Iraq's Kurds Try To Explain Their Oil Sales To Iran

The dispute between Baghdad and the Kurdistan Regional Government (KRG) over oil and fuel sales to Iran continues. The Kurdish government has attempted several different explanations about what is going on, but none is likely to resolve the issue.

The Kurds have fluctuated between three main themes when discussing their sales to Iran: that they are legal, that it is out of their control, and that it is Baghdad’s fault. First, the KRG’s Natural Resource Minister Ashti Hawrami told a New York Times reporter in May 2010 that only surplus fuel and other oil byproducts were being sent to Iran. In the following months he said that was legal because no crude oil was being sold. The KRG claimed that all oil sales would be coordinated with the central government. Later they claimed that all the sales were officially authorized by the Natural Resource Ministry, and they had that right as an autonomous region. They also told the press that these sales were known to Baghdad. Next, Minister Hawrami was reported as saying that there was smuggling going on from other parts of northern Iraq that traveled through Kurdistan to Iran, but that they had no control over them. They tried to blame that on the central government for subsidizing fuel, which keeps prices artificially low, and thus encourages smuggling to sell the products for a profit in other countries. The KRG has gone on and said that there is oil smuggling going on in southern Iraq to Iran as well to try to draw away attention from themselves. The last story that they have presented is that they are legally selling oil byproducts to private companies in Kurdistan, and that they are free to do what they want with it afterward. 

There are some consistencies to their claims, but also problems. First, the KRG has always maintained that they are not selling crude to Iran, only oil byproducts like fuel and diesel. They are also correct that there is smuggling going on in southern Iraq to Iran, and that government subsidies encourage criminals to buy or steal oil byproducts for cheap in Iraq, and then sell it abroad for a profit. Where they run into issues is over how fuel and other products are ending up in Iran. They’ve claimed that private companies are going to Iran on their own, but a Reuters report talked to truck drivers lined up at the Kurdistan-Iran border who said that they went to KRG run refineries, got official papers from the Natural Resource Ministry, and were told where to deliver their products in Iran. There could be both companies selling products to Iran and the KRG however. Another problem is that the Kurds told the press that they informed Baghdad of these exports, but the Oil Ministry has denied that. Finally the ultimate question is whether the Kurds have the authority to sell fuel to Iran or not. That can’t be answered right now as both the Oil Ministry and the Natural Resource Ministry disagree. Baghdad claims only they have the right to authorize exports of any energy products, while the KRG have stated that they can do so on their own. That’s caught up in the larger issue of the division of authority between the central government and the regional one. That’s unresolved just like the sales to Iran. The Kurds are going to continue to do it, while Baghdad will keep on objecting. The winner for now at least, are the Kurds who are allegedly making up to $264 million a month off of these operations, which supposedly goes right into the coffers of the two ruling Kurdish parties, and there is nothing that can stop them.

SOURCES

AK News, “KRG refutes Reuters’ exportation report,” 7/23/10
- “Kurdistan Government denies any breach of international law over exported out to Iran,” 7/21/10
- “No substantial change in oil exportation in August,” 7/15/10

Dagher, Sam, “Smugglers in Iraq Blunt Sanctions Against Tehran,” New York Times, 7/8/10

Lando, Ben, “UN oversight of Iraqi oil money struggling to adapt,” Iraq Oil Report, 7/28/10

Platts, “Iraq says to discuss oil smuggling to Iran with Kurd authorities,” 7/11/10

Al-Rafidayn, “The smuggling of oil revenues from Kurdistan to Iran amounting to $264 million per month,” 7/27/10

Reuters, “Despite pledges, Iraqi Kurd oil still flows to Iran,” 7/22/10
- “Iraq Kurds say to crack down on fuel smuggling,” 7/11/10

El-Tablawy, Tarek and Barzanji, Yahya, “Oil smuggling to Iran embarrassment for Iraq,” Associated Press, 7/13/10

Waleed, Khalid Khalid, Shorsh, “Oil Smuggling Allegations Widen Baghdad-Erbil Rift,” Institute for War & Peace Reporting, 7/23/10

