2021 Yearender: Mismanaging Iraq

Salah Nasrawi , Sunday 19 Dec 2021

Nearly two decades after the US-led invasion, Iraq remains in perpetual limbo

Mismanaging Iraq

Optimists believed that the parliamentary elections held in Iraq in October would solve the troubled nation’s lingering crisis, pave the way for a more stable country and deliver badly needed reforms.

Iraqis have suffered hardship over nearly two decades, and the vote that came in the footsteps of a widespread anti-establishment popular uprising gave hope that change could happen to the beleaguered nation.

However, like the half a dozen ballots that Iraq has held since the overthrow of former dictator Saddam Hussein in 2003, the latest one has proved that in a deeply flawed political system an election is a problem rather than a solution.

An embarrassingly low voter turnout and a dispute over the election’s outcome triggered further distrust in the country’s political parties, leaders, government and the electoral process itself.

Even if the struggling political groups now succeed in forming a sort of coalition government after the traditional horse-trading, any post-election euphoria is unlikely to help to fix Iraq and bring it back on its feet.

As Iraq enters a new year gripped by severe political instability, terrorism, government dysfunction, corruption and increasing foreign meddling, any hopes that the future will bring change to the country look forlorn.

Problems on this scale are usually caused by structural failures and should be addressed by policymakers and analysts beyond focusing only on superficial issues and leaving the rest to resolve themselves.

Nearly nineteen years after the US-led invasion, Iraq is still a fragile and divided country facing a Hamiltonian moment. Its most serious challenge is state and nation-building, not ballots or mere leadership changes, as many in the Iraq expert community hypothesised in regard to the October elections.

By almost any measure, Iraq’s experience following the US-led invasion has been a failure. Saddam and his authoritarian Iraqi Baath Party no longer lord it over Iraq, but the Iraqis now are as miserable as they were under Saddam, and they live in greater peril than they did under the dictator’s rule.

Since the US-led invasion, Iraq has been defined by tensions between its multiple ethnicities, which are fighting for power and resources. The root cause behind this national dilemma is Iraq’s governance, which, forged by the US occupation, is built on a sectarian quota system institutionalised as consensus democracy.

The lesson to be learned from the last two decades is a simple one: unless drastic reforms in Iraq’s dysfunctional political system are introduced to bring about more efficient and effective governance, there will be dire consequences far into the future.

This call to action is even more imperative as Iraq remains in a situation of perpetual stalemate with high hopes but tepid actions. As the country enters a new era of confusion, attempts should be made to rebuild its political system, government institutions, security forces and civil society.

Alongside its miserable polity, Iraq is facing formidable economic troubles. Despite increased aspirations and hundreds of billions of dollars in oil revenues pouring into the country’s coffers, deep changes to Iraq’s economic governance and outcomes have failed to materialise over the last two decades.

As if things were not bad enough under Saddam when the Iraqi economy was devastated by wars, conflict and UN-imposed economic sanctions, matters are a lot worse under the new regime, which remains mired in incompetence and corruption leaving the country’s economy in a shambles.

Iraq is one of the most oil-dependent countries in the world, and oil revenues amount to more than 95 per cent of the country’s exports, which account for 85 per cent of the government’s budget and 65 per cent of GDP.

Successive governments in Iraq since Saddam’s fall have relied on oil revenues to pay salaries and run a broken system with no real investment in infrastructure.

Neglect and corruption have shattered Iraq’s economy as thousands of factories and millions of hectares of arable land that took generations to build and cultivate are now sputtering and the country depends on imports of almost all its needs from abroad.

Today, Iraq has the highest proportion of state employees in the world, with about seven million people from its 40 million population living on government salaries and working either in the security forces or in the vast and unproductive bureaucracy.

Even so, as of January 2021, Iraq’s unemployment rate was more than 10 percentage points higher than its pre-Covid-19 level of 12.7 per cent.

In comparison with other oil-exporting countries, the rate of growth in Iraq is poor. In a rentier economy, oil price fluctuations have a huge impact on growth, and in Iraq’s case the fall in prices has had dire consequences, including the devaluation of the local currency and lower incomes for millions of Iraqis.

The falling prices, which have triggered additional macroeconomic volatility, have been coupled with a deepening Covid-19 crisis, worsening security conditions and potential deterioration in the education system, as well as the intensification of climate change shocks.

A key challenge for the country is the deeply entrenched corruption, which is pervasive at all levels of government. Billions of dollars of oil money have been smuggled out of Iraq in corrupt deals since the 2003 invasion. Consecutive governments since then have promised to tackle corruption through economic and political reforms. But these promises have not been followed through by sufficient action.

Addressing the impacts of these risks means overhauling the entire system in Iraq. They cannot be dealt with by short-term policies or illusionary reforms such as those envisioned in a white paper by Prime Minister Mustafa Al-Kadhimi’s cabinet that is trying to leave them for the next government.

The new government that has yet to be formed must begin with tangible actions to restore trust in order to tackle pandemic challenges and achieve sustainable development. The economic status of the ruling cliques in Iraq says a lot about why the country is still underdeveloped.

Of paramount importance is stopping graft, and one measure of how far this is succeeding will be the degree to which corruption by Iraq’s oligarchs is fought. Iraq will not get on the right track until corruption is eliminated. The money that is today spent on corruption could have a positive impact on Iraq’s development.

Perhaps Iraq’s biggest challenge is to find leaders who can implement change. Since Saddam’s ouster, Iraq has been saddled with poor leadership, which explains why successive governments have failed to steer the country away from the quagmire and start its reconstruction.

Leadership failure is at the centre of all the country’s challenges after corruption.

It is hard, and probably inaccurate, to refer to the factional leaders who have been in charge of governments in Iraq since 2003 as the country’s political elite or political class. They are kleptocrats who compete with various rivals for power and for the foreign exchange generated by Iraq’s lucrative oil reserves.

Kleptocracy in Iraq has introduced corruption, fraud, cronyism, underdeveloped infrastructure, poor leadership and failed development. These things have mostly been caused by the type of leaders empowered to take on leadership positions.

Iraq’s future may now centre around waiting for a new type of leaders to emerge who will be capable of carving out a prosperous future for their country by creating long-term sustainable improvements and devise, implement and evaluate reconstruction strategies.

Iraq’s current leaders have mismanaged the post-Saddam order. The country’s coming leaders need to find a model that will work for Iraq as they navigate dangerous waters in the years ahead. Iraq remains at a crossroads, and nothing can save it unless its problems are properly addressed.

Unless a new generation of visionary, skilled and trusted leaders emerges and institutions commanding respect are firmly established, there are no reasons to be optimistic about Iraq’s future and the country will remain a failed state.

*A version of this article appears in print in the 23 December, 2021 edition of Al-Ahram Weekly

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