Tag Archives: corruption

Why Iraq’s protests matter

Why Iraq’s protests matter

The protests in Iraq may not produce change immediately, but they will affect the country’s ailing system of government in the long run, writes Salah Nasrawi

Iraqis are taking to the streets. Thousands gathered in Baghdad’s Tahrir Square on 7 August to protest against corruption and the centralisation of power. Similar protests took place in other cities, including Basra and the two Shia holy cities of Najaf and Karbala.

Hundreds of Iraqis also gathered in front of several Iraqi embassies abroad in support of the protests.

Friday’s demonstrations, organised by young activists and joined by the disenchanted, were the second in a week in Baghdad and across Iraq, with participants initially calling on the government to address the country’s chronic energy shortages and lack of basic public services.

Temperatures above 50 degrees and power cuts that leave Iraqis with only a few hours of electricity per day coupled with severe shortages in running water and an unhealthy environment have exacerbated the effects of the current heat wave in the country.

The protesters blame the lack of essential services on poor government and rampant corruption. They say the crisis has stalled Iraq’s once-promising economy and contributed to the country’s instability. Many protesters blame corruption for wrecking living conditions and the country’s economic and political turmoil together with the rise of the Islamic State (IS) terror group.

Twelve years after the ouster of former Iraqi president Saddam Hussein’s regime in the US-led invasion, Iraq’s ruling class has failed to rebuild the war-torn country despite receiving nearly one trillion dollars in oil revenues, leaving behind a deeply divided country steeped in ruin.

Leaving Iraq’s fragile political system unfettered, corruption has become deeply entrenched in Iraq’s state bureaucracy, and few Iraqis believe their political leaders are capable or willing to tackle the endemic graft problem.

In its 2014 corruption index, the international NGO Transparency International said Iraq was the fifth-most corrupt country in the world out of the 175 countries surveyed. Over more than a decade Iraq has remained among the top ten worse countries for corruption.

Most of Iraq’s political elite is believed to be involved in one type of corruption or another, plundering the country’s wealth in order to create rents that can be used to secure control of the government and build political and sectarian fiefdoms.

Corruption and the misuse of public office in Iraq is widespread and systematic. It includes bribery, extortion, embezzlement, fraud, legal plunder, money-trafficking and laundering, patronage, cronyism, nepotism and plutocracy.

Iraqis began unprecedented mass protests against corruption and government mismanagement in January 2011, influenced by the Arab Spring uprisings which broke out in several Arab countries to bring down their autocratic regimes.

Though former prime minister Nuri Al-Maliki ruthlessly cracked down on the opposition, anti-corruption and pro-reform demonstrators continued to hold small protests every now and then but with no efforts made by the government to accede to the protesters’ demands.

The new wave of demonstrations against the electricity shortages started last month in the southern port city of Basra and was triggered by the killing of a demonstrator protesting against electricity cuts. Angry protesters then called on the local governor and council members to step down.

Late last week, train drivers for the Iraqi Railways Company protested in an unprecedented way at the delay in their monthly salaries when they blocked the main roads in Baghdad with trains. The staff of several state-owned industrial companies held similar demonstrations and cut roads in Baghdad for the same reason.

On 7 August, the security forces were out in strength to discourage protesters from reaching Tahrir Square in the heart of Baghdad, which had been chosen by organisers as the venue for their rally. Intimidation and harassment by the security forces and supporters of the ruling parties were reported to have forced thousands of people to join the demonstrations.

Public frustration has been building after the government announced austerity measures this year because of the severe budget deficit following a sharp fall in oil prices. However, it maintained the huge salaries and allowances received by senior officials.

Although the protesters have focused most of their anger on deteriorating living conditions and an almost total abandonment by the state of its responsibilities to society, the demonstrations have also highlighted Iraq’s deeper governance problems.

This wave of protests has revealed new forms of political mobilisation in response to ever-increasing grievances against the monopoly of power, political hegemony, cronyism and mismanagement.

Significantly, the protests have been held mostly in Shia-populated cities and towns, marking increasing dissatisfaction by the Iraqi Shia with the political class, mostly Islamic-oriented groups.

In a rare show of disdain for the Shia political oligarchy, protesters slammed what they called its “manipulation” of religion to maintain a grip on power and plunder the state’s resources.

Such sharp public salvos must have rung alarm bells with Shia religious and political leaders who are keen to defend the hard-won Shia rule in Iraq after the US-led invasion, especially at a time when they are being challenged by IS militants who control large swaths of land in Iraq.

