Iraq's oil | That long-awaited share-out | Economist.com

Iraq's oil
That long-awaited share-out

Mar 1st 2007 | BAGHDAD
From The Economist print edition
A deal has been done, but there are still some worrying ambiguities

A NEW oil law, apparently agreed upon at last by Iraq's politicians, should prompt a gush of much-needed foreign investment to reach the country with the world's second-biggest petroleum reserves. The law's passage was delayed for over half a year by a row between Iraq's federal government in Baghdad and the Kurdistan Regional Government, which runs much of the north-east, including some of Iraq's richest oilfields. Yet the law is still not quite complete.
AP So who gets the cash?

For instance, regulations for the distribution of revenues must still be drafted. Then the entire package has to go to parliament. Nonetheless, for all Iraq's main factions to have endorsed a detailed document governing an industry that produces oil worth $70m a day is a big step forward. “This is the first time since 2003 that all major Iraqi communities have come together on a defining piece of legislation,” says America's ambassador, Zalmay Khalilzad.

The government's main factions all agree that they need such a law to get the wells pumping again. Poor management and 12 years of UN economic sanctions had left the industry decrepit, even before the American invasion. Since then it has been hit by sabotage, corruption and administrative chaos. At the last count, in December, Iraq was producing only 2.1m barrels a day; the pre-war peak was 2.5m.
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But political agreements in Iraq tend to contain a lot of vague language that opens the door to future disputes. The delay in passing the oil law is largely caused by the new constitution of 2005, because it fudged the division of authority between the federal government and regional governments, crucially that of the Kurds.

The constitution gives the federal government control over fields already in production, and says that all powers not given to the federal government should go to the regions. But it does not specify who should control the exploration and development of new oilfields. Officials of the oil ministry in Baghdad say it is they who should handle all exploration. The Kurds interpret the constitution differently. They are willing to concede the management of new fields, but claim the right to negotiate contracts of their own with firms willing to exploit new fields in their territory.

In theory, that should not affect the division of earnings. Everyone seems to agree that the central government should run the existing fields (including those around the disputed city of Kirkuk, now controlled by the Kurds) and distribute the revenue evenly across Iraq. The Kurds accept that oil from fields in their area will flow into federally-run pipelines and will be sold by federal marketing bodies, with the ensuing revenue shared by all Iraqis.

But the Kurds insist that the central government should not be able to veto contracts. One reason they give is that Baghdad's ministries are so lethargic that plans to develop new fields would take too long to bear fruit. They complain that the central government already owes them several hundred million dollars of revenue. What they almost certainly think is that a locally-run oil industry would be vital if the Kurds ever won full independence.

The oil-law draft is not yet public, but the two sides appear to have compromised by letting an international panel of experts look at contracts and reject any that do not meet certain standards. In exchange, say the Kurds, they will be guaranteed a share of pooled revenue proportionate to their population. Both sides have grumbled about the compromise.

But at least the politicians seem to have sorted out some bits of the law that had stirred much debate abroad: the drawing up and regulation of the production-sharing agreements that international exploration and production firms love. Foreign drillers will, in certain fields, be able to keep a share of the oil they find, and not just be paid for their services. Some say this is fairly rare in countries with oilfields as big as Iraq's, and have accused Iraq's government of “giving away the store”.

Iraqi officials are at pains to say that the big fields will stay fully state-owned; production-sharing agreements will be dangled only as incentives to explore areas where oil is hard to find or exploit. The oil minister, Hussein al-Shahristani, says the law must be as flexible as possible to let the ministry do what is best for the country as a whole. Though Iraqi oil has been extracted for more than 70 years, parts of the country are still remarkably unexplored.

In some areas oil may exist but will be hard to extract: for instance in the western desert province of Anbar, in the oil-poor Sunni heartland. If it could be found and fully exploited there, the Sunni Arabs' bitter opposition to a federal Iraq, favoured by Kurds and many Shias, might fade.
No, we're all patriots for now

Iraqi officials say they hope a final version of the law can be passed by the end of May: a big challenge. Drafting the annexes, which include allocating specific fields to the Kurdish regional government, the central oil ministry and the national oil company, will be contentious. So will drafting a law to distribute revenue. The Kurds say the oil law is incomplete because deadlines were foisted on them. The American ambassador insisted that a new law be written and even, say the Kurds, took part in the bargaining on Baghdad's side.

