Iraq Ranked Towards The Bottom of Per Capita Income Amongst Arab Countries

A new report by the Arab League ranked Iraq twelfth in per capita income amongst Arab nations, placing it towards the bottom of the list. Qatar, the United Arab Emirates (UAE), Kuwait, Bahrain, and Oman were at the top of the list, while Egypt, Syria, Sudan, Mauritania, and Yemen made up the bottom five. Qatar had a per capita income of $70,651 with a population of 1.448 million, followed by $52,574 for the UAE with a population of 4.76 million, $40,046 for Kuwait with a population of 3.43 million, $21,675 for Bahrain with a population of 1.123 million, and Oman with $20,908 with a population of 2.86 million.

In the 1970s Iraq had a rising standard of living due to the increase in oil prices following the OPEC boycott and generous social spending by the government. Saddam’s decision to go to war with Iran, followed by the invasion of Kuwait, and international sanctions destroyed most of those achievements. A U.N. study found that living standards dropped 66% from 1988 to 1995 as a result. The economic conditions in Iraq were only made worse by the U.S. invasion. Its only been very recently that parts of Iraq’s economy and services have begun to recover. That’s been seen in a growth of per capita GDP to levels close to those in the 1980s. Compared to its neighbors however, Iraq’s GDP, GDP per capita, purchasing power, and as the Arab League report points out, per capita income, are still some of the lowest in the region. These numbers can also be misleading for oil dependent countries such as Iraq and others in the Gulf because a nation can be bringing in billions from petroleum, but that doesn’t mean that it is trickling down to the population.

Arab League Ranking of Per Capita Income In Arab World
1. Qatar
2. United Arab Emirates
3. Kuwait
4. Bahrain
5. Oman
6. Saudi Arabia
7. Libya
8. Lebanon
9. Algeria
10. Tunisia
11. Jordan
12. IRAQ
13. Morocco
14. Egypt
15. Syria
16. Sudan
17. Mauritania
18. Yemen

Iraq’s Per Capita GDP
1980 $3,812
1994 $180
2002 $770
2008 approx. $3,100

Comparison Of Iraq’s GDP With Region
Saudi Arabia $458.1 billion
Iran $319 billion
United Arab Emirates $240.3 billion
Egypt $159.2 billion
Algeria $152.3 billion
Kuwait $148.4 billion
Qatar $95.8 billion
Morocco $87 billion
IRAQ $84.7 billion
Libya $67.9 billion
Syria $50 billion
Oman $46.4 billion
Tunisia $38.9 billion
Lebanon $28.02 billion
Yemen $22.3 billion
Jordan $20.1 billion
Bahrain $18.6 billion

Purchasing Power Parity In Region
Qatar $58,004
Kuwait $40,826
United Arab Emirates $29,063
Saudi Arabia $23,928
Bahrain $23,702
Oman $23,652
Libya $16,431
Iran $11,748
Lebanon $10,742
Algeria $8,344
Tunisia $7,894
Egypt $5,689
Jordan $5,051
Syria $4,763
Morocco $4,405
IRAQ $3,880
Yemen $2,290

SOURCES

Al Mada, “Iraq is ranked twelfth in the list of the richest Arab,” 1/2/10

No Rush To Hold Provincial Elections In Kurdistan

In January 2009 fourteen of Iraq’s eighteen provinces held provincial elections. Voting in Tamim province was indefinitely postponed because of the dispute over Kirkuk, while the Kurdistan Regional Government (KRG) said Baghdad’s election law did not bind them. They said they would hold their own vote based upon their own legislation. In July 2009 a local election law was passed, and the region held balloting for their parliament, but there have been no provincial elections.

At the very beginning of January 2010 AK News reported that the Kurdish parliament would finally discuss parliamentary voting after the March 2010 national elections. This poses legal questions since the Kurdish councils’ terms expired in January 2009. In February the Kurdish parliament extended their powers until the end of 2009, but that now has passed as well. A consultant for the Kurdish speaker said that the passage of the provincial election law de facto extends the provincial councils’ terms until the actual balloting is held.

