- After a Transitional Phase, the Iraqi People Should Choose Their Own Government and Run Their Own Oil Program, Which Faces Significant Challenges to Increase Production.
- U.S. Should Play a Supporting, Not a Leading, Role in Political and Economic Reconstruction.
- Treat Iraqis as a “Liberated, Not a Defeated, People.”
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Guiding Principles for Post-Conflict Policy in Iraq
December 18, 2002— “The United States may lose the peace, even if it wins the war,” unless the Administration lays out plans now for how to best reconstruct and govern Iraq post-Saddam, warns a panel of experts. Led by two distinguished diplomats, Ambassadors Edward P. Djerejian and Frank G. Wisner, the panel calls for the appointment of a “Coordinator for Iraq” to oversee and articulate a three-phased strategy in the areas of security, economics and governance.
In the first systematic and comprehensive effort to outline guiding principles and priorities in the post-war environment, an independent panel sponsored by the Council on Foreign Relations and the James A. Baker III Institute for Public Policy of Rice University have prepared an “intellectual road map” to help the Bush administration promote reconstruction and reconciliation in Iraq and build a more stable Middle East in the day and the decade after war. The report makes clear that although considerable resources are available, Iraq’s oil revenues will not be enough to provide for the many tasks required to stabilize and rebuild Iraq.
The panel asserts that U.S. efforts must be accompanied by a vigorous public diplomacy campaign in the Middle East and the Muslim world to deflate criticism in the region and deny terrorists and extremists the ability to use military action to their own political advantage.
Key Tasks and Objectives the Memo Considers:
Immediately after the conclusion of hostilities a strong American presence will be needed to establish and maintain law and order to ensure that anarchy, revenge, and score settling do not overwhelm the opportunities for lasting political change. As soon as possible, the United States must pivot from a leading role to a “superintending” one, recognizing that the Iraqi people will be a liberated, not a defeated people.
Early efforts must focus on eliminating the Republican Guard, Special Republican Guard, intelligence services, and other key institutions of Saddam’s rule, while preserving the Iraqi Army—minus the uppermost leadership and any others guilty of serious crimes. Iraqi leaders whose crimes are so egregious that they can be tried for crimes against humanity must be detained and prosecuted.
The report endorses a federal and democratic Iraq with Iraqis playing the leading role. The United States must make clear that it has no desire to become the defacto ruler of Iraq and its vast oil reserves. The report recommends a phased transition from an immediate “emergency transitional government with Iraqi advisors,” to an “internationally and UN-supervised Iraqi government” and finally to a “sovereign Iraqi government.”
The report cautions the administration to resist the temptation to establish a provisional government in advance of hostilities or to impose a post-conflict government dominated by exiled Iraqi opposition leaders. The external opposition has a role to play, the report contends, but it should be considered an important voice among many.
Although Iraq has the second largest proven oil reserves in the world, the Iraqi oil industry is being held together by “Band-aids.” Oil production capacity in Iraq is dropping by 100,000 barrels per day (bpd) annually. Significant technical challenges exist to staunching the decline and eventually increasing production. The report concludes that it will take 18 months to three years and $5 billion to bring the Iraqi oil industry back to pre-1990s production levels of 3.5 million bpd, in addition to $3 billion in annual operating costs. To get to the oft-quoted six million bpd will take years and require massive expansion of infrastructure, billions of dollars in investment and a stable political environment. War and its aftermath could further limit, not increase, Iraq’s oil production.
Leaving aside immediate humanitarian needs, which will be massive, reconstruction will take between $25 and $100 billion. Repairing existing oil export installations will require $5 billion and rebuilding Iraq’s electrical power infrastructure could cost $20 billion. Given that Iraq’s revenues are now in the neighborhood of $10 billion/year, significant financial support will have to be generated by neighboring states, multilateral institutions and other Western partners.
Initial investment requirements will have to compete with costs for Herculean humanitarian and other reconstruction needs that have to be met to avoid a major health and economic crisis in Iraq after a war. If not planned for in advance, the challenges faced by Iraq’s oil industry could leave Iraq’s population of 23 million largely dependent on international donor aid and portend a humanitarian crisis of serious proportions.
The report identifies a set of principles that should guide U.S. oil policy:
- Iraqis should maintain control of their own oil sector.
- A significant portion of early proceeds should be spent on the rehabilitation of the oil industry.
- A level playing field should be established for all international oil companies.
- Any proceeds are shared fairly by all Iraqi citizens. If de-politicized, the UN oil-for-food distribution mechanism is a useful starting point for distributing oil revenues throughout the country.