This sort of pressure also helped produce Iraq's constitution, which is why the final wording was fudged and the federal issue flared up again. Were it not for such flawed agreements made under outside pressure, Iraqi politicians might produce no agreements at all. Yet if there is too much vagueness, the rows will revive all over again. It is unclear yet whether Iraq's emerging oil law will do the trick.

Iraq's oil | That long-awaited share-out | Economist.com.

Largest library closure in U.S. looms / Federal funding dries up, leaving 15 branches in Oregon county on brink

Largest library closure in U.S. looms
Federal funding dries up, leaving 15 branches in Oregon county on brink

Meredith May, Chronicle Staff Writer

Sunday, March 4, 2007

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Marvin Rosenberg worked with his wife on a mural at the e... Gary Stensrud with Jackson County Facilities Maintenance ... Miranda Canfield, 13, volunteers at the Central Point Lib... The new main library in downtown Medford, Ore., features ... More...

(03-04) 04:00 PST Medford, Ore. -- Pat Hardy hefted two book bags stuffed with "cozy murder mysteries" through the snow to Ella Fitzsimmons' front door at the Blue Spruce Mobile Estates trailer park.

"I brought you extra, because this will be your last delivery," said Hardy, who has been bringing the bloodless whodunits to the homebound 78-year-old every month for the last several years.

Fitzsimmons' literary lifeline will be cut April 7, when Jackson County in southern Oregon shuts down its entire public library system.

The 15 libraries serving this rural forest community lost $7 million in federal funding this year -- nearly 80 percent of the system's budget.

[Podcast: Kids: We like our libraries ]

[Podcast: The Breakfast Club at Sally's Kitchen in Medford, Oregon, on the merits of a sales tax and whether libraries are worth saving]

Now, not long after all 15 branches were rebuilt or remodeled, every one will be shuttered in what's being called the largest library shutdown in the United States. The crisis in southern Oregon can be traced not only to changing funding priorities on Capitol Hill, but also to crooked railroad deals in the Wild West, a spotted owl and a shrinking timber harvest.

Struggling library systems have come close to extinction in Salinas, Merced County and Niagara Falls, N.Y., but they pulled back from the brink, said Leonard Kniffel, editor of American Libraries magazine.

Nothing, he said, compares to the scope and severity of the pending closure in Jackson County, where about 100 library employees will be laid off.

Although the Bay Area is on a library high, having just opened four state-of-the-art libraries in Alameda, Belmont, Hercules and San Mateo, book lovers like Fitzsimmons in rural areas are getting left in the dark.

"I am very ticked!" she said. "Something screwy is going on."

Her sentiment is shared throughout southern Oregon, where the library crisis has stirred accusations of county mismanagement, children's protests in the streets, and a backlash against a proposed property tax to keep the libraries open.

An otherwise quiet collection of former timber towns, Jackson County has drawn national attention as librarians and book lovers lament in the blogosphere about the demise of a society that can't find a way to safeguard the citizenry's right to stay informed.

"I wish we could call FEMA; this feels like a natural disaster to me," said Ted Stark, interim library director for Jackson County.

"Libraries are so much more than just libraries in rural areas. This is where all the town meetings are held, where all the kids come after school, where everything -- everything -- happens," he said. Indeed, today;s libraries have evolved from merely loaning out books to providing Internet access, reading hour for babies, community meeting centers and art galleries.

Last fall, Congress failed to reauthorize a $400 million annual subsidy to 41 states to help rural counties prop up their local economies. Oregon took the biggest hit -- $150 million. Jackson County lost $23 million and had to slash everywhere, from reducing jail beds to cutting search and rescue teams.

That meant some hard choices, said Jackson County Administrator Danny Jordan.

"Losing libraries is a huge business deterrent -- who wants to move to a city that doesn't have libraries?" Jordan said. "But we decided we had to maintain public safety, which is already taking a $3.5 million cut. We won't be able to monitor misdemeanor sex offenders anymore. The hard reality is that libraries are not an option for us."

Jordan says Congress broke a promise when it cut off the funds -- the money was supposed to be in exchange for land taken away from Oregon by President Theodore Roosevelt.

