“No taxation without representation”. That was the slogan people in America used to use against the British colonialists. It’s short, salient and packs a punch. But how about “no representation without taxation”? You see, the oil-rich countries in the Gulf don’t really tax their citizens and are economically autonomous from society. They are not beholden to them in any way. When oil revenues come into the coffers, it is up to the king (or emir or sultan) to then bestow gifts upon his subject, who in turn, owe him complete loyalty . The state, the government, and the king become one – any act of dissent against the king is an act of disloyalty not only to the crown, but to the country as a whole.
Iraq is the same. The social contract between the state/the government and the people is perverted. More importantly, the fact that it is so financially autonomous means that it can inflate, become a leviathan and intrude into aspects of people’s lives that it has no intrinsic right to get involved in. In Iraq, the government is the employer, the service provider and…well…the government.
But how do we go about solving this problem? This is a tough one. The solution requires not only really uncomfortable adjustments in the way the economy is organised, but in people’s mentalities too. It has been done before though, in Norway, where a brilliant Iraqi, Farouk al-Kassim (article well worth a read), advised the government to make legislate that the only money it could make from oil, is the interest on the savings from the account the entire export revenue went to. This made sure that the government didn’t become too independently wealthy and that the economy didn’t become so over-reliant on a commodity that it would neglect other productive sectors and industries.
This is probably a caricatured solution for Iraq, and I am not saying that this can ever be done in its entirety there. But there are clear lessons to be learnt from Norway’s Kassim-led success.