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BAGHDAD, Iraq ,
-- A new class of "grand mafiosi" is sucking
billions of dollars out of Iraq's vital oil sector
and crippling efforts to rebuild the nation,
according to an official report published in
Baghdad.
The findings of the Oil Ministry's inspector-general
paint a sordid picture of corruption pervading every
corner of the industry, from the oil wells to the
gasoline pump.
The report says that since Saddam Hussein's
overthrow in 2003, the spread of smuggling had
turned Iraq from a major exporter of petroleum
products into an importer.
"These problems have led to the loss of billions of
dollars, both in direct actual losses and in lost
opportunities," according to the report.
"This is robbing Iraq of historic opportunities for
revival and reconstruction and of basic necessities
for a ruined nation and heavily burdened people."
The report calls for "radical and urgent action" to
stop the abuses and punish those involved, including
new legislation and penalties to make oil smuggling
a crime of "grand economic sabotage."
Walid Khadduri, economics editor of the pan-Arab al-Hayat
newspaper, estimates that smuggling and other
rackets in Iraq are costing the country more than
$18 billion a year in direct losses and missed
opportunities.
"There is no accountability, no punishment and it
goes all the way to the top -- the smuggling gangs
are in cahoots with local authorities and
politicians because they need protection," he said.
"There was corruption under Saddam, but nowhere near
this."
The ministry report says smuggling has created a
"new class of grand mafiosi" and that a corrosive
environment of corruption is affecting everybody in
the oil business and destroying public faith in
politicians.
The report documents abuses ranging from direct
theft from oil consignments and pipelines, to fraud
involving false documentation for imported oil.
Even roadside supplies of black-market gasoline sold
locally were worth an estimated $900 million a year
to the illegal profiteers, according to the report.
The report estimates that 10 percent to 20 percent
of the refined products that Iraq now is obliged to
import from neighboring Turkey, Syria and Jordan are
being smuggled back to their countries of origin
after receiving Iraqi government subsidies to bring
the price down for local consumption.
Part of the problem is that product prices in those
countries are significantly higher than Iraqi
levels, which are government-subsidized to the tune
of about $7 billion a year to keep them within reach
of the distressed Iraqi consumer.
Daily Telegraph co.uk
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