The main reason why the KRG’s parliament is in no rush to set an election date is probably because they are afraid of losing power to the new Kurdish opposition group, the Change List. In the July 2009 Kurdish parliamentary vote, the Change List took 23.75% of the vote, and did especially well in Sulaymaniya. Another opposition coalition, the Service and Reform List got 12.8% of the vote. Like everything else in Kurdistan, the two ruling parties, the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) control the governors and provincial councils. In Dohuk, the governor is from the KDP as well as 33 of the 41 seats. In Irbil, the governor is also from the KDP and they control 23 of 41 seats, and the PUK 16. Finally, in Sulaymaniya the governor and 28 of the 41 seats belong to the PUK. The KDP and PUK have been loath to share power, and prefer to co-opt and intimidate other parties. By holding off provincial elections indefinitely, they can hold onto their positions and influence.

SOURCES

AK News, “Only new elections can expire Provincial councils’ legal term: source,” 1/1//10

Knights, Michael and McCarthy, Eamon, “Provincial Politics in Iraq: Fragmentation or New Awakening?” Washington Institute for Near East Policy, April 2008

Visser, Reidar, “After Compromise on Kirkuk, Finally an Elections Law for Iraq’s Governorates,” Historiae.org, 9/24/08

Iraqi Anti-Corruption Report For 2008

The Integrity Commission is one of Iraq’s three main anti-corruption bodies. In December 2009 they released their report for 2008. It showed that while the number of cases it has dealt with has gone up each year, very few actually lead to convictions.

The Integrity Commission was created by the United States in 2004. Since then it has presented 12,976 cases to court. Of those, only 937 went to trial, resulting in a paltry 396 convictions in four years. In 2008 the Commission got 5,031 reports of corruption, presented 3,027 of those to an investigative judge, issued 630 arrest warrants, and detained 417. Of those, only 97 were convicted.

Besides a lack of evidence, interference by ministers and the 2008 Amnesty Law are two other factors leading to the paucity of convictions. The Amnesty Law was meant to foster reconciliation, but also had an exemption for corruption. As a result, 1,552 cases have been dropped, mostly from the Interior Ministry. Article 136B of the Constitution also allows top officials at each ministry to stop investigations. In 2008 this happened 70 times. That was actually a decrease from 2007 when the ministries involved the article132 times. Since 2005 Article 136B has been used 211 times.

The Interior, Municipalities and Public Works, Health, and Justice ministries got the most complaints and cases of corruption in 2008. There were 788 reports against the Interior Ministry, 659 against the Municipalities Ministry, and 269 against the Health Ministry. The Interior Ministry also had the most criminal cases against it with 736, followed by 400 against the Municipalities Ministry, and 249 against the Justice Ministry. Most of these dealt with public servants exceeding their duties in some capacity, forgery, and bribes. From 2004-2008 Interior has also had the most convictions with 103. The Finance Ministry was second with 58, and the Defense Ministry was third with 54.

All of Iraq’s top officials are also supposed to provide financial disclosures to the Commission each year, but this has hardly ever happened. From 2005-2008 Iraq’s prime minister, deputy prime minister, president, two vice presidents, speaker of parliament, and deputy speaker combined have only provided their financial reports once, and that was the deputy speaker of parliament in 2006. Only 29 of Iraq’s 49 ministers or heads of government offices have consistently turned in their financial disclosures since 2004, and no members of parliament did so last year. In 2009 the Commission reported that only 37% of Iraq’s 275 parliamentarians turned over their records.

The Commission remains hard at work despite the many difficulties they face. In mid-December 2009 the former deputy minister of transportation was found guilty, and sentenced to eight years in prison for taking a bribe. A few days later three senior officials from the Trade Ministry were also given jail terms for embezzling millions of dollars from the food ration system. The problem is that these are only a handful of the thousands of examples of corruption that the government faces. Most of those found guilty are also low levels officials, rather than these types of high profile cases. Those at the top are simply not interested in this fight, so the Commission faces an uphill battle. The result is that Iraq remains one of the most corrupt countries in the world.

