Differing interpretations of control over Iraq’s oil revenues emerged on Tuesday in Baghdad, potentially calling into question the financial independence to be ceded to the interim government that is due to take charge of the country in July.
Adnan Pachachi, a senior Iraqi politician who is viewed as a candidate for president during the period until elections can be held, said he expected the interim government to control oil revenues, subject to provisos on the repayment of debt and compensation to Kuwait.
However, the Coalition Provisional Authority (CPA) said that the status of future oil receipts would have to be resolved via a future United Nations resolution. On the CPA’s interpretation, an interim administration would not necessarily have the authority to spend oil money as it saw fit.
Future control of Iraq’s oil revenues, the country’s main source of wealth, is an essential test of its sovereignty, which the US says it is committed to handing over on June 30. The interim government is due to be named – rather than elected – later this month by Lakhdar Brahimi, the UN special envoy, in consultation with the CPA and Iraqi leaders.
Some 98 per cent of Iraq’s forecast revenues this year – $16bn (€13bn, £9bn) – will come from energy exports. Currently these are paid into a UN-authorised development fund for Iraq. Separately, donors have pledged $33bn over the next four takes for Iraq’s reconstruction – more than half of which will come from the US.
Asked whether on June 30 an Iraqi minister would take over responsibility for managing and spending the country’s oil money, Mr Pachachi said: “The oil money, yes. But of course, when it comes to the money given by the donors we have to agree with the donor countries. What comes from oil is our money and it is now.”
For its part, the CPA cited UN Security Council resolution 1483, which states that proceeds from energy exports must be deposited in the development fund “until such time as an internationally recognised, representative government of Iraq is properly constituted”. “The [Security Council] has not taken the position that the Iraqi interim government [IIG] will constitute ‘an internationally recognised, representative government of Iraq,’ ” the CPA said.
“If the IIG does not fit that term, the proceeds will continue to be deposited into that fund until the [Security Council] decides otherwise.