Electricity Output Reaches Post-Invasion High, But System Still Plagued By Problems

The Special Inspector for Iraq Reconstruction reported that for the fifth straight quarter Iraq’s average electricity supply increased from August to October 2009. For the 3rd quarter of 2009 Iraq produced 6,439 megawatts, a post-invasion high. That was a 10% increase from the 2nd quarter. In 2007 Iraq produced 4,488 megawatts, with 4,198 coming from the Ministry of Electricity, and 290 being imported. In 2009 the Ministry was responsible for 5,209 megawatts, 669 megawatts came from other countries, and 560 were from private generators. Iraq saw a 1,951 megawatt increase over those two years.

The growth in power supply comes from multiple sources. Half of the increase came from working on existing power plants at a cost of more than $2 billion in U.S. reconstruction aid since 2003. 29% of the increase was from two new private power plants opening in the Kurdistan Regional Government. 19% of this quarter's increase came from importing electricity from Iran and Turkey. In 2007 Turkey was the main supplier, providing 60% of imports, but since then Iran was eclipsed them, now accounting for 80%. The Electricity Ministry has also been able to make some small increases in its capacity. It has added two power plants on boats in Basra in 2009 for example, run by a Turkish company. They have a combined capacity of 250 megawatts.

The Ministry has bigger plans in store as well. In 2009 they finally got funding to buy turbines from General Electric and Siemens. These will be installed in twenty locations throughout the country. Every province except the three in Kurdistan will get at least one new power plant out of the deal. Construction is expected to begin in late 2010 or early 2011, and the new capacity will come on line in 2-6 years. When finished, the turbines will add an estimated 10,000 megawatts. There is a major problem with this plan however. Iraq's power grid cannot handle this increase. The transmission and distribution systems need to be renovated, but there are no plans to do so. There are also questions about whether the government will be able to provide fuel for all of these new plants adequately. The Electricity's Ministry promises therefore, may never be fulfilled. Baghdad will also have a hard time coming up with any extra money as it is facing a second year of budget deficits due to moderate oil prices, which provide almost all of its revenue.

Despite the recent increases, the national grid still does not meet the country’s demands. The Special Inspector General believes that the gap between supply and demand is twice what it was in 2003, although it has been slightly reduced since 2007. Based upon estimates it’s believed that the Electricity Ministry served 69% of the national demand in the 3rd quarters of 2009. In the 3rd quarter of 2007, it only met 54%. In terms of the provinces, Sulaymaniya, Basra, Irbil, and Diyala in that order did the best supplying electricity, meeting anywhere from 83% to 99% of demand. That’s because those governorates either have their own power plants or import large amounts from Iran. At the opposite end of the spectrum, Wasit, 51%, Maysan, 53%, Babil 56%, Ninewa and Najaf at 58%, do the worst serving their people. Because Iraqis cannot rely upon the government for its power, most rely upon private generators.

Electricity Supply And Demand By Provinces

Province	Avg. Daily Electricity Load Served (MW)	Avg. Daily Estimated Electricity Demand (MW)	Avg. Daily Demand Met
Sulaymaniya	352	357	99%
Basra	806	929	87%
Irbil	356	411	86%
Diyala	196	236	83%
Dhi Qar	289	405	71%
Salahaddin	275	385	71%
Tamim	222	325	68%
Muthanna	137	202	68%
Anbar	219	329	67%
Baghdad	1,718	2,571	67%
Dohuk	132	203	65%
Karbala	164	273	60%
Qadisiyah	150	253	59%
Najaf	216	375	58%
Ninewa	491	851	58%
Babil	240	425	56%
Maysan	145	273	53%
Wasit	155	304	51%

Iraq’s generators also do not operate up to their capabilities. Nameplate capacity is how much a generator should be able to produce in ideal conditions. Feasible capacity is how much it can produce given the actual conditions. Iraq has a nameplate generating capacity of 15,300 megawatts, and a feasible capacity of 11,150. Both were 4% increases from the 2nd quarter of 2009. However in the 3rd quarter Iraq only operated at 38% of nameplate capacity and 52% of feasible capacity. The Qudas power plant in Baghdad for example, which the U.S. spent $250 million to renovate, has a nameplate capacity of 910 megawatts, but only averages 429 megawatts of actual production, 47% of its nameplate capacity.

