TCS Daily


The War-Winning Weapon

By Lenny Glynn - October 15, 2004 12:00 AM

As vicious as the struggle for power in Iraq is, the new government has a war-winning weapon that could, at a stroke, undercut the insurgency, enrich the Iraqi people and create a powerful, long-term force for democracy, national unity and economic development. That weapon is oil.

To deploy it, Prime Minister Ayad Allawi's government should announce that as of a date certain, a new national investment fund -- call it The Iraqi People's Freedom Trust -- will be credited with a major share of all future Iraqi oil earnings. Revenues directed to the Trust would be invested in government bonds, with a small cash reserve to cover withdrawals by individual Iraqis.

All 27 million Iraqis -- men, women and children -- would to eligible to claim an equal, personal investment account in the Freedom Trust. All they need do is prove Iraqi birth and pledge allegiance to the government. Registration for shares in the Trust could go hand in hand with voter registration for the upcoming national elections. Adult citizens should be free, at any time, to ask for a calculation of their account's value and withdraw up to their full balance -- no questions asked.

The mere announcement would be electric. For starters, it would dispel the fantasy that this war was waged by the U.S. to somehow steal Iraqi oil. What's more, the Trust's financial -- and political -- power would compound over time. For the first time in the history of Iraq, indeed, of oil nations generally -- the new government would be offering every citizen an ownership stake in Iraq's vast oil wealth. This is an asset long-since nationalized -- allegedly on behalf of the people -- but routinely looted in practice by the former dictator and his cronies. Creation of the Freedom Trust would instantly redefine the current war as a struggle between a young democracy seeking to share wealth with its people -- and an old elite fighting to get back the power to steal from the people.

Giving Iraqis an assured income stream would jump-start economic development even in remote regions much faster than any centralized aid scheme. Poor and rural Iraqis, who have never seen a dime's worth of their nation's oil wealth, would have a strong incentive to register for accounts in the Trust and claim their share of the national patrimony. Word of the first cash redemptions from the Trust would spread like wildfire, giving all Iraqis -- whatever their ethnicity, sect or tribe -- a strong, equal, and bankable stake in the country's future stability.

We're not talking small money here. Even amid ongoing war and sabotage, Iraq today pumps over 2 million barrels of oil a day -- roughly $100 million a day or $36.5 billion a year at $50 a barrel. A more stable Iraq could pump 5 million barrels a day or more -- which would be nearly $45 billion a year at even $25 a barrel. Crediting, say 50% of these future revenues to Iraq's Freedom Trust would ensure each person in the country a wealth stream worth hundreds of dollars a year; this in a country whose per capita gross national product is roughly $1000.

More importantly, the Freedom Trust would offer a real future for Iraq's young people whose holdings would grow steadily until they come of age. Simply by creating the Trust, the Allawi government could have the same impact on the civil war it is waging as Lincoln's emancipation proclamation did on politics and diplomacy of the American Civil War.

With that single move, Lincoln effectively redefined America's civil war from a conflict over regional power or "states' rights" to a moral, even a revolutionary, struggle over slavery. Granting Iraqis a share of their own resources to Iraqis would have the same kind of profoundly moral -- and revolutionary -- impact. Every Iraqi could look forward to the right, not just to freedom, but to the income to make use of it and the prospect of wealth-building for their children. "Insurgents" would be redefined as what they are -- perhaps the first "National Re-enslavement Front" in history -- cruel and desperate men seeking to steal young Iraqis' futures.

Turning black gold into liquid freedom would also set a fine example for other oil-rich nations. And it would do something more that help win the war. It would help secure a lasting peace, grounded in commonsense justice. That may be the only outcome that can, in some measure, redeem the sacrifices that Iraqis, Americans and our allies are now enduring.

Boston-based writer Lenny Glynn served as a speechwriter for Governor Bill Clinton's 1992 presidential campaign.


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