The remarks must also have sounded a warning signal to elements of the Shia political groups who support the rule of clerics in state affairs based on Iranian ayatollah Khamenei’s concept of velayat faqih, or the rule of the jurist.

Sensing the danger to the Shia gains he has carefully nurtured, Iraq’s top Shia cleric Grand Ayatollah Ali Al-Sistani was quick to intervene and directed Prime Minister Haider Al-Abadi to take tougher measures against corruption and name politicians standing in the way of reform.

But criticisms of rising theocracy by the protesters have evoked strong reactions from Shia clerics and religious groups, who have attacked the organisers for being secular.

Sadr Al-Din Qubanchi, a Friday prayer imam in Najaf and a senior member of the Iraqi Supreme Council led by Amar Al-Hakim, called on Iraqis to boycott the demonstrations. Qais Al-Khazali, leader of the radical Assab Ahl Al-Haq, or “League of the Righteous,” militia, warned that the protesters “will be crossing a red line” if they criticise “religious elements.”

The protests have invested new energy in long-stagnating Iraqi politics, however. In an attempt to appease the protesters, Al-Abadi approved a wide-ranging reform plan that would abolish the three vice-presidential posts in the government as well as the office of deputy prime minister in order to slash spending and improve the government’s performance in the face of the mass protests.

Al-Abadi’s seven-point plan which promises anti-corruption reforms, a number of government posts be filled with political independents and drastic cuts in government jobs and some ministries has received parliamentary approval.

Doubts have also arisen about whether Al-Abadi’s package of reforms will be able to assuage the protesters, as many of them have voiced concerns that their demands for real change have gone unanswered.

To many analysts, the crisis would exacerbate if young activists will be able to forge across-nation alliance that will organize a bigger protest movement in case the reform programme falls short of their expectations.

Meanwhile, the protests and the power struggles they have led to have fully exposed the dysfunctional political system in Iraq forged following the US-led invasion and based on a quota system that distributes power among Iraq’s main ethnic and sectarian groups.

The system, in theory forged to build a consensual democracy through power-sharing, has turned into the rule of an oligarchy where power resides with a political class controlled by a few religious families or groups.

The question now is whether the new crisis will change all that and allow a new and more viable and functional political system to emerge. This will largely depend on how the protest movement evolves and on whether it can provide a creative leadership and shape a strategic programme with realistic goals.

So far, the biggest weakness in the protest movement has been its fragmentation and lack of leadership. This makes it prone to manipulation by politicians who try to use the protests as a revolving door to go back to dirty politics.

There have already been signs that politicians and media figures with agendas are trying to use the protests to serve their own agendas. Leaders of groups that have been excluded from the government and militia chieftains aspiring for power are also taking advantage of the protests by adopting their slogans.

On the other hand, much will also depend on Al-Abadi and on whether he can deliver on pledges he has made in his reform programme. One of his biggest challenges will be how to deal with the country’s entrenched oligarchy, including vice-president and former prime minister Al-Maliki.

Al-Maliki who is Al-Abadi’s boss in the Dawa Party, is at the top of the protesters’ list of those they want to see stand trial on corruption and mismanagement charges, including by losing some one-third of Iraqi territory to IS jihadists.

While it is too early to judge the pros and cons of Iraq’s nascent protest movement, one of the most complex experiences in the country’s modern history, the effort is certainly being made, and it is worth supporting if it sets in motion a process that will help Iraq change and hopefully for the better.

This article appeared first in Al Ahram Weekly on Aug, 13, 2015

Iraq tightens its belt

Iraq tightens its belt

The people of Iraq will face severe hardships under the country’s new austerity budget, writes Salah Nasrawi

With oil prices plummeting and the economy squeezed by inefficiency and corruption, Iraq’s parliament has approved a belt-tightening budget. The step is widely seen as having significant ramifications for the country’s volatile domestic politics and the war against the Islamic State (IS) terror group.

Iraq’s 328-member House of Representatives endorsed the country’s 2015 budget last week. The budget approval followed weeks of squabbles over cuts, allocations and what oil price the government should base the budget’s projected revenues on.

The lawmakers approved a cut of nearly three per cent in spending, bringing the total expenditure in the budget to $99.6 billion, down from the $102.5 billion the cabinet had initially proposed in the draft.