After the overthrow of Saddam, Iraqis went on a buying spree of consumer electronics. This has greatly increased demand for power, which has not been met by the increase in production. The lack of adequate funds, the inability of the Electricity Ministry to spend what it gets, not enough skilled and trained personnel, poor maintenance and aging equipment, along with subsidized energy and a large black market in generators encourages use rather than conservation. These all mean that demand will continue to increase in the near future, and even with the new power plants and renovations, the power system will still probably be running a deficit.

SOURCES

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

Incompetence Of The Iraqi Security Forces Before The December 8 Baghdad Bombings?

After the December 8, 2009 Baghdad bombings, members of the security forces and related ministries have been grilled by the Iraqi parliament over their conduct. It’s been revealed that the security forces received two separate tips that an attack was imminent that day, yet they claimed they could do nothing about them.

First, according to independent Parliamentarian Mithal al Alusi, the Americans and the Interior Ministry warned the Baghdad Operations Command of impending car bombings on December 8. First, the Americans told the security forces about their information around 6 a.m. that morning. They said the attacks would happen between 8 a.m. and 6 pm. Around an hour later, the Interior Ministry told the Baghdad Operations command that they had receiving information that a car bombing would occur in the afternoon as well. Four hours later the bombs went off in four parts of the capitol.

Alusi’s rendition of events is also different from those of the security forces. The lawmaker said that the warnings had the right locations, but the Baghdad Operations Command (BOC) disputes that. Alusi also claimed that the security forces said they could not act on the American tip because it gave the wrong types of cars used. The former head of the BOC, General Abboud Qanbar, who was relieved of his position by Prime Minister Nouri al-Maliki immediately after the bombing, stated that there was not enough time to act on either piece of information.

There seems to be some gross incompetence going on somewhere within the security forces. The first bomb went off fives hours after the American tip. Wouldn’t that be enough time to set up new roadblocks and intensify searches? The claim that the police and Army couldn’t act because the tips warned of the wrong types of cars used is even worse if true. In the last couple years, Iraqi views of their security forces have greatly improved. According to opinion polls, the public has more confidence in the Army and police than they do the government overall. The massive bombings that have occurred every other month since August are meant to challenge these perceptions. Already, many Iraqis seem to be disheartened by their politicians bickering and backstabbing after each attack, and inability to stop the terrorists. The testimony to parliament by the security forces and Interior and Defense Ministries, may have the same affect, although most anger for now is directed towards the country’s leaders.

SOURCES

Carter, Chelsea, “Iraq: No time to act after US tip before blasts,” Associated Press, 12/13/09
- “US military confirms it warned Iraqis of possible Baghdad blasts, had no specific information,” Associated Press, 12/14/09

Inside Iraq, “Americans, Iraqi Interior and Intelligence tipped-off Authorities before the Bombings,” McClatchy Newspapers, 12/12/09

2nd Round of Bidding On Iraq’s Oil Fields Ends As A Success

The second round of bidding on Iraq’s oil fields ended on December 12, 2009. It was much more successful than the first round that occurred in June 2009. That auction only produced one successful contract, although two more were negotiated afterward. This round garnered seven deals for the ten fields up for bid.

Initially, the second round did not get off to a good start. On the first day, December 11, only two bids were accepted. The next day went much better with five more. If all of the companies are able to meet their projections, Iraq has the potential to add 4,765,000 extra barrels to its production total, which is currently averaging 2.39 million barrels a day in 2009. The deals from the first round could add an additional 6,075,000. Within thirteen years these oil companies are promising Iraq up to 13.23 million barrels a day in capacity, which would make it the largest oil producer in the world. Oil Minister Hussain Shahristani was even more optimistic, claiming that Iraq could reach 12 million barrels a day in six years, while noting that actual production would be determined by demand.

