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Zalmay Khalilzad on Federalism and the New Iraqi Oil Law:

Zalmay Khalilzad, the US Ambassador to Iraq, presents an optimistic take on the new Iraqi draft oil law in this Washington Post op ed.

Here is his summary of the law's benefits:

· [The draft law] Reaffirms that oil and gas resources are owned by all the people of Iraq and contains a firm commitment to revenue-sharing among regions and provinces on the basis of population.

· Establishes a predictable framework and processes for federal-regional cooperation that demonstrate the government's commitment to democracy and federalism.

· Creates a principal policymaking body for energy -- the Federal Council on Oil and Gas -- that will have representatives from all of Iraq's regions and oil-producing provinces.

· Ensures that all revenue from oil sales will go into a single national account and that provinces will receive direct shares of revenue, thereby significantly increasing local control of financial resources.

· Establishes international standards for transparency and mandates public disclosure of contracts and associated revenue and payments. This is essential to build confidence in the new political order and to counter corruption.

As I explained in my post on the oil deal, I have several major reservations about it, and am therefore not as optimistic as Khalilzad is. Moreover, Khalilzad's official position probably precludes him from publicly expressing any reservations he might have. Nonetheless, I do agree that the law is an important step forward relative to the status quo.

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