Before sending the bill to parliament for ratification, ministers warned that this would be an austerity budget, slashing the country’s bloated public sector and freeing up funds for military spending as Iraqi forces battle IS.

Iraq’s government had originally forecast a $125 billion budget for 2105, but faced with still-falling prices for its oil exports it was forced to slash this by some 20 per cent.

The new budget is based on a price of $56 for a barrel of crude, lowered from $70 and then $60 a barrel in earlier drafts. The expected budget deficit will still be around $19.1 to $21.1 billion, however.

One of the main hurdles that delayed the budget’s endorsement were objections from some Shia members to an oil-export deal struck in December between Baghdad and the Kurdistan Regional Government.The Shia MPs said the deal would unfairly benefit the Kurdistan Region at the expense of the Shia-populated oil-producing provinces in the south.

Sunni lawmakers also threatened to boycott the vote because the budget did not include funding provisions for a national guard, a new security force to be set up to fight IS and police Sunni-populated provinces.

Many lawmakers also objected to the oil price assumption in the budget, saying it was unrealistic as market prices had slipped below $50 a barrel with no concrete indications that they would rebound in the foreseeable future.

The reduction in oil prices is expected to strangle Iraq’s economy at a time when the country needs a boost in resources to cement its fractured national unity and sustain the war against terrorism.

While the government said it would not cut salaries or pensions, other reductions in the lavish spending of oil money, such as generous allowances, travel and office expenses, were announced.

But the bulk of the funds to cover the deficit will come from taxation, borrowing and withdrawals from the country’s reserves, estimated at $75 billion. While the Central Bank is expected to provide funds from its reserves, the government said it would also issue bonds in foreign currencies.

Under the provisions of the budget the government will be able to meet part of the deficit by introducing new taxes, levies and duties. Obligatory saving accounts are also to be opened for senior government officials to deposit part of their salaries.

Since the fall of the regime of former Iraqi president Saddam Hussein in the US-led invasion in 2003 Iraq’s parliament has had difficulty passing annual budgets in regular order. Wrangling over budgetary allotments are routine, and last-minute deals usually come at the expense of a solid fiscal plan.

Worse still, Iraqi governments throughout this period have failed to present their final revenue and expenditure accounts for review and endorsement before passing the next annual budget.

Last year, parliament was unable to approve the state budget because of a dispute between the central government and the autonomous Kurdistan Region over independent oil exports from the region.

The crisis allowed former prime ministerNuri Al-Maliki to use budget advances and emergency provisions, circumventing the checks and balances enshrined in the constitution to ensure limits imposed by parliament are respected.

As a result, billions of dollars in unchecked spending are now unaccounted for. Lawmakers have said that Iraq’s state coffers were nearly empty when the government of Prime Minister HaidarAl-Abadi took office in August. Iraq’s economy has been hard hit by decades of war, international sanctions and inefficiency.

But the country’s current economic ills are largely due to the abysmal economic policies of post-Saddam governments. Instead of working to rebuild the economy and sustain growth in basic sectors, they relied heavily on oil revenues to bankroll the budget.

Though Iraq is the second-largest producer of crude oil in OPEC, the oilproducers’ organisation, the country’s economy is in a shambles due largely to mismanagement, poor public spending and rampant corruption.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 productive sectors.Agriculture has been neglected, and less than 15 per cent of the country’s total area is now being cultivated. The agricultural sector, which used to employ one third of the work force, now accounts for less than four per cent of the country’s GDP.

The manufacturing, construction and electricity industries are in tatters and account for only eight per cent of national wealth. Thousands of state-owned industries andsubsidised factories have shut down because of a lack of electricity and poor maintenance.

Iraq’s banking system is largely dysfunctional, and without an overhaul, analysts say, the economy has little hope of competing with its oil-rich neighbours. Iraq has failed to invest in sovereign wealth funds, unlike oil-exporting countries in the Gulf, whose investments are now being used to cover budget deficits and public spending.

Corruption comes at the top of the reasons behind the depletion of Iraq’s coffers. According to some lawmakers, some $750 billion has been lost in corruption, waste and inefficiencies over the last ten years.Though Al-Abadi promised to combat corruption in his policy statement to parliament when he took office, there have been no signs that his government has taken concrete steps to bring corrupt officials to account or recover stolen money.

One day before the parliament passed the 2015 budget, a report by the World Bank warned that Iraq faces “a crisis which will have important implications for the welfare of its people.”The report said that about 20 per cent of Iraq’s population lived below the poverty line in 2012 and a significant portion of the Iraqi people was vulnerable to falling into poverty.

