Politics & Policy


A decentralized Iraq is the necessary solution to the current political paralysis.

Senator Joseph Biden and Leslie Gelb recently published an article in the New York Times titled “Unity Through Autonomy in Iraq.” It’s a good idea, and one that we have been advocating for the past couple of years, both here on NRO and elsewhere. There remains little indication that the Bush administration is considering any significant alteration to its long held call for a centralized government; however, even the most stubborn observer must agree that long term prospects for such a formulation are slight indeed. In any event, it is encouraging that, after more than two years’ gestation, the idea is getting attention and being discussed more broadly.

#ad#There are of course challenges aplenty in the fulfillment of any governance formula for Iraq. The Arab world’s authoritarian tradition extends to Baghdad, requiring resolution and clear codification in law of any form of government. Fortunately, at the leadership level, good judgment increasingly seems to prevail. The agreement on a prime minister and cabinet, albeit after months of politicking, means politicians on all sides are at last being realistic, causing us to infer that they have a clear understanding of the virtual impossibility of creating an effective, strong central government.

Simply stated, Shia and Kurd leaders overwhelmingly favor a decentralized government, with the Sunnis nominally opposed, fearing they will be dealt out of Iraq’s oil wealth.

What is required is equitable distribution of oil ownership and its attendant financial benefits, a challenge that provides an outstanding free market opportunity which we summarize below. Following is what we have been recommending for the past two years, with respect to both governance and petroleum.


A cantonal system similar to the Swiss model is the most viable option for the restive, fearful Iraqi communities–Shia, Kurd, Sunni, Christian, and Turkmen. From countless talks with Iraqi leaders of the various communities, it appears eminently possible to maintain an Iraqi national fabric while allowing for semi-autonomous governance in different sectors of the country. Such a formula has peacefully united very different communities, the very challenge facing Iraq, in one nation for 800 years: Switzerland.

A system of five cantonal districts can be established. Three would be Kurd, Shia and Sunni dominated, based in the northern, central, and southern areas of the country respectively. Two other cantons would have special administrative status: the one, based in Baghdad (a melting pot of Shia, Kurds, Sunnis, Turkmen, and Christians, among others), would be recognized by all Iraqis as the country’s capital canton; the other, embracing oil-rich Kirkuk plus Diali-Khanaqin, would also have special status owing to the area’s equally diverse ethnicity.

A Kurdish canton should contain three main districts–Erbil, Dahuk and Suleimaniya. Concentrated in the north, the Kurds are a dynamic, non-Arab minority comprising upwards of 20 percent of Iraq’s population. They have shown themselves remarkably capable of governing themselves effectively for a decade, have agreed not to seek independence, and should be allowed to retain their status.

The Sunni minority, similar in size to the Kurds, is reviled by the Shia because of decades of oppression by Saddam Hussein’s regime, and has understandable concerns of a strong central government dominated by Shia politicians–fears heightened by credible reports of Interior Ministry support for attacks on the Sunni community during the past year. The Sunni should have their own semi-autonomous canton in their heartland, the notorious “Sunni triangle” north and west of Baghdad.

The numerically dominant Shia would not only control their own development and destiny in the south and central areas where they predominate, but would also be a pivotal force in the national government based in the Baghdad special administrative canton, as well as in the other mixed canton of Kirkuk and Diali-Khanaqin.

The Shia community strongly favors running its own affairs, provided there is agreement on the composition and residual responsibilities of a Baghdad national government.

The remaining sizeable community to be specially considered is the Turkmen, a group which has felt inadequately considered since Iraq’s liberation and is fearful for its rights. Most live in the two proposed mixed cantons, as do the much smaller Christian communities (including Chaldeans, Assyrians, Armenians, Orthodox, and Protestants), and the Sabean, Mandaean, Yazidi, and Jewish communities. Clearly, every effort should be made to guarantee the rights of all such minorities in the ultimate cantonal and national constitutions.

What about the national government? It can and should provide for Iraq’s foreign relations, defense, and monetary requirements, and oversee the development, management, and equitable operation of the country’s massive petroleum reserves.


We have encountered no substantial or meaningful case favoring a nationalized, government-owned petroleum industry, just as we have heard no persuasive argument for a centralized Iraqi government, either from Baghdad or from Washington. Indeed, there could be no stronger proof-positive of Iraq’s newly attained free market status than for its greatest natural resource not to be socialized.

