All posts by Salah Nasrawi

ما بعد التجربة

Desert Storm through the eyes of an Iraqi reporter

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Desert Storm through the eyes of an Iraqi reporter

As Iraq braced for war with the US, Iraqi AP reporter Salah Nasrawi was torn between journalistic duty and patriotism.

Salah Nasrawi

On the eve of the 1991 Gulf War, I was working as a correspondent for the American news agency, the Associated Press (AP), in Saddam Hussein’s Iraq. My job was not only demoralising, exhausting and hazardous, it was virtually suicidal.

War was looming, and I was pulled between my sense of duty and my sense of patriotism – the dilemma of a native journalist reporting on a conflict for a news organisation that, in theory, belonged to the other side – to the enemy.

I had already spent more than six years reporting for the BBC and AP on the Iraq-Iran war, which ended in August 1988. For much of that time, I was in the trenches along the 1,200km-long frontline or investigating the war’s human cost and its political and social impact.

I had my own war to fight, too, as I battled to maintain neutrality between the two sides’ narratives and positions. Complying with global journalistic standards often meant employing “tricks” to avoid Saddam’s censors.

Sometimes it worked. But sometimes it didn’t.

There were occasions when I faced the wrath of Iraq’s Ministry of Information or its ruthless intelligence service, the Mukhabarat – often for stories they considered negative or insufficiently patriotic.

But if covering the Iraq-Iran war for foreign media was daunting, it was nothing compared to reporting on the US’s Operation Desert Storm for a major American news agency.

Under Saddam’s authoritarian rule, there were strict limitations on what could be reported. The cost of breaching those could be grave. An Iraqi reporter might face death for gathering information considered to be confidential or for writing an article deemed to be harmful to the state.

Really, I should have quit. But that would have meant losing both my job and the opportunity to be on top of the biggest story in the world at the time.

When I contemplated resigning from AP during a heated discussion with then Minister of Information Latif Nussayif Jassim al-Dulaymi about a report I had written on Iraq’s war preparations, I was surprised that he rejected the idea.

“I will shoot you with my own gun and hang your body over the bridge,” he thundered.

He had his reasons.

We were, after all, showing the world horrific scenes of death and destructioninflicted by the Americans, images that he knew could prompt the world to demand that the US stop its bombardments.

American reporters fled before the bombs fell 

Many news organisations kept their teams away from the front lines, arguing that it would be too dangerous for their reporters to stay in Baghdad.

Then US President George Bush senior personally rang the heads of US media networks to ask them to ensure that their employees left.

Few foreign journalists were willing to remain. As they left and the doors to Iraq closed, I felt acutely aware of being stuck with my own destiny – for better or for worse.

The countdown to war had started as Saddam refused to comply with the UN’s January 15 deadline to withdraw from Kuwait, and I found myself deeply immersed in covering the crisis.

My fears gave way to my journalistic instinct.

On January 8, 1991, I made my fifth trip to Kuwait under Saddam’s occupation. It was a trip organised by the Ministry of Information to show Iraqi reporters the trenches and fortifications built by Iraqi soldiers across the country.

There was no doubt, war was imminent

On my return to Baghdad, I met the Palestine Liberation Organisation (PLO) leader Yasser Arafat, whom I had known for years.

I had been at Arafat’s office less than two months before, when, on November 29, 1990, he had met the former Japanese Prime Minister Yasuhiro Nakasone. Nakasone had previously met Saddam in an effort to convince him to defuse the crisis.

Go and tell Saddam that Iraq will be sent back to the pre-industrial age if he does not withdraw from Kuwait, Nakasone had basically told Arafat.

Now, I told Arafat that war was unavoidable.

To my surprise, he called an urgent press conference at his residence in an Iraqi government guesthouse, telling journalists: “There will be no war. There will be no war. I promise.”

Once the press conference was over, Arafat was whisked along the 1,000km-long highway to neighbouring Jordan in a Mercedes. When the war began two days later, US warplanes bombed that same road.

There was one last-chance bid for a peaceful resolution from the then-UN Secretary-General Javier Perez de Cuellar. He arrived in Baghdad on January 12, 1991, to tell Saddam to pull out of Kuwait.

