Monday, October 30, 2006

10% Citizen: Dealing with Iraq

My professor from IMD proposed that we should be 10% citizens - in other words, give 10% of our time to help build community and create a better world. If such a balance could exist, the world would be a better place.

I agree with the concept, and to that point I address a global topic worth thinking about and addressing in some form to find better solutions - dealing with Iraq:

I'm not an expert on oil, but I do know that established markets reach an equilibrium and balance based on stable market conditions - something that economists yearn for but businesspeople and situations never allow due to dynamic decision-making and changing market conditions. When instability occurs, speculators come in, businesspeople take advantage of the situation (for better or worse), and regulators & economists analyze six months on to see what actually happened.

Although the decisions by the Bush administration to enter into its situation with Iraq was not fully about oil, the incursions that have followed have affected global oil prices due to the war's reduction of aggregate global oil supply, taking net 900k oil barrels off the market daily from Iraqi production - and more than this at the onset of the incursion. Granted, OPEC producers keep fairly close control of supply to match certain demand levels, but when a shock like Iraq occurs, markets react - first speculators that trade on future expected oil prices and then the big players in oil production.

Iraq contributed to the situation, along with political insurgency in Nigeria that slowed output from some pipelines in that country, Venezuela cutbacks on production from state-controlled enterprises, and impact from lost oil production in the Gulf of Mexico due to the affects of Hurricane Katrina on refineries in that region. Sure, it's not much, but added to the constrained environment that the world oil economy has been experiencing in terms of little production surplus in the aggregate global system, Iraq did contribue to the fluctuation in oil prices. Here is a link to some additional information on news releases and press reports in the US:

What I believe is that oil was one of several reasons for decisions made about Iraq; I'll list some as a starting point for furthering discussion:
1) spreading of democratic ideals in a region that would help create better equality for women, political stability (a wish of the neocons), and overall economic growth
2) protection of Israel from regimes in the area that are threatening that country's security
3) foothold in the region and soem traction from which to better pursue the first two objectives
4) more direct pressure on Iran to help influence those political actors to come in line with international sentiments
5) assistance for Iraqis to overthrow Saddam and his history of oppression
6) longer-term, more secure access to oil reserves in the region and overall stability across global oil production to minimize future potential shocks to the system

Iraq is about oil in a broader sense, to guarantee aggregate supply in the longer term and necessarily exploit Iraqi oil reserves for American benefit in the near term; in fact, the Bush administration has advocated getting the oil fields up and running at more-than-full capacity to generate revenues for the Iraqi government to support its push into freedom from oppression and democratic ideals.

With that in mind, I think it is helpful to look forward in generating some solutions to better the current situation.

Here are a couple of solutions that come to mind:
-better education on the interests and perspectives of regional factions: Americans in particular need better understanding of the Sunni vs. Shia situation to better address competing groups
-more troop support for the region: unpopular in the US, but the Bush administration has committed more troops just last week to help stabilize the situation long enough to get competing parties to the table for further dialogue and understanding; as ludicrous as this may sound, more international support would go a long way towards helping the international situation

I encourage others to build on and contribute more to these starting thoughts in order to come up with a better stance on how to help create the best situation possible in Iraq moving forward.
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