Marina Ottaway from the Carnegie Endowment for International Peace outlines in a brief policy paper what the current strategy for Iraq should be. To sum it up, the current momentum toward federalism is irreversible and the most important thing is to 1) convince Sunnis to accept it and 2) make sure that they get their fair share of the oil in their region. The U.S. can use troops withdrawals as a confidence-building measure that will eventually lead to this and, subsequently, a drop in violence.

I agree that the oil distribution issue is probably the biggest issue facing the success of federalism, and there are several ideas being floated to make sure that the revenues are indeed distributed fairly. In order for the Sunnis to accept federalism, one of these ideas will eventually have to be adopted. The benefits are potentially large: more accountable governance, the prevention of dictatorship under high centralization, and the easing of tensions among the country’s sectarian groups. The constitution is murky on exactly how this will happen, so dealing with this will likely be the new National Assembly’s first order of business once it forms a government. It better be, anyway.

However, there’s a much broader point I want to make about oil resources and the development of the econonomy vis-a-vis the development of democracy. You may have noticed that countries that rely near-exclusively on oil wealth tend to develop into dictatorships. I would put it at the top of the reasons why the Middle East has developed the way it has, and why countries like Venezuela and Russia are going in similar directions. If Iraq wants to become a truly plural democracy country, it must create an economy that is plural as well.

Right now, individuals in the country identify more with sectarian group interests over their individual interests, mostly because doing so will afford them more benefits than not. In order to create a diverse civil society, in which there are more than just a few groups jockeying for power, a diverse economy must be created so that Iraq doesn’t go the way of Saudi Arabia. Small businesses, trade unions, students groups, and other civil organizations would all develop because of this. And the more the better. Each has a role to play in breaking the current political oligopoly, which would in turn lead to a more peaceful, pluralistic country.

Scarcity of easily monopolized resources is often a prelude to success, as we have seen with countries like Japan that have, out of necessity, developed trade, hi-tech, and tourism from the bottom up as a means to a healthy society. That said, while the predominantly Sunni central regions may lack oil, they certainly don’t lack the means the create prosperous economies. In fact, by that standard, it is perhaps these areas that, without the injection of oil revenues, are more likely to develop economies that aren’t prone to authoritarianism, while their Kurdish and Shia neighbors are.

All of this, however, goes back to the very initial premise that the Sunnis will eventually be convinced that federalism can work and that they’ll give up the insurgency. Once they stop putting their energies into driving out “the imperialists,” maybe they’ll get started on reviving their stagnant economy and political life. While oil revenues are important for the building of the Iraqi state and its regions, the most important of all is the development of everything outside of that sector.