I was the only reporter on that historic day to have access to De Cuellar’s spokesman, Francois Giuliani, at a secret guesthouse. Giuliani, a former Reuters journalist, told me that De Cuellar’s encounter with Saddam was scheduled for after the Iraqi leader’s afternoon nap the next day. From that, I immediately understood that the UN chief’s mission was doomed.

Baghdad, the ghost town

I no longer questioned whether Iraq would be bombed, just what would become of the “cradle of civilisation”.

The moment we would find out came on Wednesday, January 16, 1991, the day after the deadline set by the UN.

Government offices and shops were shuttered. Windows were taped. Tens of thousands of Iraqis crammed into buses and cars and fled the capital.

As dusk approached, the streets were dark and quiet. Troops manned roadblocks at the main junctions, but Saddam’s henchmen seemed to have given up altogether.

The city that history books called Madinat al-Salam, or the City of Peace, was bracing for war.

My headline that night was: Saddam defiant, Iraq bracing for military showdown, Baghdadis leaving or cowering at home.

At 2:30am, the first bombs fell. Explosion after explosion rattled the city. Iraqi soldiers fired back from anti-aircraft batteries positioned on rooftops.

By morning, Baghdad was a ghost city. Its main government buildings and communication centres either disabled or heavily damaged.

There was no electricity or running water.

The city of “A Thousand and One Nights” seemed to be on its way back to the Middle Ages.

Today, I am retired from active reporting. Yet, I am still stuck with Iraq as much as it is stuck with me.

The 1991 Gulf War, as I have repeatedly argued in all my writing, including my memoirs, A Life of Paper, was an eruption that has left Iraq forever shaken, and with it, my own life too.

This article appeared on Al-Jazeera on January 20, 2016

Iraq-Diplomacy

Myth and reality of the Iraqi mediation

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Myth and reality of the Iraqi mediation

Iraq cannot help broker Iranian-Saudi peace negotiations, writes Salah Nasrawi

When reports emerged last week that Iraqi Foreign Minister Ibrahim Al-Jaafari wanted to mediate between Iran and Saudi Arabia in order to end the standoff over the execution of a Saudi Shia cleric in Saudi Arabia, many Iraqis were taken by surprise.

Commentators and writers on social media received the reports with scepticism, and many even joked about the ability of Iraqi diplomacy to assume regional responsibilities in foreign affairs when the country remained deeply immersed in domestic ethnic and sectarian conflicts.

Still, the Iraqi government’s offer to broker a deal between the two regional rivals was not that funny, and many thought the suggestion raised some serious questions about the country’s fortunes in its neighbourhood’s newest conflict.

Al-Jaafari’s surprise initiative came after Riyadh’s execution of popular Saudi Shia cleric Nimr Al-Nimr led to a row with its regional nemesis, Iran. He also made an intense four-day trip in shuttle diplomacy that included Tehran, Muscat and Cairo in efforts to defuse the crisis.

But by the time Iraq launched its meditation initiative, tensions between the two Middle Eastern rivals had already erupted into a fully-fledged regional conflict with the potential for further flare-ups.

Iran’s supreme leader Ayatollah Ali Khamenei warned that the oil-rich kingdom would face “divine revenge” for its execution of Al-Nimr, and a spokesman at Iran’s foreign ministry said Saudi Arabia would “pay a high price”.

Iranians protesting against Al-Nimr’s execution stormed the Saudi Embassy in Tehran, hurling rocks and Molotov cocktails at the building. Similar demonstrations were held at the offices of the Saudi consulate in the holy city of Mashhad

After its embassy in Tehran was sacked by angry Iranians, Riyadh severed diplomatic ties with the country and recalled its ambassador. Several Saudi allies in the Gulf Cooperation Council (GCC), in addition to Djibouti and Sudan, also cut or downgraded diplomatic ties with Iran in solidarity with Saudi Arabia.

But Saudi Arabia’s execution of Al-Nimr prompted uproar from Shias in Iraq, Lebanon, and Pakistan and infuriated other Shia communities across the world.

The rupture in diplomatic ties between Iran and Saudi Arabia also raised fears among world capitals that it could worsen the conflicts in Iraq, Syria and Yemen and undercut the international campaign against the Islamic State (IS) terror group which now threatens to take over major cities in Libya.