In the early 1900s, Roosevelt took 2.4 million acres away from the Oregon-California Railroad, which was accused of swindling land deals in exchange for building the railroad. When the federal government reclaimed the land, Oregon lost half its property tax base.

To make up for it, the federal government agreed to split timber revenues on the acreage with Oregon. Over the next 50 years it was a lucrative arrangement, and timber money was used to build courthouses and jails, pave roads and free Oregonians from having to pay sales taxes.

The good times petered out in the early 1990s, when the northern spotted owl was listed as a threatened species under the Endangered Species Act, all but shutting down large-scale logging. Today, just one large sawmill remains in Jackson County, compared with 91 in 1954.

While promising to come up with rules for a more ecologically friendly logging method, Congress agreed in 2000 to continue "safety net" payments to rural counties for six more years. But no one did the hard work of figuring out how to balance the timber industry with nature. So the checks stopped in December 2006.

"The federal government stopped making money off of Oregon trees, so they stopped sending money to us -- it's that simple," said Leonard Kranenburg, a retiree who meets his "breakfast club" buddies every morning at Sally's Kitchen in Medford for coffee and conversation.

In November, Jackson County residents voted down a property tax levy that would have generated $9 million a year to keep the libraries open. It was the third time since 1984 that voters were asked to bolster the library budget, but the first time they said no.

"Back in November, the feds had not cut us off yet, and the possibility they'd continue to fund us was still there, so people didn't think the libraries were really going to close," said Margaret Jakubcin, a regional manager for the Jackson County Libraries.

Library supporters are trying again. They put an identical property tax levy on the upcoming May ballot. But in order to pass, 50 percent of the registered voters have to participate in the election, and a majority of them have to vote yes.

While Kranenburg's breakfast companions Sixto Rodriguez and Joe Camp say they will vote for it, Kranenburg sees a moral imperative to say no.

"The government broke their promise to Oregon," he said. "I see this as our way of fighting back. We can't give in. If we do, that's like taking away our guns."

Librarians have become political lightning rods in Jackson County.

"Some people come into the library and cry when they find out; others yell at us," said Luke Kralik, who just earned his master's degree in library science so he could work in the new Medford Central Library.

The contemporary 83,000-square-foot stone and concrete building has enormous glass panels on the second floor, children's gardens, bronze sculptures in the reading room and a computer network that allows librarians to answer instant message reference questions.

"There's something magical about the public library -- those moments when you help a kid find a book on wolves, or someone comes in with a family member whose just been diagnosed with something and they need help finding information," Kralik said. "I can't imagine what it would be like if that were gone."

Joy Davis, who has been blogging about the impending closure of her branch in the small town of Phoenix, said she's been getting sympathy worldwide in response to her posts.

"When I first heard the library is going to close, I almost passed out -- I had to sit down," said Davis, who checks out about 30 books a week to research her writing projects. Currently, she's interested in pinpointing the source of the conflict between creationism and evolution.

"I have a set of Britannica books, but that's not really a replacement," she said.

Despite her Internet savvy, Davis doesn't trust online information and depends on the library for solid data.

Kniffel, the American Libraries magazine editor, said most people feel the same way, and despite the advent of electronic information, library visits nationwide increased 61 percent between 1994 and 2004.

"Say you search something online and get 550,000 hits. How do you know which one is the right one?" he said. "You need a knowledgeable navigator to help you."

Miranda Canfield, 13, worries she will get F's on her essays if she can't rely on the librarians at Central Point Library in Jackson County.

"All my friends at school are talking about the libraries, and we were thinking of collecting cans or cleaning up yards to raise money to keep them open," she said.

While libraries have become the most contentious political issue in southern Oregon, everyone can agree that a long-term funding solution is needed.

"We're tired of begging Washington for money," said Jackson County Commissioner C.W. Smith.

There's talk in Jackson County of bringing back sustainable-yield logging, cities running their own libraries, and even mention of the unmentionable -- instituting a sales tax. Local politicians are pressuring Congress for a one-year rural funding extension.

Smith has two suggestions. He wants the government to keep half the Oregon timber lands as wildlife habitat but allow the state to sell the other half so the land could go back on the tax rolls.

