It has been reported http://www.rawstory.com/news/2006/Senators_Clinton_Ensign_ask_Bush_to_1218.html (or the Wall Street Journal if you have a subscription) that Senators Hillary Clinton (D-NY) and John Ensign (R-NV) want the Bush Administration to set-up an Iraq Oil Trust giving every Iraqi a stake in Iraqi oil.

This idea is apparently modelled on the Alaskan Permanent Fund and involves paying what appears to be in effect a royalty directly to each Iraqi as a form of flat anti-tax (the opposite of a flat tax).

As they say: "We have urged for three years that the Bush administration pursue an Iraq Oil Trust, modeled on the Alaskan Permanent Fund, guaranteeing that every individual Iraqi would share in the country's oil wealth. Oil revenues would accrue to the national government and a significant percentage of oil revenues would be divided equally among ordinary Iraqis, giving every citizen a stake in the nation's recovery and political reconciliation and instilling a sense of hope for the promise of democratic values."

Traditionally a percentage of oil revenues goes to all citizens via the government in the form of royalties. I guess in a country where no-one has much faith in the government, cutting out the middleman makes sense, although it makes you wonder what is going on in Alaska.

The Senators also think that such a distribution would decrease damage to oil infrastructure: "As report after report indicates, one of the challenges to building Iraq's oil revenues has been insurgent attacks against oil infrastructure. A distribution of revenues to all Iraqis would mean they would have a greater incentive to keep the oil flowing, help the economy grow, reject the insurgency, and commit to the future of their nation".

I'm not sure how this is supposed to work. Will ordinary Iraqis be paid that much that they will be able to spend the whole of their time blockading pipelines against the insurgents who hope to eventually triumph by maintaining a temporary state of chaos in Iraq until they are in a possession to seize power?

Two questions re the above proposal:
Given that the major portion of the oil is on (or was originally) Kurdish land ( & following the template set by our own indigenous industry) should not the major portion of such revenue be assigned to the Kurds? &,

Doesn’t the proposition of individual shares create a potential for injustice, as it would allow some groups to qualify for a greater share simply because they have more children ?