Baghdad’s worries about escalation are well founded as the tensions could worsen the country’s sectarian conflict. Iraq fears that the new rift could threaten national reconciliation efforts, as the Shia-led government in Baghdad is urgently trying to reach out to Sunnis in the country as it seeks to retake territory controlled by IS and is particularly vulnerable to any upsurge in anger between the Muslim sects.

Yet, the question remains of whether a country that is embroiled in a bloody sectarian conflict with far-reaching consequences on its neighbours can help find some sort of a compromise in the most dangerous regional crisis since the Iraq-Iran War of 1980-1988.

Away from the headlines, there are number of reasons why Baghdad cannot mediate between an Arab kingdom which sees itself as the bulwark of the Sunni world and a Persian nation ruled by a Shia theocracy which aspires to lead the world of Muslim Shias.

Naturally, any mediation presupposes that the two sides are willing to accept the mediator. Yet, that willingness is nowhere to be seen. Moreover, the two powers are apparently set on pulling the entire region into a struggle between Islam’s two main sects of the Sunnis and the Shias.

It is no secret that Saudi Arabia does not trust the Shia-led government in Baghdad and considers its leaders to be the stooges of Iran. Since the ouster of former Iraqi president Saddam Hussein’s predominantly Sunni regime, the kingdom has refused to reach out to the Shia government’s leaders, accusing them of opening the door to Iranian influence in Iraq.

Saudi Arabia reopened its embassy in Baghdad only a few days before Al-Nimr’s execution, having earlier rejected all calls to send a diplomatic mission to the country after the downfall of Saddam in 2003.

But the resumption of full diplomatic ties does not seem to indicate that Iraqi-Saudi relations are now out of the dark. Uncertainty, caused by a lack of mutual trust and divergent regional and domestic policy agendas, is expected to remain the norm in their bilateral relations.

Meanwhile, the Iranian-Saudi escalation is bound to change the rules of the game in the proxy wars in Iraq. The increased hostility will not only represent yet another hurdle for regional and international action to combat IS, but will also pit Iran and Saudi Arabia against each other in a direct confrontation in Iraq.

Only a few days before the eruption of the new crisis, Saudi Arabia unveiled plans to create a new Sunni-dominated Islamic military alliance devoted to fighting global terrorism and plans to set up a “Strategic Cooperation Council” with Turkey.

The two moves were seen by Baghdad as primarily motivated by regional rivalry with Iran and not the fight against terrorism. For Iraq, the strategy aims at creating a new regional order with Saudi Arabia as one of its pillars that could throw the delicate international coalition against IS off balance.

The standoff is also expected to have negative effects on Iraq’s home front. One of its major consequences is increasing sectarianism inside Iraq. The execution and ensuing crisis has the potential to inflame the Shia-Sunni divide as the country braces itself for the post-IS era.

Another reason why Al-Jaafari’s offer of meditation between Iran and Saudi Arabia represents a strategic blunder is the growing gulf between the government in Baghdad and the Iran-backed Shia militias that have been increasingly operating as the country’s main military and political force.

Thousands of supporters of the main Shia militias rallied in Baghdad and other Iraqi cities last week, chanting slogans against the Saudi ruling family and denouncing Al-Nimr’s execution.

Leaders of the three most powerful militias, the Badr Organisation, Asaib Ahl Al-Haq and Kataib Hizbullah, which organised the rallies, called on Iraqi Prime Minister Haidar Al-Abadi to shut the Saudi Embassy in Baghdad and expel the Saudi diplomats.

Some other less-prominent militias threatened to retaliate against Saudi Arabia for the execution of the Saudi cleric.

In contrast, the ruling Shia National Alliance in Iraq reacted by issuing a statement condemning Al-Nimr’s execution as a violation of human rights and “transgression against the sublime status of [Muslim] clergymen”.

The Iranian-Saudi rupture is stoking tensions between the Shia ruling groups and the rising militia leaders. The conflicting reactions to the Iranian-Saudi standoff are a reflection of the sort of quasi-arms race for influence that they are now engaged in.

Beneath the turmoil looms a complex power struggle between the Shia groups that reveals much about the direction in which the country is heading. Real power rests with an inner circle of Shia oligarchs, and this is increasingly being contested by the militias.