SOURCES

Commission of Integrity, “Annual report for 2008,” December 2009

Inside Iraq, “Financial Disclosure,” McClatchy Newspapers, 12/4/09

Reuters, “Iraq chases many for corruption, catches few,” 12/23/09
- “Iraqi trade officials jailed for corruption,” 12/24/09

Integration Of Sons Of Iraq Delayed Until Mid-2010

At the end of December 2009, the deputy U.S. commander in Iraq said that the integration of the Sons of Iraq (SOI) by the government would be delayed until after the March 2010 parliamentary elections. When the details of the handover were originally worked out in 2008, Baghdad agreed to give 20%, roughly 19,000 SOI jobs in the security forces, and the rest would get other government work by the end of 2009. Budget problems and mistrust by the Shiite ruling parties meant this was an impossibility. Many members of the SOI are also illiterate and lack jobs skills, and many of the jobs being offered are menial ones like picking up garbage. By October only around 9,500 SOI had gotten security jobs, 6,800 had gotten work in the government, and 8,800 had found employment elsewhere. That left roughly 70,000 SOI with uncertain futures.

The deputy U.S. commander said that in 2010 the government will begin closing down SOI checkpoints, and turning them over to Iraqi police and Army units. They will still be doing their regular jobs until the March 2010 elections however, to help provide security. Baghdad has also said that it will continue to pay the SOI for the rest of the year.

If the major Shiite parties such as the Dawa, Supreme Islamic Iraqi Council or the Sadrists are the main part of any new government however, there is little likelihood that all the remaining SOI will find work in the public sector. The Shiite parties have long believed that the Sons of Iraq are unrepentant insurgents, who have been infiltrated by Al Qaeda in Iraq, and therefore are not to be trusted.  Iraq is also facing budget problems, which would make the integration of the SOI difficult even if there were a will to do so. The result has been only about 16,300 of over 100,000 SOI getting jobs within the government. A similar number will probably get employment in 2010, leaving the majority still relying upon checks from Baghdad. It will then be up to the U.S. to either keep pressure on the authorities for more to be integrated or to simply let the issue drop, leaving the SOI to their own devices.

SOURCES

Ahmed, Caesar, “Prominent member of Awakening movement arrested in Iraq,” Los Angeles Times, 11/10/09

Carter, Chelsea, “AP Interview: Sunni fighters must be treated fairly by Iraq, US commander says pm,” Associated Press, 12/26/09

Gisick, Michael, "'Sons of Iraq' face weakened power," Stars and Stripes, 1/3/10

Special Inspector General for Iraq Reconstruction, “Quarterly Report to the United States Congress,” 10/30/09

Iraq Could Become Game Changer In OPEC

In mid-December 2009 the Organization of Petroleum Exporting Countries (OPEC) held its annual meeting in Angola. Besides agreeing to keep oil prices at their current level of between $70-$80 a barrel, Iraq was the other hot topic of debate.

After Iraq completed its second bidding round on its oil fields earlier in the month, Iraq Oil Minister Hussein Shahristani has been claiming that Iraq could reach 12 million barrels a day in capacity. That would rival Saudi Arabia, which currently has the largest capacity and is the largest oil producer in the world. The Oil Minister came into the OPEC conference claiming that Iraq has been denied its fair share of oil output in the past because of wars and international sanctions. He warned that was about to end, and that OPEC should reconsider how it calculates its quotas by taking into account a country’s development needs. He said that he expected some changes by 2011.

If Iraq does reach its potential, it has the ability to drastically affect the petroleum organization. Iraq has been exempt from OPEC’s quotas since it invaded Kuwait in 1990. Now it wants to export as much as it can because it desperately needs the money to rebuild. That could flood the market and undermine OPEC’s control over prices. Given this, Iraq could force compromises on quotas, ignore them, or leave OPEC altogether. It could also challenge the group’s leader, Saudi Arabia, which has given Iraq the cold shoulder since the U.S. invasion because it fears Shiite rule and Iran’s influence.

