Creating people's geographies
By Oliver Poole in Baghdad :: Telegraph.co.uk (Filed: 18/08/2006)
Iraq has the third largest oil reserves in the world but yesterday drivers were forming mile-long queues outside petrol stations, knowing that they would spend the night in their cars before they could fill up.
Only six weeks ago, Baghdad’s streets were jammed with traffic. Now they are nearly empty because pumps have all but run dry.
The official explanation is attacks on infrastructure. A pipeline from the northern oilfields around Kirkuk was targeted last month while the Beiji power station, one of the country’s largest, was partially closed after workers fled following death threats.
But drivers queueing outside the Muthana petrol station in central Baghdad suggested that the real reason was crooked officials in the oil ministry. They accused officials of selling fuel to criminal gangs who sell it abroad at a huge profit.
The shortage could have more far-reaching consequences than creating misery for Baghdad’s car owners. It is the latest sign that the economy may be on the brink of collapse. Inflation is running at 50 per cent, corruption is rife and, most importantly, the end of next month will bring to a close the American-funded reconstruction programme, even though electricity in Baghdad remains on for one hour in three at best.
For all the hardship motorists endure, the scene at the Muthana queue was almost festive. The unrelenting sectarian violence that has plagued the city since the bombing of the Shia Golden Mosque in Samarra in February has meant that few people now risk going out to socialise beyond their immediate circle. Being forced to wait with hundreds of others is for many the only social interaction they have.
Some took turns to push each other’s cars forward as drivers turned off their engines to avoid wasting fuel.
“I have been here since yesterday afternoon and still I am not at the line,” said Abu Omar. “The officials are lining their pockets so they can pay to live abroad while we rot here.” Others dismissed everyone in the government as “thieves”.
The latest report from the oil ministry inspector-general supports their claims. It is estimated that about $4 billion (£2.1 billion) worth of oil was smuggled out last year.
The problem for the state is that, with no income tax and almost no corporate tax, the government is reliant on taxing oil revenue to pay for itself. The lack of funds is one reason it has been unable to buy enough fuel from abroad to ease the shortages.
The Sept 20 deadline for the allocation of the last $2 billion of the $21 billion that the US has provided for reconstruction is fast approaching. Although aid will continue, it will be on a far smaller scale, meaning an end to the regular injections of cash that for the past three years have helped drive Iraq’s economy.
The money has failed to create the infrastructure intended, not least because much of it has had to be used to pay for the security of projects rather than on the work itself.
A report this month by the US special inspectorate general for reconstruction found that only 38 per cent of oil and gas projects had been completed and that nearly a third of planned electricity projects had not even started.
A crucial oil pipeline predicted to bring the government nearly $15 billion in revenue remains two years behind schedule. There is doubt whether it will ever be finished.