and the privatization answer to this balkanization in iraq is...?

i don't think we can do much more than note the reporting at this point.

• Iraqi leaders have all but given up on holding the country together and, just two months after forming a national unity government, talk in private of "black days" of civil war ahead.
• Signalling a dramatic abandonment of the U.S.-backed project for Iraq, there is even talk among them of pre-empting the worst bloodshed by agreeing to an east-west division of Baghdad into Shi'ite and Sunni Muslim zones, senior officials told Reuters.
• Tens of thousands have already fled homes on either side.
• "Iraq as a political project is finished," one senior government official said -- anonymously because the coalition under Prime Minister Nuri al-Maliki remains committed in public to the U.S.-sponsored constitution that preserves Iraq's unity....
• "The parties have moved to Plan B," the senior official said, saying Sunni, ethnic Kurdish and majority Shi'ite blocs were looking at ways to divide power and resources and to solve the conundrum of Baghdad's mixed population of seven million.
• "There is serious talk of Baghdad being divided into east and west," he said. "We are extremely worried."
• On the eve of the first meeting of a National Reconciliation Commission and before Maliki meets President George W. Bush in Washington next week, other senior politicians also said they were close to giving up on hopes of preserving the 80-year-old, multi-ethnic, religiously mixed state in its present form.
• "The situation is terrifying and black," said Rida Jawad al -Takki, a senior member of parliament from Maliki's dominant Shi'ite Alliance bloc, and one of the few officials from all the main factions willing to speak publicly on the issue.
• "We have received information of a plan to divide Baghdad. The government is incapable of solving the situation," he said. (By Mariam Karouny, BAGHDAD, July 21, Reuters)