Things will definitely get worse in Iraq before they get better. Today, the country’s parliament voted to cut the 2009 budget by 7 percent — nearly $4,2 billion — due to plummeting oil prices. Anyone who has bothered to venture out into Iraq’s cities knows that the situation is desperate, with infrastructure in ruins, unemployment rampant and people generally at the end of their tether. What little flicker of hope there is has focused on the government’s pledge to use oil revenues to make things more bearable, but that now seems increasingly unlikely.
The repercussions will be grim. The SoI will go unintegrated, the army won’t be paid, returning refugees and IDPs will be left to fend for themselves, reconstruction will grind to a halt, and before long, we’ll see the Kurds and the Arabs battling over Kirkuk’s oil.