While the spotted owl's listing "has been tied up in courts for nearly two decades, the trees didn't stop growing," said Smith, pointing to a map of forest fires in his office. The red blotches on the map indicate a steady increase in forest fires since 1980.

"In some areas, the Forest Service is paying $400 an acre just to thin it," he said.

Smith is also talking to school superintendents and city mayors about pooling resources to keep the libraries open.

"Whether we could make it work would vary from community to community," he said.

In Talent, a town of 20,000 halfway between Medford and Ashland, residents shared cake Monday at the grand opening of their new public library. The foyer was decorated with a neighbor's collection of gleaming pink conch shells, each one the size of a football.

Three times the size of the old library, the new 7,000-square-foot branch has a teen room with a graffiti wall, a Spanish-language section, and floor-to-ceiling windows in the children's area that allow parents to read on indoor couches while keeping an eye on the playground outside.

"We're trying to be upbeat, but how ironic is it to celebrate an opening that's going to last six weeks?" said branch supervisor Laurel Prchal.

If the property tax proposal on the May ballot fails, she fears the libraries are sunk.

"In 2000, when Congress started paying the timber subsidies to Oregon, we were in a surplus. We weren't at war. We didn't just have a massive hurricane in New Orleans," she said.

Prchal raised the new flag for the first time outside the Talent Library. But its first trip to the top of the mast was a short one. Prchal waited a few seconds, then lowered it halfway -- an Oregon soldier had been killed in Iraq.

At the Ruch Branch, a 30-minute drive east of Medford, artist Marvin Rosenberg lovingly pointed out the ceramic pieces of the library's mural. Residents of all ages made the pieces and pressed them into a cement backing: There were black bears, covered wagons, Canada geese, salmon, lumberjacks, even Bigfoot peeking from behind a tree. The fire chief had pressed his badge into the mural.

"This place is our home. This is our community center. This is where we problem-solve. They can't take this away," Rosenberg said.

Largest library closure in U.S. looms / Federal funding dries up, leaving 15 branches in Oregon county on brink.

Talijanska obitelj bijesna zbog ocjena pretukla ravnatelja škole

BARI - Pripadnici jedne obitelji u južnoj Italiji pretukli su ravnatelja škole, bijesni zbog loših ocjena koju je njihov potomak donio kući kao i zbog zabrane korištenja mobitela tijekom nastave u toj školi.

Tri muška rođaka, među kojima otac, djed i stric, tako su izudarali ravnatelja lombardijske srednje škole u Bariju, Uga Castorina, da je morao potražiti pomoć u bolnici.

Obitelj je bila pogođena slabim ocjenama koje je njihov izdanak dobio na polugodištu, ali vrhunac poniženja doživjeli su kad je Castorini zabranio korištenje mobitela za vrijeme nastave, a posebno pisanja testova, u školi. Muški dio obitelji odlučio se to raščistiti izravno s ravnateljem Castorinijem u školi.

Castorini je u trumatološkoj klinici tretiran zbog kontuzija i lakših ozlijeda, a u školu se vratio u pratnji policije.

"Nekim ljudima se to možda ne sviđa, ali ako želimo da škola funkcionira, moramo nametnuti neke standarde i poštivati čvrsta pravila", komentirao je izgred za lokalni tisak Castorini koji je ravnatelj srednje škole već 22 godine.

www.vecernji.hr.

Swiss Accidentally Invade Liechtenstein | Chicago Tribune

Swiss Accidentally Invade Liechtenstein

By Associated Press
Published March 2, 2007, 7:44 AM CST

ZURICH, Switzerland -- What began as a routine training exercise almost ended in an embarrassing diplomatic incident after a company of Swiss soldiers got lost at night and marched into neighboring Liechtenstein.

According to Swiss daily Blick, the 170 infantry soldiers wandered 2 kilometers (1.2 miles) across an unmarked border into the tiny principality early Thursday before realizing their mistake and turning back.

A spokesman for the Swiss army confirmed the story but said that there were unlikely to be any serious repercussions for the mistaken invasion.

"We've spoken to the authorities in Liechtenstein and it's not a problem," Daniel Reist told The Associated Press.

Officials in Liechtenstein also played down the incident.

