I was waiting in the doctor’s office yesterday and I happened to pick up an issue of Forbes Magazine from November of ‘06.  It was a little outdated, but that didn’t stop me from finding a great editorial written by Steve Forbes himself.  I happen to be a strong supporter of dividing Iraq into autonomous states with seperate governments according to the religious lines in the country.  However, the one major roadblock to this goal has been the uneven distribution of oil throughout the country.  We have the Kurds in the North, the Sunnis in the middle, and the Shia in the South.  The oil is deposited mostly in the North and South, leaving the proposed Sunni province with little black gold of its own.  So once again, greed is the main factor preventing us from leaving Iraq. 

I have spent the last few months pondering how this uneven oil distribution could be overcome, and Steve Forbes led me to the first solution I have seen that actually stands a chance of working.  Forbes proposes that we can apply our policies in Alaska to Iraq.  How can we use Alaska as a model for Iraq you say?  I know it might seem bizarre at first, but that is because you probably are unaware of our oil policies in Alaska.  Most Americans will be surprised to know that there is a fund that is managed by investment experts hired by the government called the Permanent Fund.  The Alaskan Permanent Fund, established in 1976 after oil began flowing from Alaska’s North Slope, was established to take a portion of the oil revenue out of the hands of politicians and give it back to the citizens of Alaska.  Each year, about one quarter of the revenue generated by Alaskan oil sales is placed in this professionally managed fund.  At the end of the year, each Alaskan recieves something called the Permanent Fund Dividend, or their rightful share of the profits.  Last year, the dividend for all Alaskans was about $1,100.  The amount of the dividend varies year to year with the performance of the fund.  

So now that you know what the Permanent Fund is, let’s see how we could apply this to Iraq.  Forbes argues that an Iraqi Permanent Fund would solve the oil distribution issue in Iraq, and I tend to agree.  It would end the argument over where the oil wells are located geographically and it would provide an incentive for unity in harvesting oil.  The benefits to Iraqis would be numerous.  First of all, it would help stimulate the Iraqi economy by spreading the oil wealth to the entire population, rather than leaving it in the hands of the elite.  Everyone knows that things are more peaceful when economic conditions are better.  In addition, everyone would need to register an address if they want to recieve their cut of the fund.  With this incentive to register an address, the government and police force would be able to create a database of who lives in Iraq and where.  This would make law enforcement more efficient, taxes more efficient, and many other government functions more efficient.  It would also make it easier to find people we are hunting for because we would have addresses for their relatives and friends.  The government would even be able to accurately analyze the demographics of Iraq.  Finally, since everyone has an economic stake in the oil production in Iraq, oil production would be ramped up.  Right now we struggle to get the oil fields up and running in Iraq because of attacks on our engineers and the pipelines, but with everyone recieving money from these drills and pipelines, Iraqis would not stand for attacks on their oil facilities.  They would also strive to get their oil facilities up and running faster, producing more oil, and benefitting the economy immensely. 

Of course, as with everything else, the success of this plan would rest on the government.  The Iraqi Permanent Fund would only work as long as oil revenue is paid into it.  Strict governmental supervision would be needed to make sure that the fund was being financed and managed properly, and with a disorganized Iraq, it could be more than the government is capable of.  We may even see the politicians and elite complain about their decreased control of oil revenues, which would stem only from greed.  Overall, Forbes proposes a bold plan that is not incredibly difficult to implement.  It seems much more sensible to me than just a time table with benchmarks.  Sanctions and penalties don’t force action, but strong economic incentives never fail to promote efficiency.  Most Americans feel we can’t leave Iraq until the government is strong, but with this plan, the citizens would have an incentive to support the government.

Alaskan Permanent Fund Corporation

Alaskan Permanent Fund Dividend Division

Jason “J. Klein” writes regularly on the College Critic blog.  The College Critic covers a broad range of topics with a politically moderate viewpoint. 

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