There are many that doubt Iraq’s ability. Oil analysts believe that all of the new facilities required to develop this potential would set off inflation in services, and be hard for the government to complete. Iraq has also not had to follow OPEC production quotas since it was placed under international sanctions after the 1991 Gulf War. Iraq is working to ends those, and thus would eventually have to comply with the organization’s prescriptions again. Some Oil Ministry officials however, are talking like they would not have to. The CEO of France’s Total oil company said in November that 10-12 million barrels a day in Iraqi production was “crazy.” He believed a much more realistic potential was 7-8 million barrels a day. Other experts believe that Iraq’s increased production would hurt it in the long run. The Director of the Center for Global Energy Studies in London, England for example, believes that greater petroleum production would lead to a fall in prices and profits for Iraq in the long run. Even Prime Minister Nouri al-Maliki’s oil adviser said recently that Iraq could not reach the 10-12 million barrel plateau, and thought 6 million barrels was more achievable.

Whatever the final outcome is, Iraq is finally garnering the foreign investment and expertise it desperately needs to boost its oil production. Since the U.S. invasion the country has become more dependent upon petroleum than ever before as the other sectors of the economy have faltered due to American and government polices and violence. It needs to garner as much money as possible from its one major resource so that it can develop and sustain itself. As always, it’s up to the bureaucracy to fashion this into a successful venture. This may be a Catch 22, as other oil producing countries do not provide much hope. Few have diversified their economies, and remain tied to one industry that does not provide much employment. The development of petroleum could thus make Iraq even more reliant upon it.

First Day Deals December 11, 2009

Halfaya
Reserves: 4.098 billion barrels
Winner: China’s CNPC, Malaysia’s Petronas, and France’s Total
Terms: $1.40 for each extra barrel produced, will boost production to 535,000 barrels a day
Losing Bids:
1. Norway’s Statoil and Russia’s Lukoil – Asked for $1.53 per extra barrel and promised 600,000 barrels a day output
2. India’s ONGC and India Oil, and Turkey’s TPAO – Asked for $1.76 per extra barrel and promised 550,000 barrels a day output
3. Italy’s Eni, South Korea’s Kogas, U.S. Occidental Petroleum, Angola’s Sonangol, and China’s CNOOC – Asked for $12.50 per extra barrel and promised 400,000 barrels a day output

Majnoon
Reserves: 12.58 billion barrels
Winner: Anglo-Dutch Shell and Malaysia’s Petronas
Terms: $1.39 for each extra barrel produced, will boost production to 1.8 million barrels a day
Losing Bids: France’s Total and China’s CNPC – Asked for $1.75 per extra barrel and promised 1.405 million barrels a day output

Qayara
Reserves: 807 million barrels
Winner: Angola’s Sonangol
Terms: $5 per extra barrel produced, will boost production to 120,000 barrels a day
Losing Bids: None

Second Day Deals December 12, 2009

Badra
Reserves: 109 million barrels
Winner: Russia’s Gazprom, South Korea’s KoGas, Malaysia’s Petronas, and Turkey’s TPAO
Terms: $5.50 per extra barrel produced, will boost production to 170,000 barrels a day
Losing Bids: None

Gharraf
Reserves: 863 million barrels
Winner: Malaysia’s Petronas and Japan’s Japex
Terms: $1.49 per extra barrel produced, will boost production to 230,000 barrels a day
Losing Bids:
1. Turkey’s TPAO and India’s ONGC – Asked for $2.76 per extra barrel and promised 200,000 barrels a day output
2. Kazakhstan’s KazMunaiGas, South Korea’s KoGas and Italy’s Edison – Asked for $2.55 per extra barrel and promised 185,000 barrels a day output
3. Indonesia’s Pertamina – Asked for $7.50 per extra barrel and promised 150,000 barrels a day output

Najma
Reserves: 858 million barrels
Winner: Angola’s Sonangol
Terms: $6 for each extra barrel produced, will boost production to 110,000 barrels a day
Losing Bids: None

West Qurna 2
Reserves: 12.876 billion barrels
Winner: Russia’s Lukoil, Norway’s Statoil Hydro
Terms: $1.15 for each extra barrel produced, will boost production to 1.8 million barrels a day
Losing Bids:
1. Malaysia’s Petronas, Indonesia’s Pertamina, Vietnam’s Petro Vietnam – Asked for $1.25 per extra barrel and promised 1.2 million barrels a day output
2. France’s Total – Asked for $1.72 per extra barrel and promised 1.43 million barrels a day output
3. British Petroleum and China’s CNPC – Asked for $1.65 per extra barrel and promised 888,000 barrels a day output

