DrDinar Blog

US Defense Secretary Robert Gates Visits Iraq

Robert M. Gates visited Baghdad, Iraq last Thursday. It is said to be his last visit as a US Defense Secretary. There are many things that need to be discussed about the issues involving the US troops. Before the agreement of America and Iraq ends, Gates is meeting with U.S. commanders and Iraqi leaders over the pace of training of national forces to take over security responsibilities from U.S. troops.

There are 50,000 U.S. troops in Iraq today, and most of them will withdraw at the end of the year. Meanwhile, Gates is due to leave office with the Department of Defense, even though he has not yet given the day of his departure. The day of his arrival, Gates spoke to Prime Minister Nouri al-Maliki and other officials regarding the implementation of the various Iraqi ministries, especially those involved in the defense of their country. He also stated that America and Iraq will continue its long term relationship.

According to Mr. Gates, some US troops may stay if Iraq wants. America and Iraq agreed that 2011 will be the final withdrawal for the US troops. But Iraq will go beyond if Iraq’s government asked for extra help. But Gates said the Iraqi government should request that U.S. troops to stay. This has not happened yet, much to the growing impatience of U.S. commanders, they say they need to know now the plan in 2012.

He also said that they are willing to have their presence beyond that time but they also have a lot of commitments around the world. They are involved in Afghanistan and Libya as well as helping the Japanese government on the recent disaster.

“So if folks here are going to want us to have a presence, we’re going to need to get on with it pretty quickly in terms of our planning,”, Gates added.

“I think there is interest in having a continuing presence. The politics are such that we’ll just have to wait and see because the initiative ultimately has to come from the Iraqis.”, Gates piped up again.

Gates’ press secretary, Geoff Morrell said it was clear from Thursday’s talks that Prime Minister al-Maliki does want US troops to stay beyond 2011. But there are persistent rumors that the U.S. Street have ulterior motives in Iraq, and wants to stay to maintain a better balance in the Middle East and not as a safety net of the national defense of Iraq. U.S. officials openly refusing, saying there are no intentions or plans for a permanent military presence in the country.

Prime Minister Nouri al-Maliki told Gates that he expects all U.S. troops to be out of Iraq by the end of the year as required under a 2008 security agreement between Baghdad and Washington, said by the Iraq spokesman Ali al-Dabbagh.

Top U.S. commander in Iraq, Gen. Lloyd J. Austin III, made it clear that Iraq was not ready to defend their country, especially from the skies. He said the Iraqis also need assistance in data collection, logistics and the use of various weapons systems in a consistent way of war. He said there was a discussion of the Iraqi government over whether the U.S. should stay or not, and that the wind does not blow the debate in one direction, “It’s is blowing in every direction.”

He also discussed to the troops that there would be a delay in their pay. A soldier asked him whether he would be paid for his service in Iraq. He said he would be paid but he’s not sure when it is. Gates has also produced this series of events, what might happen in American troops in Iraq, Afghanistan and elsewhere because of the budget showdown.

If the government closes on April 8 to 15, Mr. Gates said that troops would receive half the payroll of April 15. If the government were to remain closed until April 30 Mr. Gates said that the troops would miss a whole check. The troops are usually paid in the first month and on the15th.When the government starts again, Mr. Gates said that the soldiers would receive the wages they were owed.

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Libya’s Effect On World Oil Prices – Fact Or Fiction?

The political turmoil in Libya has caused much speculation in the world market especially in the oil sector. The country’s political and economical instability has lead to drastic increase of oil prices in the world market. Now we ask, is Libya’s market share in the oil trading industry really significant to affect the world oil prices?

Libya, a member of the Organization of Petroleum Exporting Countries (OPEC), is known as the third largest oil producer in Africa. The political upheaval in Libya has caused shut down of operations in its oil plants thereby decreasing the country’s daily production output, their export to their trade partners and, consequently the supply of oil in these countries. However, Libya’s contribution to the world market is only 2%, other neighboring oil producing countries can compensate for the decrease in oil supply by producing more. The net decrease in the supply of oil will not be significant so as to affect an increase in the world market.

Other members of the OPEC, including Saudi Arabia the second largest oil producer in the world, have committed to increase their production to counterbalance the shortfall in Libya’s output but the steep price of oil still remain. At this point the volatility of the price in oil trading does not depend on the law of supply and demand alone. Oil traders and speculators take other factors into consideration such as the political stability of the country and the economic environment. The uncertainty that prevails in Libya affects the market significantly.

The traders are not only concerned with Libya’s political crisis but of the effect of this crisis in North Africa and Middle East countries as well. Their concern is further aggravated by the fact that other countries like Yemen, Bahrain and Syria are following suit in this political chaos as civilians clamor for political change. The recent turn of events laid bare the wave of unrest that engulfed the Middle East countries. This crisis in the Middle East post a significant impact in the market as this could mean a longer disruption in oil exportation to countries, like China and the United States, that are dependent on Middle East countries for their oil supply.

The temporary set-back in the OPEC oil cartel resulting from Libya’s uprising can be mitigated by other members. However, a repeat of the Persian Gulf War situation looms the horizon causing anxiety to traders. If this situation in Libya goes on damaging oil facilities, or worse, spread across the Middle East including Saudi Arabia, the long term disruption in oil production and exportation could really distort the balance in the world wide supply and demand of oil. At present, the demand in oil is increasing as more countries consume more oil as their standard of living increased. In China alone, where 11% of Libya’s oil is exported, there is a notable increase in the sale of cars last year.

Libya’s contribution in the oil market world wide may be considered minimal but the political and economic unrest could lead to global economic crisis. Our dependence to oil as source of energy is a big factor to this world crisis. Without alternative energy sources, we will always be affected by any disturbance in oil producing countries no matter how trivial the crisis is.