It said “poverty declined only modestly” since 2012 and “deep deprivations in non-monetary dimensions persisted.”The report painted a grim picture of Iraq before the current crisis. It said close to half the population had less than primary level education and almost a third of children aged up to five years old were stunted.

The report said over 90 per cent of households in Baghdad and the central and southern provinces received less than eight hours of electricity a day, a third of men and 90 per cent of women aged 15 to 64 were neither employed nor looking for work, and more than 60 per cent of the calories consumed by the poor came from a nationwide food subsidy programme.

“Addressing this crisis will take time and concerted effort,” the report said.

Looking forward, there are real concerns that the new belt-tightening budget will have serious impacts on the lives of most Iraqis. Moreover, there are concerns that the combination of falling oil prices and the austerity measures will have adverse implications for the country’s stability and hurt efforts to fight IS extremists.

This article appeared first in Al Ahram Weekly on Feb.5, 2015

Iraq’s fishy business

Iraq’s fishy business

A mysterious Russian plane landing in Baghdad airport prompts questions of illicit oil-for-weapons deals with IS, writes Salah Nasrawi

The news came first from a Jordan-based television channel owned by an Iraqi Kurdish tycoon and well known for his dubious business. A Russian cargo plane landed at Baghdad airport on 2 November with some tons of weapons on board after it was denied permission to land in Suleimaniya International Airport in the autonomous Kurdistan Region, Al-Tagheir TV reported.

The delivery of weapons and ammunition to a country in a state of war shouldn’t have made headlines except that the story surrounding the plane started growing more mysterious after the Baghdad government distanced itself from the shipment.

The stunning reports must have also raised concern with the US administration which is leading an international coalition to support Iraq in the war against the barbaric Islamic State (IS) terror group which has seized one third of Iraq’s territories.

Details about the plane and its cargo gradually began emerging highlighting suspicions that the weapons on board may have been on their way to IS.

According to accounts given by Kurdistan’s media, the Russian plane was approaching Suleimaniya when it was denied permission to land in the city’s international airport which is under the control of the Patriotic Union of Kurdistan, one of the two main parties in the region.

Kurdish media outlet Awene quoted Head Manager of Suleimaniya International Airport Tahir Abdullah as saying the airport refused to grant permission for landing because it had no prior knowledge of the plane’s arrival. Awene quoted a PUK official as saying the plane was carrying 44 tons of weapons, including anti-tank rockets, guns and night vision equipment.

Basnews, another Kurdish outlet quoted Atta Sarawi, a local Kurdish official, as saying the plane was expected to land in Suleimaniya airport. “There was coordination in this regard but there were communication problems with Baghdad. So, the plane continued its flight to Baghdad,” Sarawi said. A translated version of Basnews story appeared on the Arabic news outlet Elaf on 12 November quoted Sarawi as saying the weapons on the plane were sent to the “Kurdistan Region.”

On 15 November Basnews came with another story on its website saying the weapons “might have been sent to a senior Kurdistan Democratic Party official.” It quoted “unofficial” sources as saying that the pilot of the Russian “military plane” which started its journey from the Czech Republic told Turkish air traffic controllers in Adana, southeast Turkey, that the plane’s cargo was mainly a cigarettes shipment bound to Iraq.

In Baghdad, Iraqi government officials kept their mouths shut about the plane and its dangerous goods until the news finally came out setting off a flurry of speculative reports. The Ministry of Transport, which is responsible for civil aviation, said permission for landing at the capital airport was granted after the pilot informed the tower that the plane was running out of fuel.

“The decision to grant the plane permission to land came in line with Chicago Agreement on International Civil Aviation in order to avoid a risk of falling,” said the ministry in a statement on 15 November.  It said the pilot was instructed to land on a runway in the airport used by the army. The plane then parked in an area under the Ministry of Defense’s control and weapons were seized, the ministry said.

Both the centeral government and the Kurdistan Region’s authority said they are conducting an investigation into the case. Neither Moscow nor Prague, however, reacted to the news. Also, the US military which is participating in defending the Baghdad airport and participate in air control of the Iraqi airspace made no mention of the incident.

Yet, in another version of the story widely circulated on social networks and TV programmes, the weapons in the plane were sent to a prominent Suleimaniya-based Kurdish businessman who is closely connected to the PUK, which is headed by Iraq’s former President Jalal Talabani.