Fields Receiving No Bids

East Baghdad
Eastern Fields
Middle Furat

SOURCES

BBC, “Iraq oil capacity ‘to reach 12m barrels per day,’” 12/12/09

Brock, Joe, “Firms overstate Iraq oil potential – govt adviser,” Reuters, 12/7/09

Bureau of Near Eastern Affairs, “Iraq Status Report,” U.S. Department of State, 12/9/09

Canty, Daniel, “12 million barrels a day is unrealistic for Iraq,” Arabian Oil and Gas, 11/17/09

The National, “Iraq oil deals,” 12/12/09

Williams, Timothy, “Oil Companies Look to the Future in Iraq,” New York Times, 12/1/09

Yackley, Ayla Jean, “Iraqi oil deals mean reams of steel, miles of pipes,” Reuters, 12/10/09

Is The Security Situation In Iraq Getting Worse?

Every time there is a massive, headline-grabbing bombing in Iraq, it sets off a wave of reports and commentaries in the West about how the security situation in the country is getting worse. The most recent such attack was on December 8, 2009 when four targets in Baghdad were assaulted resulting in 127 deaths and 448 wounded. In August and October there were similar bombings of government ministries and the Baghdad provincial council building. A typical response was by John McCreary of AFCEA Intelligence who wrote on December 8 that, “Day by day, the security situation is deteriorating.  This should surprise no Readers and it will get much worse in the next few months.” Thomas Ricks, author of the books The Fiasco and The Gamble, member of the Center for a New American Century think tank, who runs the Best Defense blog on the Foreign Policy website, is another who has an on-going series of posts called “Iraq, the unraveling” that argues things are going downhill in the country. The problem with these writers is that they appear to be basing their writings purely upon press reports, which focus almost exclusively on violence. As reported before, that gives a distorted picture of the situation. What they lack is any kind of research or background into the larger trend in violence that can put these attacks into context.

First, there is no direct correlation between large bombings and the overall security situation. In June 2009 for example, there were 14 mass casualty bombings that resulted in 174 deaths and 517 wounded. The next month there were 35 such attacks that led to 180 dead and 655 wounded. According to Iraq Body Count however, there were more deaths in June, 488, than July, 395, even though the latter had more bombings.

Comparison Of Bombings and Overall Deaths In Iraq – June vs July 2009

June 2009
Mass Casualty Bombings: 14
Deaths Caused By: 174
Wounded Caused By: 517
Overall Monthly Death Count: 488

July 2009
Mass Casualty Bombings: 35
Death Caused By: 180
Wounded Caused By: 655
Overall Monthly Death Count: 395

Second, even if one were to judge Iraqi security by multiple fatality bombings, they have been declining since their peak in 2006. The Brookings Institution’s Iraq Index tracks such attacks from May 2003 to the present. According to their numbers, there were an average of 5.1 of these bombings a month in 2003, 13.5 in 2004, 29.1 in 2005, before they reached their highest point in 2006 with an average of 50.9. After that there was a steady decline with an average of 38.5 bombings a month in 2007, followed by 21.0 in 2008, and 15.5 this year from January to November 2009.

Average Number of Mass Casualty Bombings 2003-2009
2003: Avg. 5.1
2004: Avg. 13.5
2005: Avg. 29.1
2006: Avg. 50.9
2007: Avg. 38.5
2008: Avg. 21.0

2009: Avg. 15.5

Third, attacks overall are down to their lowest levels since 2004. From January to March 2004 there were around 250-300 security incidents each week. Attacks took off as the sectarian war started with the bombing of the Samarra mosque in February 2006 peaking at 1,800 per week in May 2007. After that point, weekly attacks steadily decreased with a few up-ticks. Since July 2009 they have averaged below 200 per week.

 Some thought that the U.S. withdrawal from Iraq’s cities on June 30, 2009 would negatively affect security, but that hasn’t happened either. From mid-February to June 30, 2009 there were an average of 250 security incidents per week. From the withdrawal date to early November 2009 there has been an average of just under 200 attacks per week. The number killed has also seen a very slight decrease from before and after the pullout.

Like bombings, there is also no correlation between overall attacks and casualties in Iraq. As the chart below shows, security incidents reached their highest level at the middle of 2007, yet the number of deaths had been declining since the very end of 2006.

