More Post-saddam Oil Suggestions

Michael Barone writes in U.S. News and World Report about the post-Saddam options facing Iraq. His concluding paragraph discusses oil:

What about private property? Administration officials have often said that reconstruction of Iraq will be affordable because of the nation’s oil revenues and emphasize that that money belongs to the Iraqi people. But there seems to be an assumption that all the revenues should go to the Iraqi government. Why not give some of that money directly to the people? In the New Republic, John Judis points out that oil wealth in almost every country has produced an overlarge and corrupt state apparatus and has hindered the development of a vigorous private sector and civil society. There are alternatives. The Alaska Permanent Fund each year pays a dividend of 20 percent of the state’s oil profits to every citizen–$1,540 per person in 2002. The rest of the money is invested, to provide a permanent income when oil revenues decline. Alaskans regard this as personal wealth; in 1999, 83 percent of Alaska voters rejected a proposal to use Permanent Fund revenues for state government spending. A similar fund could be created for Iraqis. It could provide a payment of something like $1,000 a year–meaningful in a country where Umm Qasr dockworkers make $30 a month. This would provide every Iraqi with personal wealth and would tend to foster investment and nurture the growth of a private sector. It would give Iraqis a vested stake in the new regime. It would show that the United States has come to liberate Iraq and not to get its oil. And it would be a shining example to the leaders and the people in the other oil states in the region.

The Alaska oil fund has worked well for Alaskans. It’s an interesting suggestion. And of course I am all for privatizing natural resource ownership.