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from the August 06, 2007 edition -
In Iraqi south, Shiites press for autonomy
Momentum is building for a federation of southern provinces in a further challenge to Iraq's national unity.
By Sam Dagher | Correspondent of The Christian Science Monitor

BAGHDAD

When Najaf unplugged its power station from the national grid last week, it was a sign of provincial dissent over the unequal distribution of electricity. But it also indicates a new assertiveness in the south, as Iraq's regional leaders seek to wrest control from a central government in Baghdad paralyzed by political infighting.

Multiple visions for unifying the county's southern provinces are emerging. The Supreme Islamic Iraqi Council (SIIC), one of the most powerful Shiite parties, is leading the charge to form an autonomous "South of Baghdad Region."

But 45 southern tribal notables in Najaf last week signed their own pact that envisions creating "the self-rule government of the unified Iraqi south."

Regardless of which southern group wins out, Baghdad faces a formidable challenge that could mean not just the loss of electricity, but revenue from the region's ports and oil fields, and further fracturing along sectarian lines.

"A federation of regions is one of the more practical solutions to Iraq's problems, but there is real fear that this will only be a prelude to partition," says Thamer al-Ameri, former adviser to the Iraqi parliament and now independent politician.

"Iraqis have yet to prove they are capable of power-sharing. We are just not ready to be in a federative union. So far it has been all about each group getting the most for itself," he says.

When Najaf pulled the plug on its electricity from Baghdad, provincial spokesman Ahmed Duaibel said it was because the provincial officials felt Najaf was not getting its fair share of electricity.

"We were being cheated out of our allotted quota for electricity and we felt this did not befit Najaf's stature as a pilgrimage center and seat of the marjayia [Shiite religious authority]," says Mr. Duaibel. "We did this for the sake of our citizens and we do not consider it mutiny against the central government."

He says the province is prepared to turn on the power station's remote terminal unit, which normally allows Baghdad to manage the output, if Baghdad addresses provincial grievances.

But one prominent resident who is familiar with the workings of the local authority says the move is part of a larger effort to include Najaf in the "South of Baghdad Region." The other provinces included in the project are Babil, Basra, Dhi Qar, Diwaniyah (also known as Qadisiyah), Karbala, Maysan, Muthana, and Wasit.

In recent weeks, Ammar al-Hakim, the son of SIIC leader Abdul-Aziz al-Hakim, has been leading a passionate grassroots campaign to rally support for the project.

"A fundamental cornerstone of the new Iraq is the creation of regions all over Iraq, especially the South of Baghdad Region," said the younger Mr. Hakim during a rally in Najaf on July 19 commemorating the killing of his uncle Muhammad Baqer al-Hakim in August 2003 in the same city.

"I call upon you to be totally prepared from now to form the South of Baghdad Region at the end of the period prescribed by parliament," he said.

On July 21, he repeated the plea at another rally in Baghdad.

The national assembly had passed a controversial law in October 2006 outlining the mechanism for establishing regions in Iraq. The law allows for regions to be created starting early April 2008 provided local referendums are held on the issue.

The law was opposed by Sunnis and Shiite rivals to SIIC, such as the Fadhila Party and Moqtada al-Sadr's movement, because they said it heralded the fragmentation of Iraq.

The debate over regional power

Under the Iraqi Constitution, regions have been given significant power, including adopting their own constitution; exercising executive, legislative, and judicial authority, organizing and managing internal security forces; and opening offices as part of Iraqi missions abroad. Also, regional laws take precedence over national ones in case of conflict.

The power of regions is currently one of the points of contention in the constitutional amendment process, according to an aide to Sheikh Humam Hamoudi, who heads the constitutional amendment committee in parliament.

An alternative to the plan that SIIC is promoting is the pact from tribal leaders. Leaders from Basra, Dhi Qar, Diwaniyah, Maysan, and Muthana provinces signed a pact in Najaf that envisions creating "the self-rule government of the unified Iraqi south." They even elected a president and announced plans to form a legislative-type body made up of 130 sheikhs and experts.

Sheikh Abdul-Karim al-Mahamadawi, who supports the initiative, says it's an alternative to the federalist or "super-region" project of the SIIC that would give more powers to "real southerners" while maintaining a commitment to a unified Iraq.

"The sons of the south have been marginalized in every way ... it's as if Saddam's dictatorship has been replaced with another one," says Mr. Mahamadawi, an influential tribal leader from Maysan who is openly critical of the Hakims.

Although Najaf and neighboring Karbala Province hold spiritual significance to Shiites, the viability of any regional federation hinges on Basra, which is the economic linchpin with its oil resources and sea access.

