Obama Says U.S. Focus in Iraq Turning to Economic Development, Oil Output

President Barack Obama said the U.S. will focus on Iraq’s continued economic development and increased oil production as the American military force pulls out after almost nine years of conflict.

With the last U.S. troops leaving by the end of the year, “Iraq is assuming its rightful place among the community of nations,” Obama said at a White House news conference with Iraqi Prime Minister Nouri al-Maliki. “Our goal is simply to make sure that Iraq succeeds.”

The president said that includes fostering additional foreign investment in Iraq and bolstering oil output.

Obama and Maliki met at the White House to discuss an agenda that included future U.S. economic and military assistance, the influence of neighboring Iran and Iraq’s regional security and stability.

Obama said that with oil production rising, Iraq can again become “one of the region’s leading oil producers.” Iraq has the world’s fifth-biggest crude reserves and pumped 2.71 million barrels a day last month, according to data compiled by Bloomberg.

“We hope that the American companies will have the largest role in increasing our wealth in the area of oil and other aspects as well,” Maliki said through a translator.

Link to U.S.

Maliki, a former rebel who led the first full-time government after the toppling of Saddam Hussein and who is now serving his second term as premier, needs to maintain a strong link with the U.S. as American forces end their mission Dec. 31, according to Ken Pollack, director for the Persian Gulf at the National Security Council during the Clinton administration.

“Maliki needs to be able to show the people of Iraq and the Iranian government that the U.S. has not abandoned Iraq,” Pollack said. “The Iraqi people want the troops gone but they don’t necessarily want to be cast adrift. And they’re very nervous.”

Opposition to the war in Iraq was a central element of Obama’s 2008 presidential campaign. Now, as he’s seeking a second term, the president is showcasing the end of military involvement with events this week that include the talks today and a news conference, augmented by an address to U.S. troops at Fort Bragg, North Carolina, on Dec. 14.

Obama “needs to demonstrate that we haven’t just walked away from Iraq, that while we’re withdrawing troops, we still have a strong relationship, and we’re still paying a lot of attention,” Pollack said in a telephone interview before the White House meeting.

‘Heads Held High’

The last American troops in Iraq will depart “with their heads held high,” Obama said. The U.S. won’t leave “big footprints” in Iraq once those forces are gone.

The U.S. pullout has drawn criticism from Republicans.

Senator John McCain, who ran against Obama for the presidency in 2008, said Obama and Maliki “have failed in their responsibilities with regard to our shared interest.”

The U.S. interest in a stable Iraq demands U.S. troops remain beyond this year, the Arizona Republican said in a statement. “But domestic political considerations in each country have been allowed to trump our common security interests.”

The agreement that kept troops in the country through the end of the year was negotiated in 2008 under President George W. Bush. The Iraqi government declined to provide immunity from prosecution for U.S. troops to stay into next year.

War Costs

Since the war in Iraq began in March 2003, 4,487 Americans have died there and 32,226 were wounded, according to Pentagon figures as of Dec. 9.

When it passes a fiscal 2012 defense appropriation, Congress will have authorized at least $823 billion for Iraq military operations, $47.6 billion for State Department and Agency for International Development reconstruction and an additional $7.2 billion for Veterans Administration Iraq-related medical issues, according to the Congressional Research Service.

The Pentagon has spent $720 billion of its authorized funds through Sept. 30, according to comptroller data.

The U.S. military is withdrawing its remaining 8,000 military personnel and 5,000 contractors from Iraq as the year- end deadline nears. That is down from a peak of about 300,000 Americans in Iraq in 2007, including almost 170,000 uniformed personnel as well as civilians and contractors.

‘Weak and Fractious’

Iraq remains deeply troubled and restiveness in the Persian Gulf may have consequences for the oil market and the global economy.

“Iraq remains weak and fractious,” Pollack, director of the Saban Center for Middle East Policy at the Brookings Institution in Washington, told the Senate Armed Services Committee in testimony on Nov. 15. “It is not ready to be without an external peacekeeping presence” and “its political leadership has not demonstrated anything like the maturity that will be required to prevent the country from sliding back into civil strife.”

Obama said the two nations will have an active military-to- military relationship, from training Iraqi pilots on the 18 Lockheed-Martin Corp. (LMT) F-16 fighter jets that Iraq has agree to buy to ensuring that sea lanes “in and around Iraq and through the region” remain open for international commerce.

“We’ve got to train their pilots and make sure that they’re up and running and that we have an effective Iraqi Air Force,” he said.

$2.3 Billion Deal

The deal to sell Iraq additional F-16s, which the administration formally announced today, is worth about $2.3 billion, according to the White House.

The U.S. will maintain its embassy in Baghdad and affiliated consulates after Dec. 31. About 16,000 personnel will serve under the embassy’s umbrella next year, according to State Department figures.

Obama said that the embassy’s diplomatic and technical staff is “going to be comparable to other countries that we think are important around the world.”

After the press conference, Obama, Maliki and Vice President Joe Biden went to Arlington National Cemetery. Obama and Maliki jointly laid a wreath of red and white carnations at the Tomb of the Unknowns and stood briefly in silence, followed by the playing of taps.

To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net; Hans Nichols in Washington at hnichols2@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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