According to these reports the businessman, who is known to be a hugely rich man who has made his fortune in illicit deals and contracts, is also accused of conducting trade with the IS terror group. A well-known Iraqi analyst told the Baghdadiya television this week that the Kurdish businessman was also responsible for supplying IS with at least one shipment of pick-up vehicles now used by the militants in fight against Iraqi soldiers and the Kurdish forces, known as the Peshmergas.

Another Iraqi television network, Al-Sharqiya reported on its website that “several officials in a big a Kurdish-owned mobile company, their sons and a middleman who are close to one of the main (Kurdish) parties are suspects” in the plane case.

Conspiracy theories abound that the same entrepreneur runs investment portfolios of Kurdish parties and have business relations with top officials in Kurdistan and the Baghdad cenetral government.

The shadowy role of businessmen in Iraq has grown since the US invasion in 2003. Many of these businessmen were involved in scams in the US reconstruction projects following the invasion and before that in the UN-led oil-for-food scheme during Saddam Hussein’s era. Billions of dollars are believed to have been skimmed in the two programmes and went mostly into the pockets of these businessmen and corrupt politicians.

Since it is hard to confirm these reports, eyes are now turned toward the Iraqi authorities and the KRG to unveil the secrecy surrounding the plane, who was ordering the shipment and which is its final destination. The allegations are so serious that prompted Kurdish Prime Minister Nechervan Barzani to tell reporters that “it is considered high treason.”

The disclosure comes at a time when Baghdad’s authorities and the Kurdish government are gridlocked over oil, budget and weapons delivery to the Peshmergas. The Obama administration has been putting pressure on both sides to resolve their disputes and work together to fight the Islamic State terror group.

The Baghdad government suspended allotments of Kurdistan in the state budget, including the Peshmergas salaries after its government started exporting oil produced in their region independently. Under an interim deal the central government agreed last week to will pay $500 million to the KRG, from the state budget while the Kurds will let the Iraqi government receive 150,000 bpd of the oil produced by the Kurds.

On Saturday, Hawal, a Kurdish news outlet, said the Peshmergas are refusing to take part in the fight against IS unless their full salaries are resumed. It quoted Dleir Mustafa, Deputy Head of the Peshmerags Committee at the KGR parliament, as saying that another precondition for the Peshmergas to fight IS is to allow weapons delivery direct and not through the Baghdad government.

Since IS captured Mosul and several other key Sunni-populated cities in June, reports emerged of Kurdish oil traders smuggling oil from IS controlled areas in Iraq and Syria into neighbouring as far as Afghanistan. According to Western intelligence reports the smuggled oil is sometimes sold for a price as low as US $20 per barrel.

The US Treasury Department estimates that IS takes in millions of dollars a month from oil sales. Other estimates range between US$274,000 to three US$ million a day. Trafficking might have been cut down by US-led coalition air strikes on oil production and refinery targets in IS territory.

Last week KRG Interior Minister Karim Sinjari disclosed that Kurdish security forces have captured 11 individuals charged with smuggling oil with IS and for investigation. Turkish officials have denied or downplayed reports about smuggling IS’s oil through Turkey.

Hawal, the Kurdish news service, reported last week that large amounts of money are being transferred through the Kurdish controlled areas to towns taken by IS. It quoted Nouzad Barzanchi, head of the Security Department in Kirkuk as saying transactions are being made to people in Mosul and Shirqat which are under IS control. Baghdad media have reported that several bureaus in the capital are being investigated for transactions made to Jordan, the United Arab Emirates and France which the Iraqi intelligence believes went to beneficiaries connected with IS.

Some of the money which is being transferred through licensed exchange bureaus are believed to be payments for other smuggled goods such as wheat, barley and cattle confiscated from farmers and raisers.

Corruption in Iraq has been endemic since the US invasion nearly twelve years ago. Iraqi state officials have been acting as enablers for corrupt deals in a number of ways involving a range of businesses. In many cases there have been reports of corrupt professionals and army officers who are selling arms or intelligence to IS and other terrorist groups which are later used in attacks against government offices or security forces.

Like many previous cases of corruption before we may not know the secret behind the Russian plane. Yet, the revelations of the oil-for-weapons deal have unveiled a trio of deeply corrupt politicians, terrorists and dubious businessmen who are not only losing the country’s significant proportions of its wealth, but they band together to destroy it.