The Iranian-Saudi tensions are just one of the challenges which are expected to reinvigorate the Shia power struggle. What Al-Jaafari and the Shia-led government have been doing by offering unsolicited mediation is to display moderation versus the radicalism shown by the militia leaders.

When Arab foreign ministers finally met in Cairo on Sunday to discuss the standoff, it was disclosed that there was no Iraqi diplomatic initiative to defuse the Iranian-Saudi crisis. Instead, the ministers condemned the attacks on the Saudi diplomatic missions in Iran and warned that Tehran would face wider opposition by the Arabs.

While keeping observers guessing, Al-Jaafari endorsed the pan-Arab resolution, which also denounced Iran’s ally the Shia Lebanese group Hizbullah, infuriating the Iran-backed Iraqi Shia militias.

“We didn’t want to break the Arab consensus,” Al-Jaafari told reporters afterwards. “The endorsement was to ease the tensions,” said ministry spokesman Ahmed Jamal in a statement.

While Al-Jaafari’s U-turn underscored the Iraqi Shia ruling elite’s keenness to display moderation to sceptical Sunni Arab governments vis-à-vis the hardline militias in Iraq, many Iraqi politicians believe the move conceals the government’s own weak diplomacy.

“Al-Jaafari behaved as if he owned the state. It was a huge scandal and an insult to Iraq,” said a member of the parliamentary foreign affairs committee Mithal Al-Alousi in a statement.

Iraq-ISIL-Terrorism

No end in sight for Iraq’s nights of terror

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No end in sight for Iraq’s nights of terror

A victory against ISIL will depend on an inclusive Iraqi government and new national security forces.

Salah Nasrawi

On Monday night, terror descended on the Iraqi capital when gunmen and suicide bombers stormed a shopping mall in a busy, predominantly-Shia area, killing and wounding dozens of people and spreading panic among residents.

An even deadlier attack almost simultaneously killed at least 20 people in the beleaguered town of Muqdadiyah northeast of Baghdad. A bomb exploded at a cafe, and a suicide bomber detonated an explosives-rigged vehicle after people gathered at the scene.

The series of attacks that were claimed by the Islamic State of Iraq and the Levant (ISIL) group, was the nightmare scenario that intelligence and security experts have been warning against as peace and stability remain fragile in Iraq.

And, like all bad news, more tragic events followed fast. At least seven Sunni mosques and dozens of shops were firebombed and 10 people were shot and killed in Muqdadiyah the next day in what appeared to be retaliatory sectarian attacks.

For Prime Minister Haider al-Abadi, the bombings were “a desperate” move by ISIL after “victory [was] achieved” through the retaking of the key western city of Ramadi from the group.

However, what the escalation indicates is that the prospect of the total defeat of ISIL remains far off. ISIL’s decentralised networks in Iraq seem to have become more decentralised and still capable of carrying out large-scale attacks.

There are two sets of factors that explain why the group remains the most significant threat to Iraq: First, its adaptation to new circumstances and methods, and second, the failure of Iraq’s political elite to end the country’s paralysis.

What accounts for ISIL’s ongoing effectiveness in the face of unprecedented onslaught? The answer lies in the group’s ever-changing nature. Since its inception as al-Qaeda in Iraq, the organisation has shown a surprising readiness to adapt its mission and tactics.

The group’s capacity for change is manifested by its ability to be more appealing to recruits and attract new allies, making it harder to find and destroy.

Despite a number of military setbacks across Iraq in the past year, ISIL’s manpower and their ability to carry out attacks do not seem to be waning.

The ongoing attacks in Baghdad and other urban centres are the work of enormous sleeper cells adopting new techniques that make them hard to detect.

As for the political deadlock, this week’s violence has confirmed that the country’s stabilisation will depend largely on resolving its lingering communal conflicts and establishing an all-inclusive, power-sharing process to replace the current dysfunctional ethnic and sect-based quota system.

Much of ISIL’s recruitment comes from disgruntled Iraqi Sunni Muslims who feel excluded and marginalised. Without fair and effective political representation, many feel that they are left with few alternatives for addressing their grievances and resort to joining violent groups like ISIL.

Iraq’s security problems also have some roots in the Shia militias, which are making a bad situation worse.

The militias, which were supposedly created and expanded to fight ISIL, are now assuming more power.

