06/06/2005, 00.00
IRAQ
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Iraqi economy too oil-dependent

Iraq's excessive dependence on oil favours terrorism and contributes to the population's state of fear, says the spokesman for Prime Minister al-Jaafari.

Baghdad (AsiaNews/Agencies) – Prime Minister al-Jaafari's spokesman Laith Kubba said that Iraq's economy was too oil-dependent and must change to stop the rise of terrorism. Iraqis, he urged, must diversify production and create alternative sources of income.

"Ninety-five percent of Iraq's national income is dependent on oil," he said. In other countries like "Saudi Arabia, it's 60 percent [. . .]. Iraq is in an exceptional situation".

"It proves that the Iraqi economy is dependent—people wait for someone to give them money, but there isn't real production," he added.

Last year, Iraq's government had revenues of around billion, nearly billion of which came from oil exports. This makes the government vulnerable to constant sabotage attacks on oil pipelines. But Iraq can no longer rely on this state of affairs—it must diversify its economy.

Despite the 1,500 strong unit who patrol the northern pipeline that runs from Kirkuk to Ceyhan in Turkey, which had a capacity of 800,000 barrels per day, now is able to carry only about 100,000 barrels because of continuous acts of sabotage.

Sabotage is also delaying efforts to overhaul the entire infrastructure and make Iraq a modern, more efficient exporter.

Kubba said Iraqi ministries had to learn to rein in their spending, pointing out that if they had been left to spend as they had wanted last year, the government would have run up a US$ 4 billion deficit—around 20 per cent of its income.

Iraq currently produces about 2.1 million barrels of oil a day, about 1.3 million of which are exported.

"The real solution is to launch the abilities of Iraqis to produce for themselves. Iraqis are vital and productive people but currently there is a state of unrest and panic," he explained. (PB)

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