Interior ministry spokesman Markus Amman said nobody in Liechtenstein had even noticed the soldiers, who were carrying assault rifles but no ammunition. "It's not like they stormed over here with attack helicopters or something," he said.

Liechtenstein, which has about 34,000 inhabitants and is slightly smaller than Washington DC, doesn't have an army.

Swiss Accidentally Invade Liechtenstein | Chicago Tribune.

How a lottery winner spends his multi-million-dollar jackpot - Feb. 21, 2007

Ne bi čovjek vjerovao, ali evo izgleda ima i takvih ljudi. Nakon onih silnih priča o kretenima koji nakon što dobiju 100 milijuna dolara na lutriji bankrotiraju u roku od dvije godine, ova priča je pravo osvježenje.

Taking home the jackpot
Here's how one lucky winner spent his new-found fortune.
FORTUNE Magazine
By Ellen Florian Kratz, Fortune writer
February 28 2007: 7:46 AM EST

(Fortune Magazine) -- Brad Duke, 34, a manager for five Gold's Gym franchises in Idaho, pocketed a lump sum of $85 million after winning a $220 million Powerball jackpot in 2005. He spent the first month of his new life assembling a team of financial advisors. His goal: to use his winnings to become a billionaire. Here's what Duke has done with his money so far.

* $45 million: Safe, low-risk investments such as municipal bonds
* $35 million: Aggressive investments like oil and gas and real estate
* $1.3 million: A family foundation
* $63,000: A trip to Tahiti with 17 friends
* $125,000: Mortgage retired on his 1,400-square-foot house
* $18,000: Student-loan repayment
* $65,000: New bicycles, including a $12,000 BMC road bike
* $14,500: A used black VW Jetta
* $12,000: Annual gift to each family member

Did you often buy lottery tickets or was this a one-time thing?

I played the lottery often when I won. I had developed a little numbering system. Since I've won, there's been a lot of numbering systems for lotteries all over the Internet. Before that, there weren't any. I really thought I was going to win. I even wrote it down in my journal in 2002.

How did you develop your system?

How to choose my lottery numbers started through a trial and error process. I just started playing number games with myself about how to capture the most diverse numbers. Then I looked at the most recent Powerball numbers over the last six months and took the set of 15 numbers that were most commonly coming up. My Powerball numbers were going to be those 15. So I starting messing around with it, and my number games got a little more complex and a little bigger. I was starting to win smaller amounts like $150 and $500.

So many lottery winners have sad endings. Did you worry about that?

I've always handled responsibility well. If you accept that check, you accept an amazing responsibility to yourself and whomever you decide to include in it. I was quiet about winning for a month before I decided to come out. During that time, I was getting as much research as I could on existing lottery winners and what their stories were. Most of them lose all the money within a short amount of time. I'm looking at statistics where people in ten years have nothing. In ten years, I wanted to be worth about ten times as much. I think a lot of people who play the lottery are people who live on hope.

What was your first major purchase?

A trip to Tahiti for me and 17 of my friends. At the same time, I paid off my mortgage and student loans. [What was your biggest purchase?] The family foundation was the biggest allotment of money. $1.3 million.

What else did you do with your money?

I wanted to make the most of the opportunity that was given to me, so I put together a team with the intent to reach and maintain a $1 billion status over a particular period of time. I wanted to do it in 10 years, which I knew was aggressive. My team talked me into looking at 15 years. But it looks like we're on track for 12 years. When you do something like that, the more you become worth, the quicker your growth curve is. My total net worth right now is at an unofficial value of $128 to $130 million. We've done very well for the first year and a half.

What about a big new house or a fancy new car?

I guess I'm more worried about spending time on my investments and helping my consulting company along and doing fun things with my family and friends. I will have a new home and a great car at some point, but just not now. The great thing about the lottery was that I get to experience amazing things with people I care about. I started up a consulting company and am employing some people that helped me along the way with my employment. I took my family on a cruise.

You had to have treated yourself to something.

I bought bicycles. I'm probably own upward of 17 bikes. I also bought a 2002 Jetta. I gave my 2005 Jetta to my nephew. So it's the exact same car except for his is white and mine is black.

You had a newer car that you gave to your nephew and you bought an older car?