  

Regarding deaths, 2009 has seen the fewest number since the Iraq war began. From May to December 2003 when the invasion ended and the insurgency was just beginning, there was an average of 578.8 deaths per month according to Iraq Body Count. In comparison, from January to November 2009 there have been an average of 388.7. In fact, August 2009 was the only month this year that casualties reached the 500 mark. Deaths reached their highest levels in late-2006 to early-2007 when over 3,000 were being killed a month. Since then they have seen a steady decline, with November 2009 having the fewest fatalities since 2003.

Iraqi Monthly Deaths 2003 vs 2009

2003
May 545
June 593
July 650
Aug. 790
Sep. 553
Oct. 493
Nov. 478
Dec. 529
Avg. Monthly Deaths: 578.8

2009
Jan. 276
Feb. 343
March 416
Apr. 484
May 332
June 488
July 395
Aug. 593
Sep. 299
Oct. 438
Nov. 212
Avg. Monthly Deaths: 388.7

 

Overall, there is nothing to support the thesis that the security situation is worsening in Iraq. Mass casualty bombings, security incidents, and deaths have all gone down since the sectarian war of 2006-2007. The situation has not gotten worse since the U.S. pulled out of Iraq’s urban areas either at the end of June 2009. The major reason for this change is the fact that the majority of the Sunni insurgency gave up and switched sides to join the Anbar Awakening and Sons of Iraq program from 2005-2007. More recently, many Sunnis have decided to join the political process after they boycotted the first election in 2005. There are still militants in Iraq who carry out attacks every day, but their numbers and areas of operation are severely limited. Their violence will likely continue for the foreseeable future however as Iraqi politics are still divided, and some religious zealots still feel that Iraq is their cause. It should also be stressed that despite the drop in deaths and attacks, and the weakening of the insurgency, Iraq remains one of the most violent countries in the world. These incidents need to be put into a larger political context however, instead of the knee-jerk commentary that is currently prevalent.

SOURCES

Cordesman, Anthony, “Iraq: Security Trends,” Center for Strategic and International Studies, 11/19/09

McCreary, John, “Night Watch For the Night of 8 December 2009,” AFCEA Intelligence, 12/8/09

O’Hanlon, Michael Livingston, Ian, “Iraq Index,” Brookings Institution, 12/11/09

RTT News, “Chief Of Iraqi Security Forces In Baghdad Replaced After Deadly Bomb Attacks,” 12/9/09

First Day Of New Bidding Round On Iraqi Oil Fields

Beginning on December 11, 2009 Iraq’s Oil Ministry began two days of bids on ten partially developed oil fields. The first round occurred in June 2009 and only led to one successful contract being signed by British Petroleum and the China National Petroleum Corporation (CNPC) for the Rumaila field in southern Iraq. Since then, two tentative agreements have also been signed with Italy’s Eni, America’s Occidental Petroleum Oil, and South Korea’s KOGAS for the Zubayr field, and with Exxon Mobile and Royal Dutch Shell for West Qurna 1. The Iraqi government was hoping that this new round would go much better as international oil companies seem to be coming around to their terms, but today’s session only led to two deals.

Out of the forty-four companies participating in the December 11 proceedings, only four put in winning bids. First was a consortium of Shell and Malaysia’s Petronas for the Majnoon oilfield in southern Iraq. It was the largest in the round with a reserve of 12.88 billion barrels of oil. They agreed to be paid $1.39 per extra barrel they produce over a certain benchmark to be determined later, and promised to raise production from the current level of 45,900 barrels a day to 1.8 million a day in ten years. Another group made up of CNPC, Petronas, and France’s Total made a successful offer for the Halfaya field. They agreed to be paid $1.40 per extra barrel produced, and increase production from 3,100 barrels a day now to 535,000 barrels a day in thirteen years. Halfaya has a reserve of 4.1 billion barrels. The deals, if finalized, will be for 20 years and give the companies 75% ownership, and the Iraqi Oil Ministry 25%. The Eastern Fields, made up of Gilabat, Kashem al-Ahmar, Naudoman, and Qumar, and the North and Central East Baghdad fields, got no offers, and Qayara only got one bid by Angola’s Sonangol, which was rejected.

