Juan Cole links today to a very interesting interview of his with Allawi for the Chronicle of Higher Education What's Next in Iraq? Juan Cole Interviews Ali A. Allawi.
Clearly Allawi has given some thought to the future of Iraq and, while he does not see anything particularly good, he seems to come to the conclusion that only an orderly end to the US occupation can (perhaps) force the Shia government to come to some semi-stable relationship with the Sunni minority.
As to why, contrary to the official American line, Allawi thinks this really is an "occupation" -- and presumably why he calls his book The Occupation of Iraq: Winning the War, Losing the Peace -- Allawi gives this summary of the reasons
Allawi: The coalition presence in Iraq is an occupation, even though the fiction is assiduously maintained that the Multi-National Force is there at the specific request of the Iraqi authorities and authorized by an enabling U.N. resolution. All elements of an occupation are there. They include the absence of a governing agreement between the MNF and Iraq, a so-called status of forces agreement; the absolute immunity and extraterritoriality enjoyed by the MNF from any Iraqi laws and directives; the subservience of the Iraqi military command to the MNF in matters of substance; and the existence of Iraqi security institutions, such as the intelligence services and a number of elite military formations, that report to the MNF only.
As to what will happen if/when the US significantly lowers its occupation troop levels, Allawi does not see that resulting in chaos or a blood bath but rather a ending of the fiction that the current Iraqi army and police are non-sectarian institutions and also a more open build up of Sunni security institutions in areas that they dominate
A U.S. pullout will lead to the strengthening of sectarian and ethnic control over their respective heartlands, with flashpoints at points of contention such as Kirkuk, eastern Mosul, Diyala, and a few neighborhoods in Baghdad. I do not think that is a particularly horrible outcome, especially if it is acknowledged and accommodated in a political settlement that pushes for a regional and confederal solution.
As to that confederal solution, Allawi sees it as all but inevitable and, given that lack of real alternatives, something to move toward
The unified Iraqi state that the U.S. is trying to pursue is a chimera. The state that is being formed now is a Shia-dominated Arab state, to which a semi-independent Kurdistan is attached, with a Sunni Arab rump in varying conditions of discontent. That is an unstable outcome.
The alternative form of the Iraqi state is an Arab/Kurdish confederation. That would presume that the Shia and the Sunni could reach a historical deal on how to manage Arab Iraq, which at present seems unachievable. A gradual retreat by the central government from its claim of power over Sunni Arab areas can pave the way for a regional solution to the crisis, a process that will be accelerated if the U.S. pullout is achieved methodically and with a federal Iraq as an end state. In fact, a U.S. pullout may be an essential precondition for achieving this objective.
It is worth reading the whole thing. It explains why the future is something that the Bush administration is not willing to embrace even though it is something very different from Iraq falling to al Qaeda, descending into a chaotic blood bath, or Iraqi insurgents coming to America to attack us in our cities.