No one can argue that the prospects for stability in Iraq are good. At best, the formation of a government will be the prelude to four months of debate over the constitution and every other divisive issue. There will follow two months of political struggle over a referendum to approve the result and Iraqis must then decide whether they can live with implementing the result. The “best case” is probably political turmoil well into 2007 and probably 2008.

Iraq has essentially run out of aid money and has no real revenue stream other than oil exports. Many long-term US aid projects will not be sustained and some will not be completed. The international community will not pay and oil revenue does not come close to meeting Iraq’s needs. Add to this political crisis at least two years of financial crisis and unemployment in excess of 30 per cent.