That's correct. I wanted a black VW Jetta with a black interior. Believe it or not, those are really hard to find. I went to the local dealership and had them track one down for me. They had to go to Texas to get it. It fit my bicycle rack really well.

What happened to your job at Gold's Gym?

I still teach a spinning class there twice a week. I took some time off after the whole thing because everybody had investment opportunities that were the greatest thing since sliced bread, and there were 100 of them every day. So I had to get out of there for a while, but when I went back, the people I'd been teaching for the last 8 years were still the same people, and I was still the same instructor.

Have you given money to members of your family?

One of the first things I did was give everyone in my family the maximum amount without tax consequence. I have all of my nieces' and nephews' college funds set up, and they're set. And there's no debt for anyone anymore. Everybody is happy.

Are you happier since you^(1)ve won the money?

Absolutely. When it comes down to it, I get to do the things professionally that I've always wanted to do. I get to invent a piece of equipment that I've always been thinking about doing. I get to give back to some people that have given to me over years.

How a lottery winner spends his multi-million-dollar jackpot - Feb. 21, 2007.

Bosnia | Where the past is another country | Economist.com

Odličan članak o presudi Međunarodnog suda pravde i općenito situaciji u Bosni

Bosnia
Where the past is another country

Mar 1st 2007
From The Economist print edition
Three big decisions about Bosnia's past and future

SOMETIMES the response to a judgment is more predictable than the judgment itself. When the International Court of Justice ruled on February 26th that Serbia was not responsible for genocide in Bosnia during the war in 1992-95, newspapers in the Bosniak (Muslim) and Croat region of Bosnia called it a “fraud”, an “insult” and a “disgrace”; those in the Serb part of Bosnia talked sanctimoniously of the “truth”.

Bosnia launched the case in 1993, when the situation in the Balkans was different from today. Hundreds of thousands of Bosniaks and Croats had been ethnically cleansed by Bosnian Serb forces; Sarajevo and other cities were under siege; and the Serbian flag flew from the coast of Croatia to the southernmost tip of Kosovo. Now Bosnia is an uneasy federation of two autonomous bits, one Serb and the other Bosniak and Croat.

The judgment did not go wholly the Serbs' way, because it declared that genocide had indeed taken place in Srebrenica, in eastern Bosnia, in 1995. It also reprimanded Serbia for failing to stop it. But to Serbia's relief, it added that Bosnia could not demand reparations.

Conspiracy theorists think the ICJ delivered its verdict under political pressure. The argument is that Serbia, which faces the loss of Kosovo, its southern province, had to be appeased in some way. A bigger question concerns the evidence before the court. Serbia had to give incriminating transcripts to the United Nations war-crimes tribunal, which like the ICJ is in The Hague—but it did so only on condition that cases were heard in camera, to stop the evidence falling into the ICJ's hands.

Two other decisions this week may prove as important for Bosnia's future as the ICJ judgment is for its past. On February 27th the European Union confirmed its provisional decision to cut the size of its peacekeeping force. At the end of the Bosnian war, 60,000 NATO-led peacekeepers went in. In 2004 they were replaced by a 7,000-strong EU force, the biggest the union has ever deployed. That force will now be cut to 2,500 by the end of the year.

Does that mean that Bosnians can on their own sustain the peace and rebuild their country so that it one day joins the EU? Not quite, apparently. For the other decision was to extend the office of the high representative in Bosnia. This job, which carries powers to sack elected political leaders and impose laws, was due to be wound up by the end of June 2007. But it will now go on for another 12 months.

The present high representative is a German, Christian Schwarz-Schilling, who came to office determined that Bosnians must soon run their own country. But he has now changed his mind—or at least decided that it is too early to give up the job's powers. The question is whether all Bosnians will agree. Bosnian Serb leaders are hinting that they may not. They are talking rather of holding a referendum on independence, if and when Kosovo gains its own independence from Serbia.

After the ICJ judgment one commentator argued that Bosnians had to find a common history, otherwise they would have no common future. Today Bosniaks, Bosnian Croats and Bosnian Serbs teach children radically different stories about the war. Yet fate has decreed that they must share their state. Bosnia has made great progress over the past decade. The trick will be to get its citizens to co-operate, and not let the past rob Bosnia of a future.

Bosnia | Where the past is another country | Economist.com.