The Oil Ministry is moving ahead with these rounds even though they are raising political objections. The head of the oil and gas committee in parliament has demanded that the legislature approve all deals, and the Kurdistan Regional Government has said that they need to be included in any negotiations for oil fields in disputed territories in northern Iraq. The country’s oil workers and unions are also apprehensive about the entry of foreign companies into the industry, fearing that they will be fired. The Oil Ministry has ignored all of these complaints.

Those objections, along with the failure of the parliament to pass a new oil law, have left the oil corporations apprehensive about doing business in Iraq. The terms set by the Oil Ministry also offer limited profits, but the petroleum industry is tempted by Iraq’s 115 billion oil reserves, one of the largest in the world. If the deals go through, Iraq will also need billions of dollars in new oil equipment and services, and thousands of new workers only some of which will be paid for by the companies. Baghdad may not be able to provide the rest. Together, these are the reasons why only two possible contracts have come out of the December 11 round.

Fields Up For Bid On December 11, 2009
Majnoon – Winning bid by Shelland Petronas
Halfaya – Winning bid by CNPC, Petronas, Total
Qayara – Rejected bid by Sonogol
North and Central East Baghdad – No bids
Eastern Fields (Gilabat, Kashem al-Ahmar, Naudoman, Qumar) – No bids

Fields Up For Bid On December 12, 2009
Badra
Middle Furat (Kifl, West Kifl, Merjan)
Garraf
Najmah
West Qurna Phase 2

Oil Companies Participating (By Country)
Algeria – Sonatrach
Angola – Sonangol
Australia – BHP Billiton, Woodside
Canada – Nexen
China – CNOOC, CNPC, Sinochem
Denmark – Maersk
England – BG Group, BP, Cairn
France – Total
Germany – Wintershall BASF Group
India – Oil India, ONGC
Indonesia – Pertamina
Italy – Edison, Eni
Japan – Inpex, Japex, JOGMEC, Mitsubishi, Nippon
Kazakhstan – KazMunaiGas
Korea – Kogas
Malaysia – Petronas
Netherlands – Shell
Norway – Statoil Hydro
Pakistan – Pakistan Petroleum
Russia – Gazprom, Lukoil, Tatneft
Spain – Repsol
Turkey – Turkish Petroleum Corp
U.S. – Anadarko, Chevron, Conoco Phillips, Exxon Mobile, Hess Corp, Marathon,
    Occidental Petroleum
Vietnam – Petrovietnam

SOURCES

Hoyos, Carola, “Iraq set to be second in oil league table,” Financial Times, 12/11/09
- “Shell wins Iraq oil ‘gold rush’ auction,” Financial Times, 12/11/09

Lando, Ben, “Round 2 of the Iraq oil bidding battle begins,” Iraq Oil Report, 12/10/09

Mohammed, Aref and Abbas, Mohammed, “Job fears, hopes temper Iraq welcome for oil majors,” Retuers, 12/7/09

The National, “Iraq holds oil auction amid security fears,” 12/11/09

Al-Salhy, Suadad and Rasheed, Ahmed, “SCENARIOS-Will Iraq honour deals with oil majors after polls?” Reuters, 12/10/09

Yackley, Ayla Jean, “Iraqi oil deals mean reams of steel, miles of pipes,” Reuters, 12/10/09
- “UPDATE 2-Kurds say Iraqi oilfield auction is being rushed,” Reuters, 12/10/09

Iraq Lacks Will To Confront Corruption

Iraq continues to be one of the most corrupt countries in the world. In its recent report, Transparency International ranked Iraq the fourth most corrupt nation out of 180, tied with Sudan. While Iraq’s anti-corruption agencies continue their work at the national and provincial level, the real problem is the lack of will and commitment by the country’s leaders to the fight.

From January 1 to August 3, 2009 there were 80 successful convictions for corruption. The problem is that there are 445 other cases waiting to be adjudicated from just this year according to Iraq’s High Judicial Council. Of those found guilty, 45 were in Baghdad, 14 in Ninewa, 6 in Tamim and Babil each, 4 in Wasit, 2 in Muthanna, and 1 each in Karbala, Najaf, and Dhi Qar. In fourteen cases, the value of the crimes together was worth $136,000. The Ministry of Defense was implicated the most with 12 cases, followed by 9 from the Finance Ministry, 7 from Interior, 1 from Oil, 1 from Labor, 1 from Electricity, 1 from Transportation, 1 from Justice, and 1 from Displacement and Migration. A 2008 report by the Integrity Commission, one of three anti-corruption agencies in Iraq, found that the Defense Ministry was one of the most corrupt in the government. In 2008 there were $1.3 billion worth of cases pardoned, most from the Ministry of Defense. The Ministry also accounted for the third most convictions overall in the country last year. A major problem was that 42% of those found guilty in 2009 were absent for their sentencing, probably meaning they had fled.

