The Kurdish president of Iraq, Jalal Talibani, with his two vice-presidents, the Sunni Tariq al Hashimi and the Shiite Adil Abdul Mahdi.
The Kurdish president of Iraq, Jalal Talibani, with his two vice-presidents, the Sunni Tariq al Hashimi and the Shiite Adil Abdul Mahdi.
The Kurdish president of Iraq, Jalal Talibani, with his two vice-presidents, the Sunni Tariq al Hashimi and the Shiite Adil Abdul Mahdi.
The Kurdish president of Iraq, Jalal Talibani, with his two vice-presidents, the Sunni Tariq al Hashimi and the Shiite Adil Abdul Mahdi.

Three's a crowd


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The new rules that will govern the next Iraqi parliament have so far been overlooked, Reidar Visser writes, but their effects will be profound. In the past four weeks, the world has rediscovered the political complexities of Iraq. The continuing de-Baathification mess, which saw numerous candidates barred from the upcoming elections thanks to partisan score-settling, has demonstrated that there are still serious limits to democracy and the rule of law in the country. Journalists and commentators have focused on the systematic efforts to undermine politicians and parties hostile to the ruling coalition and its allies; some have even suggested that the plan to withdraw US forces from Iraq might be in jeopardy.

What has yet to receive serious attention in this chaos is that regardless of the outcome of the de-Baathification process, the fundamental rules of government formation in Iraq are scheduled to change in less than a month's time. Back in 2006, the government headed by Prime Minister Nouri al Maliki was formed on the basis of a Byzantine procedure involving special majorities and power-sharing between ethno-religious communities. There was a requirement that the president - who in turn invites the prime minister-designate to form a government - be elected with a two-thirds majority in parliament.

The president was required to stand for office alongside two vice-presidential candidates, with a single two-thirds vote required to fill all three positions - and with an expectation among the dominant political parties that this triumvirate should represent the three main ethno-sectarian communities of Iraq, Shiite Arabs, Sunni Arabs and Kurds. As a consequence, the selection of the prime minister also required a pre-vote consensus among the two-thirds majority required to approve the president; it is no surprise, therefore, that almost five months passed between the December 2005 elections and the formation of Maliki's government.

These arrangements were only transitional, stipulated to last from 2005 to 2010 and reflecting the novelty of such highly formalised structures of power-sharing in Iraq. The three-man presidency council is set to expire after the March 7 elections and henceforth, according to the constitution, governments will be formed on the basis of a new set of rules. The president is to be elected separately from his deputies, and if no candidate receives two-thirds of the vote then a simple majority will suffice. In theory, then, forming the next Iraqi government could be a lot easier than it was in 2006. Beyond the removal of the supermajority requirement, there is also no stipulation for consensus defined in ethno-sectarian terms between Kurds, Sunni Arabs and Shiite Arabs. The threshold required to assemble a winning coalition has been lowered substantially; regardless of the results of the vote, Iraq's next parliament will be governed by radically different political dynamics.

Evaluating the effects of this shift depends on how one understands Iraq as a state and a nation. For those who believe in a nonsectarian Iraq, the change appears to be a positive one. First and foremost, abandoning the requirement for a supermajority means diminishing the number of special interests that must be accommodated simply to form a cabinet. It should now be possible to construct a government that actually agrees on the details of a coherent political programme - a stark contrast to the current coalition, in which the only truly common agenda is the need to hold on to power.

So there is optimism among nationalist and secularist Iraqis, who have criticised the present power-sharing arrangement for solidifying rather than dissipating ethno-sectarian rifts, and for placing party interests above those of the people as a whole. In their view, the way to eliminate corruption and make government more effective is to reduce the size of the cabinet: nationalist Iraqis will typically say they would prefer a professional and effective government made up by 20 competent Christians to an oversized "government of national unity" based on a carefully calibrated attempt at accommodating the wishes of parties claiming to speak in the name of Sunni and Shiite interests.

For a while, especially in the first part of 2009, Maliki himself began to suggest that too much power-sharing could create a paralysed and ideologically incoherent cabinet - highlighting the extent to which Iraqi nationalist ideals exist to an equal degree among Sunnis and Shiites, if perhaps not among Kurds. But the prospect of these new constitutional arrangements has aroused concern, particularly among established politicians and parties: majority rule will mean more power for those in government, but it poses the threat that the "losing" parties will be excluded altogether. Most of the dominant parties in the Maliki government prefer instead a permanent formula for power-sharing among the three big ethno-sectarian communities - and last year attempted to derail the scheduled change by inserting a clause in the draft revised constitution that would perpetuate the three-man presidency council. Ironically, however, bitter disagreements among these parties - including over governance of the oil sector - prevented them from bringing the revision to a vote.