Williams, Phil, “Criminals, Militias, And Insurgents: Organized Crime In Iraq,” Strategic Studies Institute, June 2009

General Electric Fined For Corrupt Practices During Oil For Food Program

In July 2010, General Electric (GE) was fined $23.5 million by the Securities and Exchange Commission (SEC) for illegal dealings with Iraq during the Oil for Food Program. Last year GE had to pay an additional $50 million for fraudulent activities in Iraq from 2002-2003. The SEC claimed that GE broke the Foreign Corrupt Practices Act when it offered equipment and services in illegal deals to Iraqi officials to win contracts. This was just the latest example of the vast corruption that occurred during the Oil for Food Program.

The Oil For Food Program was started in 1995 to allow Iraq to sell its oil under United Nations supervision in return for buying food, medicine, and humanitarian supplies. Since 1990 Iraq had been under U.N. sanctions for first invading Kuwait and then not fully declaring its weapons of mass destruction and nuclear programs. The Iraqi economy was strangled by the international restrictions, while malnutrition and infant mortality rates skyrocketed. (1) The U.N. came under public pressure to relieve these problems, which resulted in the Oil for Food Program.

Saddam Hussein took advantage of the new situation to undermine the sanctions. Iraq made companies pay a 10-35% surcharge on each barrel of oil sold through the program, with the difference being paid to Baghdad. It sold oil illegally for cash, and smuggled it out of the country as well to be sold on the black market. It offered oil vouchers to prominent individuals and businesses in return for them to work against the sanctions. Finally, Iraq demanded kickbacks from any company that wanted to sell goods to Iraq. That was the situation with GE. It had to bribe officials in the Iraqi Health Ministry in order to win deals with them. A review of abuses under the Oil for Food Program found that General Electric was just one of approximately 2,000 companies that paid kickbacks in return for contracts with Iraq. It also found that Baghdad earned between $10.8 billion to $12.8 billion through these illegal methods.

FOOTNOTES

1. Tyler, Patrick, “Western Health Study in Iraq Finds Child Mortality Has Nearly Tripled,” New York Times, 10/22/91

SOURCES

Iraq Survey Group, “Comprehensive Report of the Special Advisor to the DCIA on Iraq’s WMD,” 9/30/04

Lemer, Jeremy and Kirchgaessner, Stephanie, “GE pays $23m after Iraq probe,” Financial Times, 7/27/10

Tyler, Patrick, “Western Health Study in Iraq Finds Child Mortality Has Nearly Tripled,” New York Times, 10/22/91

Williams, Phil, “Criminals, Militias, And Insurgents: Organized Crime In Iraq,” Strategic Studies Institute, June 2009

Department Of Defense Didn’t Follow Accounting Rules During Iraq Reconstruction

On July 27, 2010 the Special Inspector General for Iraq Reconstruction (SIGIR) released an audit of the Department of Defense’s (DOD) management of the Development Fund for Iraq (DFI), which was used as a source of money for rebuilding Iraq. The Inspector General found that the DOD used the Fund in an ad hoc manner, never followed the guidelines set up for U.S. agencies involved in reconstruction, which means it can’t account for almost all of its spending, and is probably still using the Fund today even though it has no authority to do so anymore.

The Coalition Provincial Authority (CPA) created the Development Fund for Iraq in May 2003 with the cooperation of the United Nations. The DFI collected all of Iraq’s oil and gas revenues, leftover money from the U.N. run Oil for Food program, and frozen assets seized from the previous Baathist government. When the CPA was disbanded in January 2004 and sovereignty handed back to an interim government in Baghdad, the Iraqi Ministry of Finance was given nominal control of the Fund, but it signed over management of it back to the Americans. Some additional money was added to the DFI along the way, and by 2009 it had possessed a total of $9.149 billion. 

The SIGIR conducted two audits into the use of the DFI, one in 2009 and the other in 2010, and both times found accounting problems. In 2003 the Department of Treasury set up guidelines for all U.S. agencies to follow in Iraq, but the Department of Defense never really did. Rather, it carried out its reconstruction work in an ad hoc manner with each part of the DOD allowed to do what they wanted to, using whatever record keeping methods they chose. Only the U.S. Central Command (CENTCOM), which received $406 million from the Fund, followed Treasury’s rules. In fact, the rest of the Defense Department kept very few records of their uses of the DFI at all. For that reason, the Inspector General estimates that DOD cannot account for what it did with $8.7 billion of the $9.1 billion in the Fund.