This year has also seen some of the highest profile cases since the 2003 U.S. invasion. In May the Trade Minister was arrested for corruption charges surrounding the food ration system, which he is in charge of. In September the Deputy Transportation Minister was detained for attempting to obtain a $500,000 bribe from a private security company. The newly elected provincial councils have also indicted a number of people at the local level. In Karbala for example, four officials were arrested for embezzlement. Just recently in November, 13 members of the Baghdad mayor’s office were found stealing $20 million by forging checks for ghost employees.

Despite these successes, the anti-corruption agencies face an uphill battle in Iraq. The greatest impediment is the country’s leadership. Publicly, Iraq’s government says it is committed to dealing with corruption. In June 2009 Baghdad announced it would address bribery in public agencies. The next month the Kurdistan Regional Government said it was creating a program to promote good government and transparency. Then in October Prime Minister Nouri al-Maliki gave a speech warning that political corruption was more dangerous than financial improprieties because it undermine the government. Yet Iraq’s ministries consistently stand in the way of investigations. Article 136B allows any minister to stop an inquiry into corruption. In 2008 210 cases were stopped using 136B, including two involving ministers and one case worth $6 million. Many high government officials also refuse to follow rules and regulations. For instance, only 92 of 275 members of parliament had made their financial declarations this year. Others have also tried to defer blame. Maliki for example, recently answered questions from reporters online, and while he said that corruption was more widespread now than under Saddam, he blamed Al Qaeda and Baathists for spreading fake stories about the government that influenced organizations like Transparency International.

With little to no accountability at the top, lower level corruption is allowed to flourish. In Diyala for example, the two former deputy governors fled after they heard they were going to be prosecuted. A U.S. officer in charge of reconstruction projects there said that he had found several fake projects, or contractors not doing their work because they were paid upfront. Iraqi officials in Diyala also said they suspected the police were extorting money from prisoners.

It’s no wonder than that few Iraqis have any confidence in their public officials taking care of this very serious problem. That is the most costly affect of corruption. It undermines the standing of the authorities, which is especially important in Iraq that is struggling after years of dictatorship to establish a new government. A country is only as democratic as its people want it to be. If they become apathetic or disheartened, then the government assumes more and more power, and becomes more corrupt. This is the situation that Iraq now faces.

SOURCES

Dawlat Al-Qanon, “Al-Maliki Answers Reporters’ Questions Online,” MEMRI Blog, 12/8/09

Inside Iraq, “$1.3 billion is pardoned in Iraq and more,” McClatchy Newspapers, 9/13/09

Al Rafidayn, “Gang steals millions of dollars in Iraq, regardless of names and fake checks,” 11/23/09

Radio Free Europe/Radio Liberty, “Iraqi Deputies Chided For Not Making Financial Declarations,” 10/8/09
- “Iraqi Premier Warns Of Dangers Of Political Corruption,” 10/16/09

Al-Shara, Hazim and Mohamed, Abeer, “Iraqis Critical of Anti-Corruption Efforts,” Institute for War & Peace Reporting, 11/24/09

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

Tom, Peter, “Graft the next great hurdle to a ‘new’ Iraq,” Global Post, 10/16/09

Transparency International, “Corruption Perceptions Index 2009,” 11/17/09

Election Law Passed By Presidential Council, Vote Now Set For March 7, 2009

All three members of the Presidential Council, President Jalal Talabani, Vice President Adel Abdul Mahdi, and Vice President Tariq  al-Hashemi approved the Iraqi election bill passed by parliament on December 6, 2009. It is now law. The new date for the vote is March 6, 2010.

SOURCES

Aswat al-Iraq, “Iraq sets new election date,” 12/9/09
- “PB OKs electoral law,” 12/9/09