The militias’ rise in political stature and their increasing role in policing neighbourhoods are undermining the security establishment and weakening its resolve to carry out its duties and fight terrorism.

This precarious security situation has worsened communal violence and criminality. Armed clashes between tribes and attacks by armed groups – which include murder, kidnapping for ransom, rape and other violent crimes – are now widespread.

For months, residents in Iraq’s main port city of Basra have been complaining of pervasive lawlessness as armed tribesmen fight one another over economic interests and influence.

In Baghdad and other cities, scenes of unidentified, bullet-riddled bodies strewn in the streets are normal sights.

Another bad omen for Iraq that could have far-reaching consequences for the country’s stability is its faltering economy and financial crisis caused by plummeting oil prices.

The general assessment is that low oil prices are likely to persist, and given the fluid situation in Iraq, security could deteriorate to the point of chaos.

The government has halted spending and imposed sever austerity measures, including the elimination of jobs, higher taxes, and salary cuts for public servants and pensioners.

While the security forces will bear the brunt of the decline in revenues, cuts in spending will damage development and could be a precursor of worse things to come. The economic crisis has led to street protests, and emerging troubles are expected to add a new source of instability to the ISIL violence and Iraq’s fractious sectarian system.

If anything, victory in the campaign again such violence will depend on whether Iraq’s feuding factions can agree on an inclusive government and new national security forces that could defeat ISIL and make Iraq safe from the ongoing threat of terror attacks.

Source: Al Jazeera

Iraq-Iran-Saudi Arabia

Can Iraq survive the Iran-Saudi row?

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Can Iraq survive the Iran-Saudi row?

Analysis: The Iranian-Saudi rupture threatens to derail Iraq’s war efforts against ISIL.

Salah Nasrawi

When Saudi Arabia’s Ministry of Interior announced the execution of the Shia religious leader Nimr al-Nimr on Saturday, many feared that Iraq would inevitably be caught in the dark storm expected to gather over relations between Saudi Arabia and its regional rival Iran.

The question wasn’t whether al-Nimr’s execution would put Iraq in the midst of the crisis between the two regional heavyweights, but rather to what extent the new conflict will inflame the Iraq’s existing sectarian tensions.

Only a day after Riyadh cut its diplomatic ties with Tehran after Iranian protesters stormed its embassy in response to al-Nimr’s execution, blasts rocked two Sunni mosques in central Iraq.

A least one man, a muezzin, the person who calls for prayer, was killed in the attacks in two districts of south Baghdad.

Thousands of Iraqi Shia Muslims demonstrated on Monday outside the heavily fortified Green Zone in Baghdad which hosts the Saudi embassy, condemning al-Nimr’s execution with some demanding severing relations with Saudi Arabia. There were similar demonstrations in other Iraqi cities.

The protests followed outrage voiced by Iraq’s Shia political and religious leaders over the execution of al-Nimr and other Shia activists. Ayatollah Ali al-Sistani, Iraq’s most senior Shia authority, blasted the execution as “unjust and an aggression”.

Behind the backlash against the executions, however, lie more serious problems. Iraq is particularly vulnerable to the Iranian-Saudi feud, which threatens to deepen its own lingering sectarian conflict.

Both nations back opposing parties and groups in Iraq and pursue geopolitical interests in the country.

The question now is whether the crisis over al-Nimr’s execution will inflame existing ethnic and sectarian tensions in Iraq as its Shia-led government tries to bring the war against the Islamic State of Iraq and the Levant group (ISIL) to a successful conclusion.

The negative effect is due to two mechanisms which are not mutually exclusive: Peripheral, indirectly, through the spillover from Iranian-Saudi rift; and central, due to Shia-Sunni sectarian polarisation inside Iraq.
By and large, the Iranian-Saudi rupture is stoking tension that threatens to derail Iraq’s efforts to build a regional and global front in the war against ISIL.

A string of defeats inflicted in recent weeks in Iraq, most recently in Ramadi, have raised hopes that ISIL’s demise may be closer than had been thought.

The Iranian-Saudi escalation, which is bound to change the rules of the game in the proxy wars in Iraq, will most probably undermine Baghdad’s campaign to defeat ISIL. Saudi-Iran tensions will not only represent yet another hurdle for regional and international action to combat ISIL, but will pit both Iran and Saudi Arabia in a direct confrontation in Iraq.