Similarly, the knee-jerk reaction in international think-tank circles has been fear that the era of power-sharing is coming to an end. These analysts, like the exiled elites who returned to post-2003 Iraq, are largely accustomed to thinking of the country as a conglomerate consisting of three monolithic communities; today they are similarly alarmed at the prospect of a new government where the ratio of Kurds and Sunni Arabs may be different from their share of the total population. The cure now being proposed is to encourage the Iraqis to preserve as much as possible of the current system and to ignore the stipulated change. Surely, it is said, nothing prevents Iraqis from forming a government of national unity if they wish.

Even if it would be hard to retain the powerful, veto-wielding three-person presidency council in its present form without first amending the constitution, there is in principle nothing to stop the formation of another grandiose cabinet with 30 portfolios representing every conceivable ethnic, sectarian and party interest. The question is whether this attempt to hold on to rules that were adopted by a narrow elite of Iraqis who returned from exile after 2003 would be of any benefit to the country and its people. The idea of ethno-sectarian quotas became the dominant principle of government in Iraq in 2003-2004 during the rule of Paul Bremer, who famously exemplified its underlying logic by referring to a gathering of seven Iraqis as "unrepresentative" because only one Sunni Arab was present. (1.4 would have been the mathematically correct number.) For its part, Tehran has repeatedly made it clear that it prefers the perpetuation of an identity-based system of government in Baghdad, under which it may more easily exploit its alliances with Iraqi Shiite Islamists. Conversely, the principal critics of power-sharing have been those Iraqis who did not go into exile, and not merely the secularists among them: in March 2004, even the Shiite Grand Ayatollah Ali al Sistani described the idea of a tripartite presidency as a dangerous precedent that could lead to the partition of Iraq.

The ultimate effects of the constitutional change will therefore be determined by the outcome of a larger debate over how Iraq chooses to define itself. The paradigm of an ethno-sectarian trinity has won a surprising number of adherents in the international community, but it has not delivered much to Iraqis in terms of security, governance and services; the nationalist conception of a single polity, without regard to ethnic or sectarian divisions, is frequently dismissed in the same circles as an utopian fantasy, ill-adjusted to the realities of post-Saddam Iraq.

It is too soon to determine which vision will prevail, and the results of the upcoming elections may not settle the issue. We may see the creation of a hybrid coalition composed of non-sectarian secularists and nationalists with Kurds; it is equally likely that the Shiite Islamists, if they fare well at the polls, could again create an alliance defined in sectarian terms, with or without Kurdish partners. Some secularists and Sunnis would no doubt be invited to take part in that coalition as token representatives - and if no invitation is proffered, they may be tempted to ask for one to continue guarding their own interests. But for the rest of Iraq, the question is larger than who holds which cabinet post: the decisive issue is whether the limited vision of a compartmentalised Iraqi nation - espoused and enshrined by Americans and Iranians alike as a palliative against post-war chaos - will be once again given a new lease on life.

Reidar Visser is the editor of the Iraq website historiae.org, a member of the Gulf Research Unit at the University of Oslo and a research fellow at the Norwegian Institute of International Affairs.

MATCH INFO

Quarter-finals

Saturday (all times UAE)

England v Australia, 11.15am 
New Zealand v Ireland, 2.15pm

Sunday

Wales v France, 11.15am
Japan v South Africa, 2.15pm

How Tesla’s price correction has hit fund managers

Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.

It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.

The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.

Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.

Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.

He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.

AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”

A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.

Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.

Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.

Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.

By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.

Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.

In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”

Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.

She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.

Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.

FIXTURES (all times UAE)

Sunday
Brescia v Lazio (3.30pm)
SPAL v Verona (6pm)
Genoa v Sassuolo (9pm)
AS Roma v Torino (11.45pm)

Monday
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Disability on screen

Empire — neuromuscular disease myasthenia gravis; bipolar disorder; post-traumatic stress disorder (PTSD)

Rosewood and Transparent — heart issues

24: Legacy — PTSD;

Superstore and NCIS: New Orleans — wheelchair-bound

Taken and This Is Us — cancer

Trial & Error — cognitive disorder prosopagnosia (facial blindness and dyslexia)

Grey’s Anatomy — prosthetic leg

Scorpion — obsessive compulsive disorder and anxiety

Switched at Birth — deafness

One Mississippi, Wentworth and Transparent — double mastectomy

Dragons — double amputee

Listen to Extra Time
UAE currency: the story behind the money in your pockets
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MATCH INFO

Chelsea 4 (Mount 18',Werner 44', Hudson-Odoi 49', Havertz 85')

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