This could be a huge step in Iraq returning to the international stage. Baghdad was once a leading capital in the Arab world, but after 2003, Iraq was so caught up in internal divisions and civil war that it lost its place. Not only that, but all of the regional players have become involved in Iraqi politics, mostly to the detriment of the country. Iraq’s new oil deals, if successful, could give the nation the leverage it needs to once again be a player in the Middle East, but that’s still a big if as its petroleum industry has some massive hurdles to overcome before it can produce as much as the Oil Minister wants it to. It is a change though to talk about Iraq influencing others rather than it being the other way around as has been the norm since the overthrow of Saddam.

SOURCES

Agence France Presse, “No More Gestures To Saudi Arabia – Iraqi PM Maliki,” 5/28/09

Amies, Nick, “Iraq oil auctions cause concerns over stability in Gulf hierarchy,” Deutsche Welle, 12/23/09

Blas, Javier, “Iraq to challenge Opec on ‘fair share’ of output,” Financial Times, 12/22/09

What Do The New Oil Deals Mean for The Kurds?

In mid-December 2009 the Iraqi Oil Ministry carried out its second round of bidding on oil fields by international companies. Winning offers were made on seven of the ten fields up for auction. Afterward Oil Minister Hussain Shahristani said Iraq could reach eleven million barrels a day in capacity in six years, which could make it one of the largest producers in the world. This may turn out to be a major setback for the Kurdistan Regional Government (KRG), and its own petroleum policy.

Since 2003 the KRG has been hoping that its oil reserves would give it greater autonomy, and perhaps eventually independence. They signed their first oil deal with a Turkish company in January 2003, and then finalized over twenty others in the following years. None of these went through the Oil Ministry. Most of these deals were for exploration, but with Iraq’s oil production at below pre-invasion levels, Kurdistan believed that Baghdad would eventually have to accept their oil policy and allow them to export. The KRG also attempted to foster closer ties with Turkey and Europe, offering to export oil directly to the former, and trying to get involved with the proposed Nabucco natural gas pipeline to the latter. If these deals succeeded than Kurdistan would be connected to the international energy trade, could put more pressure on Baghdad to accept its energy policy, and gain greater autonomy from the central government. Some believed that this would give the Kurds the self-sustainability and influence they would need to declare independence sometime in the future.

All of these goals are now in jeopardy because of the Oil Ministry’s second bidding round. With international companies finally agreeing to Baghdad’s terms, and Iraq’s hopes of becoming one of the largest oil exporters in the world, there is no reason for the central government to give into the Kurds’ demands. The Oil Ministry has always vigorously protested the Kurds’ actions, and blacklisted any petroleum corporations that do business with them, leaving only small businesses investing there. They and the KRG still hope that Baghdad will eventually allow them to export because no government will turn down money, but that’s becoming less and less likely now. In fact, the Kurds may be the biggest losers if Iraq’s oil potential is finally tapped.

SOURCES

AK News, “Iraq’s oil and gas assets are shared: Barzani,” 11/11/09

International Crisis Group, “Iraq and the Kurds: Trouble Along the Trigger Line,” 7/8/09
- “Oil For Soil: Toward A Grand Bargain On Iraq And The Kurds,” 10/28/08

Lando, Ben, “In the theater of oil, the politics of Iraq,” Iraq Oil Report, 12/17/09

Yackley, Ayla Jean, “Iraq’s new oil deals seen weakening Kurds’ hand,” Reuters, 12/17/09
- “UPDATE 2-Kurds say Iraqi oilfield auction is being rushed,” Reuters, 12/10/09

What’s In The Future For Iraq?

Iraq is entering its seventh year since the U.S. invasion. Many things have changed in that time period, from the chaos that followed the collapse of the state after Saddam was overthrown, to the civil war that erupted, to the Surge. At the end of 2009 three Iraq analysts, Sam Parker of the United States Institute for Peace, Michael Hanna of the Century Foundation, and Reidar Visser of the Norwegian Institute of International Relations, wrote pieces speculating on what lay ahead for Iraq. All three agree that politics is the main forum for disputes within Iraq now, but don’t see much hope for the country’s elites to overcome their differences any time soon.

