Combating the Natural Resource Curse with Citizen Revenue Distr

In a New York Times op-ed earlier this year (April 9, 2003), Steve Clemons of the New America Foundation has proposed that Iraq establish an Alaska-style oil fund that would pay annual dividends to the citizens of Iraq.ii In Alaska, revenues from oil leases have been invested in a permanent fund, which has grown to $23.5 billion in 2002; part of the fund’s income is now distributed directly to Alaskans as a dividend. Clemons has proposed that a similar fund be set up in Iraq. The proposal is that Iraq should save a fixed portion of its oil revenues, which would be invested in a portfolio of international equities and bonds. This portfolio would effectively become the national trust fund, and the fund’s income would be distributed to Iraqi citizens on an annual basis. Over time, the fund would grow as a result of continuing saving of part of oil revenues, and so too would the dividend distribution.