Today, Riyadh’s new assertiveness –  as Nawaf Obaid, a Saudi security adviser, has summed it up in an article in the London-based newspaper Al-Hayat on Tuesday – is all about filling the vacuum in “the leadership of the Arab world” in absence of its “traditional pillars, Egypt, Iraq and Syria”.
Inside Story – The fight for Ramadi, a turning point against ISIL?

For Iraq, the rhetoric of this strategy is being translated into Saudi attempts to create a new multipolar regional order which could throw the delicate international coalition against ISIL off balance.

Saudi Arabia’s endeavours to create a new Sunni-dominated “Islamic military alliance” devoted to fighting global terrorism, and plans to set up a “strategic cooperation council” with Turkey, are seen by Baghdad as primarily motivated by a regional rivalry with Iran.

On the other hand, the acrimony between Iran and Saudi Arabia could bring more chaos to Iraq. As Monday’s bombings of the Sunni mosques have demonstrated the conflict increases fears of renewed Shia-Sunni violence.

The Iran-backed Shia militias, which have been increasingly operating as the country’s main military and political force, seem to be bracing themselves for a showdown if the Iranian-Saudi conflict worsens and spreads into Iraq.

Worse still, increased friction between the two regional rivals could shake up Iraq’s fragile political landscape.

The rupture between Iran and Saudi Arabia comes at a delicate moment in the fledgling effort to launch a badly needed and US-backed political process that will empower Iraqi Sunnis in the aftermath of ISIL’s pushback.

The tensions would only bolster hard-liners on both sides, feeding the deepening Shia-Sunni divide and hindering, or even blocking, a badly needed reconciliation in the fight against ISIL and efforts to bring stability back to Iraq.

Even if the political outrage over the execution of the Saudi Shia leader begins to fade somehow, tensions between Iran and Saudi Arabia are expected to continue simmering and Baghdad will remain caught in what could turn to be an apocalyptic Middle East sectarian storm.

Iraq-Economy-Budget

Iraq’s sickly economy

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Iraq’s sickly economy

Iraq’s faltering economy is likely to take a further turn for the worse as oil prices plummet, writes Salah Nasrawi

When millions of Iraqi pensioners went to banks and cash points to receive their monthly pensions in December they were stunned to find that their regular payments had been drastically slashed.

Some had had their pensions cut by 10 per cent or more. While those who had been given huge pensions by the post-Saddam Hussein regime in Iraq were only slightly affected, the biggest losers were public-sector workers who had retired before Saddam’s ouster. Altogether more than 2.7 million retirees were affected.

The surprise raid on the retirement funds is the latest in a package of austerity measures introduced by the government of Prime Minister Haider Al-Abadi this year as the state budget is hit by lower oil prices and the increasing cost of the war against the Islamic State terror group (IS).

The government had earlier promised that pensions would not be axed after it had withheld the salaries of government officials as part of a package of austerity measures meant to close an enormous budget deficit.

Iraq has entered its worst economic crisis since 2003 after oil prices dropped sharply. The decline in revenues has raised fears of unrest as a wave of protests against government shortfalls are expected to add a new source of instability to the IS insurgency and the country’s fractious sectarian politics.

On 16 December the Iraqi parliament endorsed a tight 2016 government budget of 113.5 trillion Iraqi dinars ($99.65 billion) with a deficit of 29.4 trillion Iraqi dinars ($25.81 billion).

The government’s programme to reduce the budgetary deficit includes, among other financial restructuring measures, plans to cut spending and the resort to loans.

Under the legislation, the government will eliminate jobs, merge some ministries, halt spending on construction and other investment projects, and make cuts in civil servants’ salaries.

The budget also anticipates $13 billion in other income, some to be raised from new taxation on mobile phone SIM cards, cigarettes, alcohol, cars and Internet services.

But fiscal restructuring is what the government hopes will do most to reduce the worsening deficit.

Last week the Iraqi Central Bank (ICB) increased the sale price of US dollars to banks and currency exchange bureaus by 16 dinars, or 1.37 per cent. The government hopes the adjustment will ease pressure on the dinar, the local currency.