Iraq’s vast petroleum wealth is an asset of inestimable potential, and must be developed to the benefit of all the country’s citizens. There can be no question about oil in the north being solely for the benefit of Kurds, or oil in the south for the Shia; petroleum is an asset which should benefit all Iraqis equally.

The nation’s enormous oil patch clearly requires professional local oversight. Local management, reporting to a board of directors (one-half of whom could be designated by the national parliament and the other half by shareholders) would see to the effective and honest operation of the industry, utilizing international companies to prospect and develop the oilfields and market the production.

Actual ownership should be Iraqi, adopting a modified Norwegian model that provides direct participation in the financial benefits of its oil industry to those to whom the resources belong–the citizenry. A key difference from the Norwegian model, however, should be that the Iraqi petroleum industry is actually owned by the citizens, whereas the Norwegian industry is state-owned, with profits earmarked to a host of services benefiting citizens.

The keys to a successful citizen-owned, locally managed, and internationally developed petroleum sector are threefold:

1. An equal number of shares distributed to every citizen age 18 or older.

2. Shares held by the original recipient for a minimum of five years, except in the event of death, when they would be deeded to the designated next of kin. In any event, shares could only be held by Iraqi citizens.

3. All petroleum related operations overseen by an independent Board of Directors.

A citizen-owned oil industry would send a resounding message to Iran, Kuwait, Saudi Arabia, and every other oil producing state in the region that petroleum is a resource of the people of each country. In so doing, state-owned companies would no longer have the option, as currently, to creak with inefficiency and reek of corruption.


Implementation of the above programs and policies would lead to:

• Development of trusted leadership cadres in the three major population groups;

• Reduction in potentially disastrous inter-communal rivalries;

• No need to deal with the foul regime in Tehran, simultaneously encouraging the already strong Iranian opposition;

• Iraq as a genuine beacon of free market democracy in the Middle East.

This is, in short, decidedly not the time to cut and run. America’s Iraqi experience since the end of its brilliant military campaign has been an object lesson in what not to do. However, it is not too late to reverse the downward spiral and to implement with clarity and conviction what can and should be done to bring peace and stability to the country and, thence, the region.

It is a self-defeating myth that Americans have lost the respect and support of Iraqis. The overwhelming majority of Iraqi leaders and men in the street are grateful and hopeful that America will stay the course by providing security and guidance, until Iraqi forces and governmental structures are in place.

There are, however, three constituencies the coalition will never win over: Iraqi Ba’athist and assorted Muslim fanatics; al-Qaeda and other foreign inspired terrorist groups; and neighboring nations’ governments, including most significantly Saudi Arabia, Egypt, Syria, and Iran.

A critical step for improving relations with Iraq’s Shia is for the United States to open direct discussions between Grand Ayatollah Ali-Muhammad Sistani and a senior U.S. representative. Having made the egregious mistake of treating Sistani like a 19th-century Japanese emperor, a way can and must be found to create the basis for mutually face-saving and profitable talks with the country’s single most influential Shia leader. Undeniably important, Sistani is primus inter pares of Iraq’s Shia clergy. The perception of further American kowtowing can only result in jealousy among his senior colleagues.

Another doubly important way to improve U.S.-Iraq relations is for Washington to cease discussions with Iran’s leadership, whom Sistani and many other Shia clergy in Iraq despise. President Bush correctly identified Iran as a charter member of the Axis of Evil, and Tehran’s reigning mullahs wish America no luck whatever.

The recommended approaches to governance as well as petroleum sector organization and ownership have the great benefit of being broadly accepted by all Iraqis. They would avoid much of the predictable dispute that the coalition’s current centralized approach for government and a nationalized petroleum sector have produced. Indeed, they would be as refreshing to good governance and nascent capitalism as the widely popular 15-percent flat tax for individuals and corporations that is already in place.

What remains is Republican concurrence with this thoroughly nonpartisan solution to Iraq’s two most pressing issues, followed by the U.S. mission and its British partners providing guidance and encouragement to the country’s new cabinet in the fulfillment of these realistic goals.

–John R. Thomson has worked as businessman, diplomat, and journalist in the Middle East for four decades, having lived in Beirut, Cairo, and Riyadh. Hussain Hindawi founded and edited for eight years UPI’s Arabic service, and most recently served as Chairman of the Independent Iraqi Electoral Commission.

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