The case for partitioning

Partition is increasingly being advocated by Washington lawmakers and think tanks as the only way to bring peace to Iraq. "There is a massive operation underway to pave the way for the [south of Baghdad] region, but it's being done quietly," says Sheikh Jalaleddin al-Saghir, a senior parliamentarian and Hakim partisan who favors the SIIC plan.

Besides enjoying a close relationship with Iraq's most revered Shiite cleric, Ayatollah Ali al-Sistani, and educating the public about the merits of the "South of Baghdad" project, Sheikh Saghir says his party has already drawn up a detailed blueprint for creating the regional administration and that regular meetings take place now between top political, economic, and security officials from all nine provinces to further the goal.

He says the issue is of "tremendous regional and strategic significance that leaves no room for misadventures."

But the project faces important obstacles from other influential elements within the Shiite community.

There is Mr. Sadr who, despite his low profile in recent months and a US-led crackdown against his Mahdi Army militia, continues to enjoy wide support, especially among disaffected segments of Shiite society.

The Fadhila Party says that one of the main reasons why SIIC and its allies "orchestrated a campaign" to squeeze out Basra's governor, Muhammad al-Waeli, is because of his strong opposition to joining the federation.

"They simply want to eliminate all those opposing the region project," says Jaber Khalifa, a Fadhila leader.
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Did over 100,000 missing USA AK-47s end up in Venezuela?
August 7, 2007

At about the same time that former US Defense Secretary Donald Rumsfeld condemned Hugo Chavez of Venezuela for purchasing 100,000 AK-47 assault rifles, the Daily Mirror of Northern Ireland reported that a 99-ton cache of AK47s that was secretly flown out from a U.S. base in Bosnia to Iraq vanished. The deal was put together by the U.S. Department of Defense and was contracted out to a complex web of private arms traders.

Amnesty International chief spokesman Mike Blakemore said: "It's unbelievable that no one can account for 200,000 assault rifles. If these weapons have gone missing it's a terrifying prospect." American defense chiefs hired an American firm to take the guns from the Bosnian war, to Iraq, however, flights, which supposedly took off between July 2004 and July 2005 were not recorded by air traffic controllers in Baghdad.

A spokesman for the coalition forces confirmed they had not received "any weapons from Bosnia" and added they were "not aware of any purchases for Iraq from Bosnia". NATO and U.S. officials have already voiced fears that Bosnian arms - sold by US, British and Swiss firms - are being passed to insurgents.

A NATO spokesman said: "There's no tracking mechanism to ensure they don't fall into the wrong hands. There are concerns that some may have been siphoned off."

Two other companies in the complicated sale claim to have papers proving the guns were delivered in Iraq but refuse to show them.
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Venezuela Tries To Create Its Own Kind of Socialism
Chávez Taps Oil Wealth in Effort to Build System That Favors 'Human Necessities'

By Juan Forero
Washington Post Foreign Service
Monday, August 6, 2007; A12

CARACAS, Venezuela -- At a sleek, airy factory built by Venezuela's populist government, 80 workers churn out shoes -- basic and black and all of them to be shipped to Fidel Castro's Cuba, a leading economic partner.

With no manager or owner, the workers have an equal stake in a business celebrated as a shining alternative to the "savage capitalism" President Hugo Chávez constantly disparages.

"Here there are no chiefs, no managers," said Gustavo Zuñiga, one of the workers, explaining that a workers' assembly makes the big decisions.

There's also no need to compete -- production is wholly sustained by government orders.

Like the Venezuelan economy itself, the assembly line here is designed to put workers ahead of the bottom line and, in the process, serve as a building block in Chávez's dream of constructing what he calls 21st-century socialism. According to a 59-page economic blueprint for the next six years, free-market capitalism's influence will wane with the proliferation of state enterprises and mixed public-private firms called social production companies, the objective being to generate funding for community programs.

"The productive model will principally respond to human necessities and be less subordinate to the production of capital," the report says. "The creation of wealth will be destined to satisfy the basic necessities of all the population."

In year nine of Chávez's presidency, Venezuela's economy is undergoing a sweeping, if improvised, facelift as a president with powers to pass economic laws by decree enacts wholesale changes.

The transformation includes thousands of new state-run cooperatives, the government takeover of companies and new trade ties to distant countries such as Iran and Belarus, which the United States has dubbed "Europe's last dictatorship." The Chávez administration has recently announced plans to build factories to produce agricultural goods, cellular telephones, bicycles and a variety of other items.

Venezuela's state oil company, the engine for what Chávez calls a peaceful revolution, will have an even bigger role: The president has approved the creation of seven subsidiaries of Petroleos de Venezuela to grow soybeans, build ships and produce clothing and appliances.