Yet, in order to meet the continued shortfalls in the 2016 budget, the government also decided to resort to substantial international borrowing and bond sales.

Iraq has already secured $1.7 billion in loans from the World Bank and a $833 million loan from the International Monetary Fund. It failed to issue international bonds after the rating agency Standard & Poor’s assigned Iraq a B-minus credit rating, six notches below investment grade, saying its security and institutional risks were among the highest in the world.

In addition to the loans, Iraq plans to borrow billions of dollars from the Saudi-based Islamic Development Bank, the Qatar National Bank and the Japanese International Cooperation Agency (JICA) in an attempt to raise an ambitious $6 billion on the international bond market.

A $4 billion loan from domestic commercial banks has also been planned, in addition to the sale of some $4 billion of state bonds on the local market.

But what is most worrying is the government’s intention to finance the budget deficit through indirect loans from the Iraqi Central Bank. The budget law envisages seven trillion dinars worth of ICB-guaranteed bonds that will be offered to the public.

Such a move would require the ICB to use its foreign reserves, crucial in backing the Iraqi dinar and avoiding risks of destabilisation.

Iraq’s escalating financial woes are largely a result of the abysmal performance of the post-Saddam governments. Instead of working to rebuild the economy and sustain growth in basic sectors, they have relied heavily on oil revenues to bankroll the budget.

Though Iraq is the second-largest producer of crude oil in the Organisation of Oil Producing and Exporting Countries (OPEC), the country’s economy is in a shambles due largely to inefficiency and mismanagement.

Some 70 per cent of the budget has been going to pay for food imports, energy subsidies, and funding an inflated bureaucracy and ramshackle armed forces. Government policies are mainly responsible for the decline in the two main productive sectors of the economy, agriculture and industry.

Despite receiving hundreds of billions of dollars in oil revenues and international aid since 2003, Iraq still suffers from poor public services. Households in most parts of the country receive only a few hours of electricity a day. Public health services are in tatters and environmental conditions are abysmal.

Rampant corruption, poor financial management and bad public spending are key factors in Iraq’s economic ills. Billions of dollars have been lost in graft, waste and inefficiency over the last ten years.

Though Al-Abadi has pledged to curb corruption, there has been no sign that his government has taken tangible steps to bring corrupt officials to account or recover stolen money.

With expectations that oil prices will remain low in 2016, the country’s budget deficit will continue to inch downward through next year.

Budget projections envision oil exports of 3.6 million barrels per day (bpd), including a total of 550,000 bpd from Iraqi Kurdistan and the Kirkuk Province at a price forecast of $45 a barrel. But even with oil production raised as planned, the government’s budget will continue to stay in the red.

The scale of the damage to Iraq’s economy by government financial policies could be enormous in both the short and the long terms and the micro and macro levels.

The austerity measures are likely to make a terrible situation worse. The cuts, which have already targeted salaries and pensions, could result in further reductions in employees’ and retirees’ benefits, adding frustration to the mix and causing tempers to veer out of control.

The surge in the dollar’s exchange rate with the dinar will raise prices and thus impact the cost of living, especially for low-income groups.

The Iraqi Society of Pensioners, a pressure group, has threatened that it will call for public protests if the government implements another 3 per cent slash in salaries, as has been widely rumoured. Government employees have made similar threats.

The slash in government spending is likely to impact education, health, and municipal and other social services.

The suspension of construction and other investment projects and the government’s decision to curtail or reduce new jobs in the civil service will most likely cause rising unemployment. It will also make more skilled Iraqis leave the country.

Excessive borrowing, as the government is planning in the 2016 budget, will have long-term consequences. While increasing the public debt, the new borrowing is not intended to generate growth but to cover the spendthrift policies of the government and its budget deficit.

A lot has happened since the 2015 austerity budget was adopted: the economy has stagnated, public spending has come to a halt and public services have worsened, putting more pressure on a population already plagued by violence and endemic corruption.

Street protests over shortages of electricity and other services, which started in August, have turned into calls for an end to the country’s political system which is based on power-sharing between the country’s ethnic and sectarian communities.

With another belt-tightening budget, the Iraqi people’s lives will be made increasingly insecure, raising the spectre of more turbulence as the country wages a costly war against IS which still controls large parts of the country.