This is indeed a very interesting proposal. I have been vorried that as an oil country Iraq will just go the same way as all other oil countries (except Norway), towards dictatorship again, specially as I know that most of the parties that did run for parliment called them selfs socialistic, workers or something like that and I saw that on many of their agenda´s was to continue the food aid program that the UN food for oil was replaced with. Most of the (bad) economy of Iraq has been payd for with the oil and most companies (at least the biggest ones I beliewe) have been in government ovnership, and indeed most things in daily life have been dictated one way or the other by and through the government.
The thing is with countries like Iraq, Venezuela and other countries whose governments have their main revenue sources independant from their population they become corrupt. So what is possible to do to make them more like ,,normal" countries, whose government is accountable to their people, who see how much their spending is hurting their own revenues is to reform the property system first and foremost and try to distribute the money to the citizens first before it goes to the government.
In normal countries, where the economy is based upon many pillars, and private entrepreunalship, the government must get its revenues from the people. F.e. is the situaton in Afganistan and Iraq very different, as Afganistan does not have many natural resources, so they must get their revenues from trade, agriculture and other kinds of productivity inside the country, and foreign help in the beginning propably. In fact if there is not a permanent solution to what to do with the oil money Afganistan is more likely to become a democracy than Iraq, unless they become a rental state (a state with independent revenues) through foreign help like Egypt. The danger there was newer too much centralization, quite the opposite, to much chaos, there needs to be found a balance.
I like those ideas from Chalabi particularly as they will decrease the power of the central government in Bagdad, and they can increase the power of various levels of government in new Iraq, of the 18 districts and various cities and towns, who will all get revenues by taxing these and other income of the citizens, like in a ,,normal" country, but specially as they will increase the power of the individual over his own affairs. Thus the potential for many different kinds of systems to arise within Iraq is great, maybe in some areas there will be high taxation and programs like the food program, public health and public schools (it depends though upon how much power each level will get over these issues, the more power at lower level the better in my opinion) and others still be run by the local government. In other areas the people will vote for more right winged aproach, having lower taxes and having to pay for schools, food, health care and such themselves. Thus this system can be something all the various powers within Iraq can agree on, instead of allways fighting for the top position to be able to distribute the oil wealth to their own people of the various groups living in Iraq.
I tried to think up some ideas how to do this, but now it seems that this controversial Iraqi politician has had similar, and in fact better idea, using a model I did not know of, Alaska, wich is by far simpler than my thoughts. I am not sure though how far this will go, if he wants to privatatize those services provided by the government, including the food for oil money, but it seems at least that the government will not get their revenues directly from the oil, but indirectly through the taxes of the people wich is absolutely neccasery for providing that the people look at their governments not as a source for cash, like in oil countries and other socialistic countries, but as spenders of your own money.
Hopefully this system will be enacted, it will be a huge stabilising factor I beliewe if the rules of the petroleum fund are simple enough and open to all, and not under direct control of the politicians what to do with the money.
I will post later my ideas for a scheme distributing the oil revenues wich were based upon a little more right winged aproach, but yeat maybe to much government control over the money. Hope to hear comments on if and how this could work.
I agree, the people rightly have first claim on the oil revenue - and in places where that is not the case the revenue mostly buys too much government.
The other thing I am disappointed in is that the US did not insist on breaking the oil production up into competitive enterprises, and on dissociating Iraq from OPEC. Too much "blood for oil" in that, I suppose - but it sure would "put a hurting on" Saudi Arabia's budget for proselytizing if that were so.
Iraq liberation ping.