Venezuela has also taken majority control of the oil sector, driving out Exxon Mobil and ConocoPhillips. Venezuelan officials hint that the government might nationalize production of natural gas by the end of the year. Chávez and other officials have also raised the possibility that the government will inject itself in banks, steel production and private hospitals.

The big question -- still not spelled out in detail by government officials -- is what exactly is 21st-century socialism?

"Chávez is, of course, radicalizing his model, but not in the Cuban way," said Luis Vicente León, a pollster and political analyst. "This is not communist. This is not capitalist. What is it? It's a mix."

Economic advisers and strategists, including Haiman El Troudi, who helps develop economic policy at the state's International Miranda Center in Caracas, say Venezuela is learning from failed economic models.

"We're distancing ourselves from the errors committed in the socialism of the past century," El Troudi said. Though El Troudi asserts that capitalism has failed, he said private capital is needed here -- as long as it is employed in "a new kind of company that dignifies the human condition."

In a country that was once as Americanized as any in Latin America, the economic alterations have resulted in a strange blend.

Workers are tutored on socialist values, and officials frequently call for the creation of a selfless and patriotic "New Man." The one prevailing feature of economic policy here is high government spending, particularly on popular social programs. The budget has gone from $20 billion in 1999, Chávez's first year in office, to $59 billion last year.

The excess liquidity, ironically, has helped generate unbridled capitalism, as construction, banking and other sectors are flooded with government spending. In a money-fueled, go-go consumer culture, inflation is elevated, cars sell for $100,000, elegant shopping malls thrive, a black market for American greenbacks is growing and fashionable art galleries sell paintings for tens of thousands of dollars.

The contradictions have not escaped the attention of economic policymakers, who say Venezuela needs to distance itself from the American-style capitalism Chávez frequently derides.

"That's not the society we want to build," Jorge Giordani, minister of planning and development and one of Chávez's oldest associates, said in an interview. "The Venezuelan economy is not just capitalist, but the wealth is concentrated, and it's dependent and underdeveloped. There's enough qualifiers for us to be worried and try to change it."

Although Giordani said foreign companies continue to be welcome in Venezuela, he criticized their quest for big profits. "We have to condemn it because, in the end, it leads you to misery," he said.

With oil income rising fourfold during Chávez's presidency, the economy has registered double-digit growth the past three years. Gross domestic output has gone from $103 billion in 1999 to $174 billion last year, according to recent testimony on Capitol Hill. Increased royalties and taxes leveled on private oil companies since 2004 have generated nearly $6 billion for government coffers, Chávez said last month, and authorities are cracking down relentlessly on tax evaders.

But in frequent speeches, Chávez has also lauded the bounties of Marxism, praised Castro's economic management and threatened private businesses with takeovers. That has helped unsettle markets. Foreign investment has screeched to a halt, registering an outflow of $543 million last year. The Caracas stock exchange has lost much of its volume after the government nationalized CANTV, the telecommunications company, and the Caracas electric utility. Perhaps most significant, Venezuela's state oil company has seen production decline over the past decade.

Though a solid majority of Venezuelans approved of Chávez's influence on national events, according to a recent poll by the Pew Research Center, an even higher majority, 72 percent, agreed that people are better off in a free-market economy.

For business leaders here, the big concern is that the economy is structured more on ideology and the whims of one man than on sound policy.

"Venezuela is on a path where politics and ideology appear to be a priority for those who have power," said José Luis Betancourt, a cattleman and leader in Fedecamaras, the country's most influential business federation. "The reality is there's a hegemony in terms of control of the economy and political power, and that leads to a situation where the development of private business is seriously affected."

Rigoberto Lanz, a senior adviser in the Ministry of Science and Technology, acknowledged that Venezuela is going through "a very risky time," as businesses wait to see exactly what kind of economic model the country will develop.

"In the short term, Venezuela will not be an attractive market for foreign investment, because this search to define an economic model, 21st-century socialism if you will, is a bit complicated," he said, explaining that officials are still working on that model. "They're trying to develop something to fit Venezuela, and that's not done in one day."

Some respected Latin American economists say the growing state role, coupled with the improvisation, could unravel the economy.

"It might look great for a while, but we know these are formulas that don't work," said Hernando de Soto, a Peruvian economist who has written extensively about how to legitimize informal economies.

In co-ops and state companies, Chávez's policies have generated legions of devoted followers like Iris Pinto, 31, who said her life had been dull, mostly cleaning homes. Now she's at the shoe factory.

"He's a wonderful president, really socialist," she said. "President Hugo Chávez Frías gave us this opportunity, and it's been completely successful."
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