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Update on Iraq

Jun 21, 2014

Yesterday it was reported that al Sistani, the spiritual leader of the Shiites in Iraq, is now calling for al Maliki to step down rather than seek a third term as Prime Minister.

I am always a little skeptical and cautious about news reports or rumors coming out of Iraq, but this is now being reported by the mainstream media as well.

Since Maliki himself is a Shiite from a Shiite political party, it hardly seems possible that the parliamentarians from his party would ignore his call and nominate Maliki when they meet next week. So it appears that al Sistani has given Maliki the kiss of death.

Their Constitution, by the way, dictates that they are supposed to meet within 15 days of the ratification of the elections (June 16). Instead of meeting on June 30, the crisis has caused them to move up the date of the first session to Tuesday, June 24. That is when they will choose a President, who will then give the first opportunity to form a government to the party with the most members of Parliament. That would be the State of Law (SOL) party, which is currently headed by Maliki, but which will probably nominate Ahmed Chalabi instead.

Meanwhile, the ISIS crisis, regardless of who is really behind it (the CIA or Saudi intelligence), there are consequences in both the winners column and the losers column. Maliki is the biggest loser, with the Shiites as a whole coming in second. The big winners are the Kurds, who have retaken Kirkuk, the big oil center in the north.

The Kurds are strong enough (250,000 man army) to hold off any threat from ISIS. In fact, they could easily finish off the ISIS fighters any time they chose. But they are using this threat to gain concessions from the embattled Shiites who control the regular Iraqi army. Not only will Kirkuk be returned to them, but reports say that the government has promised to implement Article 140 of the Constitution.

This Article should have been implemented years ago, but Maliki had refused. This has been one of the main sticking points in Iraqi unity for a long time. Article 140 has to do with oil revenues. The Kurds would export oil through the government and in exchange would receive 17% of the revenue to fund its regional governing bodies. Maliki wanted to lower the amount after the agreement had already become law, but the Kurds refused. It has gotten so bad this past year that the Kurds began sending their oil directly to Turkey and selling it on the open market in defiance of Maliki.

Now that the Kurdish army is the only thing that seems to be holding Iraq together, it is being reported that Article 140 has been altered so that the Kurds can sell their own oil and keep all the profits from it for the next five years. After that, they will receive 30% of the revenue. If true, this would represent a huge concession and ensure that the Kurds help Baghdad expel ISIS.

If these reports are true, I have no doubt that Iraq will hang together for as long as that agreement is kept. I expect that the Kurds from the north and the Shiites from the south will do a sqeeze play on ISIS in the middle and drive the survivors back into Syria. A new government, probably led by Ahmed Chalabi, will emerge as a more inclusive and moderate power.

The Sunnis in the middle willl suffer the most in the short run for their widespread support of ISIS, but in the end, they will make some political gains as the Shiite-led government loses some of its power.

Over the past few years, it has been prophesied and speculated that there would be chaos just before the Iraqi dinar revalued. Part of the reason for this, they said, was to scare people into selling off their dinar and driving down the price so that the big boys could take advantage of the cheap prices. I don't think that has happened on any wide scale. But certainly the ISIS crisis has produced some chaos and fear among dinar holders.

As usual, the only real way to live our lives is to hear God's voice and walk by faith. It is difficult to rise above the noise of the press and the rumors and to remain confident in what God has told us. But this is just one more opportunity to rise above fear and walk always in faith.

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Category: Iraqi Dinar
Blog Author: Dr. Stephen Jones