Sam Parker in his article “Is Iraq Back?” for Current History, and Michael Hanna in “Transitional state” in the Abu Dhabi newspaper The National start off by talking about Iraq’s current political situation. Both believe that politics has replaced violence as the main way groups in the country now resolve their problems. This started in early 2005 when some militants first began turning on Al Qaeda in Iraq, which would eventually snowball into most of the insurgency switching sides and giving up the fight to join the Anbar Awakening and the Sons of Iraq. Sunnis also greatly regretted boycotting the 2005 elections, which isolated them from local and national governments. In the 2009 provincial elections, Sunni turnout was very high as a result, and deaths have taken a sharp drop since then as a result. This process will continue in the 2010 vote, and has led Iraq from being a failed state to a fragile one.

What the central government now faces are three large and daunting problems, the first of which is sectarianism. Parker believes that this is now more about identity than religious differences, as Iraqis tend to vote for candidates of their own community. That means any future government will have to continue to include representatives of each of the major groups, the Kurds, Shiites, and Sunnis. These large groups however, are breaking up into smaller factions. The Shiites for example, ran on one large list in 2005, the United Iraqi Alliance, but in 2010 will be competing in two lists, the State of Law led by Prime Minister Nouri al-Maliki, and the National Alliance made up of the Supreme Islamic Iraqi Council and the Sadrists. Reidar Visser of the Norwegian Institute of International Relations in “COIN to Nowhere? Lesson from Iraq, Questions for Afghanistan” adds that he believes that these sectarian divisions have solidified rather than weakened. For example, while Maliki’s State of Law tried to create new cross-sectarian alliances after the 2009 elections and attempted to reach out to Sunnis and former Baathists, he was later stopped by criticisms by the other Shiite parties, pressure from Iran, and the Obama administration, which continues to stress a grand bargain between the three major groups. He then agrees with Parker and Hanna that any new Iraqi government will look and operate very much like the old one as a result.

The ethnosectarian groups also have long-standing differences over things like federalism versus centralism, oil policy, and the Arab-Kurd dispute. Hanna writes that there have been no serious efforts to deal with any of these issues, and that any new government is likely to be just as divided as the current one. Many of these problems have their origins in the 2005 constitution, which was drafted while the Iraqi state was weak and the sectarian war was just about to take off. The Arab-Kurd divide prevents any major changes to the document, leading to more deadlock. Hanna doesn’t believe that these divisions will lead the country back to civil war, and oddly adds that not dealing with them right now may be the best thing for Iraq right at the moment. He’s afraid that any move towards majority rule, and away from consensus could do more harm than good because the country’s weak institutions may not be able to deal with winners and losers. Visser has written extensively arguing the opposite, that the Iraqi system of consensus and quotas within the government should be ended because it only maintains the sectarian divisions.

The paralysis in Baghdad means that more mundane issues like basic governance, services, the displaced and refugees, corruption, jobs, poverty, etc. can’t be addressed. Technical issues like boosting oil production, and election laws for example get endlessly delayed because of the larger disputes between the ethnosectarian groups. The lack of development and the Arab-Kurd divide also allows militants to continue their attacks in Iraq.

All three analysts bring up important issues for Iraq’s future. Iraq is no longer a failed state as it once was. It is gaining back both its sovereignty and domestic standing. Violence is also down to its lowest level since the 2003 invasion, and the struggle for political power through peaceful means is now paramount. The inability of Baghdad to deliver on many basic needs however, its corruption, and sectarianism continue to eat away at its standing with the public. The continued factionalization of Iraq’s three major groups also means that it will be harder rather than easier to put together a new government and get things done. Parker and Hanna point out that this makes Iraq not much different from many other Third World countries who not only struggle with development, but also power sharing and ethnic differences. The problem is that public dissatisfaction with a government that seems dysfunctional can undermine a nascent democracy, and lead to a return to autocracy or worse, and that may be Iraq’s largest dilemma in the long-term.

SOURCES

Hanna, Michael, “Transitional state,” The National, 11/26/09

Parker, Sam, “Is Iraq Back?” Current History, December 2009

Visser, Reidar, “COIN to Nowhere? Lessons from Iraq, Questions for Afghanistan,” Iraq and Gulf Analysis, 12/1/09