the U.S.-led invasion.
The report from the oversight agency, the Government Accountability Office, estimates that Iraqi oil revenue from 2005 through the end of this year will amount to at least $156 billion. And in an odd financial twist, large amounts of that surplus money is sitting in a U.S. bank in New York - nearly $10 billion at the end of 2007, with more expected this year, when the accountability office estimates a skyrocketing surplus.
Read more ....
More News On Iraq's Budget And Oil Finances/Reserves
GAO: Iraq's oil profits huge as U.S. bears reconstruction load -- McClatchy
Iraq's oil-fueled surplus could hit $80 billion, report says -- CNN
Iraq Banks Billions in Surpluses, GAO Says -- Washington Post
Iraq's oil wealth piling up -- MSNBC
Iraq spends little oil cash on rebuilding - U.S. -- Reuters
Oil expected to bring Iraq at least $66 billion in 2008 -- L.A. Times
Report: Oil prices help Iraqis built up huge nest egg -- USA Today
In Iraq, Far From a Deficit -- New York Times
Dems: GAO report shows Iraq can fund reconstruction -- The Hill
GAO: Iraq has third highest oil reserves -- UPI
My Comment:
I personally do not blame the Iraqi Government for limiting the spending of their money. The priority has always been security and the need to destroy Al Qaeda, Bathist dead-enders, and extremist Shiite groups. In short .... to win the war.
It does not make sense to me that you can spend reconstruction and aid money in the middle of a war zone. It seems that everyone understands this situation with the exception of the U.S. political class and the media punditry. They are only talking about the billions in American banks and on why we are spending all of this money, and they (the Iraq Government) are not. Typically, they are missing the bigger picture.
For your everyone's info, this is the big picture.
Present Iraqi oil reserves are estimated to be at a minimum of 120 billion barrels, second in the world behind Saudi Arabia, (EIA estimates that up to 90-percent of the county remains unexplored due to years of wars and sanctions). Unexplored regions of Iraq could yield an additional 100 billion barrels. Iraq's oil production costs are among the lowest in the world. However, only about 2,000 wells have been drilled in Iraq, compared to about 1 million wells in Texas alone. Iraq also contains 110 trillion cubic feet of natural gas.
At present prices ($120/barrel), we are talking of reserves that are worth a minimum of $14 trillion U.S. dollars, to a maximum of $28 trillion. I repeat .... $28 trillion dollars.
Reconstruction costs for Iraq will be in the tens of billions of dollars. In fact, I predict that the rebuilding of Iraq will be the largest reconstruction effort since the end of World War II, financed entirely by oil revenues. In addition, I am also sure that Iraq will be going full blown in general reconstruction and development projects that will dwarf the development projects in Dubai. This alone will be in the tens of billions more per year.
The reconstitution of the Iraq Army will cost tens of billions. To support a military of 300,000 to 500,000 men with the proper backup and support will probably cost more than what Saudi Arabia spends each year (which is $20 billion a year). A new Iraqi Air Force that will probably be equipped with F-22s, support aircraft, and attack helicopters .... almost all of it American .... this alone will dwarf the military budgets of the Middle East. This will not only be a boom for the American Military Complex, but a guarantee of security in the Middle East.
I am sure that a future Iraq will be a valuable ally to the West. Both countries have experienced the worse of radical Islam, and both countries now have a shared contempt for dictatorships and the misery that they produce. From this shared belief .... the U.S. and Iraq also have the same objectives and goals. (1) To develop the country using its oil reserves. (2) To have a powerful military that will protect Iraq from within and outside. (3) To counter the aggressive nature of Iran and its Persian Gulf objectives. (4) To eliminate radical Islamic extremism and all of its horrors. (5) To provide an alternative to the wretched political environment of the Middle East.
A stable Iraq .... and Iraq will be a stable country in the next few years .... will not only be buying goods from the U.S. that overtime will be in the hundreds of billions of dollars, but they will also be an important strategic ally in the most sensitive region in the world. The stability that they can provide in oil supplies and prices will alone be priceless for the global economy and for us in North America.
So when I read the above reports on the "immorality" and on their"shock" of Iraq's financial surplus, what I actually see are a bunch of people pointing at the pennies on the floor .... but are ignoring the sacks of monies and gold in the safe next door.