Most of that money was actually spent in Iraq, but the sloppy management opened up opportunities for waste, fraud, and corruption. The 2009 SIGIR audit for example, discovered a 2005 case where eight CPA and Department of Defense officials were involved in bribery, fraud, and money laundering, which resulted in $7.8 million in fines.

Another troubling issue turned up by the recent audit is that the United States is no longer authorized to use the DFI, but probably is. That’s because DOD has no idea how much money they were authorized to use, where it is, or who has it because of their bad management. The Iraqis are supposed to have total control of the funds today, but part of it is lost in the Pentagon’s bureaucracy.

It should be no surprise that the Department of Defense has little idea about what happened with the Development Fund. In the early days of the U.S. occupation when the CPA was set up, it was desperate to get the Iraqi government up and running after it had collapsed. The CPA received huge bundles of money from the Federal Reserve Bank in New York, where the DFI funds were deposited. This was the largest cash transfer in U.S. history, with a total of $12 billion eventually being sent to Iraq. CPA officials were given stacks of cash to hand out to Iraqis and American contractors with little to no accounting of what it was being used for, whether it was effectively spent, and what happened afterward. Even when things became less chaotic, the DOD never organized its various agencies, and continued to let each follow its own rules, with no coordination. The SIGIR warns that the DOD has still not fixed its practices, so that they could make the same mistakes in the future. There are already reports of mismanaged reconstruction projects in Afghanistan as a result. This is just the latest example of the problems the Americans ran into trying to run the largest rebuilding project in U.S. history.

SOURCES

Special Inspector General For Iraq Reconstruction, “Development Fund for Iraq: Department of Defense Needs To Improve Financial and Management Controls,” 7/27/10
- “Hard Lessons,” 1/22/09

Iraq Moves Down List Of Failed States

In July 2010 the Fund For Peace and Foreign Policy magazine released their annual list of failed states. For the third year in a row Iraq moved down the list, but was still in the top 10.

The Failed States List is based upon 12 indicators. Those are demographic pressures, refugees/displaced, legacy of vengeance, chronic human flight, uneven economic development, economic decline, crime and delegitimization of the state, deterioration of public services, lack of rule of law/human rights abuses, standing of the security forces, factionalized elites, and outside intervention. Each one of those is given a score of 1 to 10 with 1 being the best and 10 being the worst. Those numbers are then added up and the total determines a country’s ranking in the list.

In 2010 Iraq was in the top 10 of failed states, but moved down the list from previous years. The top five failed states this year were Somalia, Chad, Sudan, Zimbabwe, and Congo. Iraq came in number 7. In 2009 Iraq was number 6, and number 5 in 2008.

Of the 12 factors used to rate countries, two worsened for Iraq, while the other ten either improved or stayed the same. Human flight went from 9.1 in 2009 to 9.3 in 2010 because most of the middle class fled during the sectarian war and has not returned. Iraq’s uneven economic development score also went up from 8.6 in 2009 to 8.8 in 2010. Development in Sunni areas is lagging behind Shiites ones largely because most of the country’s oil is concentrated in the south. Kurdistan is also richer than the rest of the country. What the study didn’t seem to take into account is that southern Iraq is the poorest region. It also cited the lack of a new oil law that would cover revenue sharing, but that ignores the fact that 90% of the government’s income comes from oil and that the provinces’ budgets are determined by their population so there is already a distribution of petroleum profits. At worse then, the human flight and uneven development scores should’ve stayed the same.

Another indicator that had a questionable rating was for economic decline. That stayed the same at 7.6. The description of economic activity noted that better security was allowing for growth, especially in retail. Foreign investors were also showing more interest in Iraq, although there were problems with owning land and getting through the country’s difficult rules and regulations. There also needed to be economic reform. That seemed a relatively positive review, and yet there was no change in the score from 2009.

All the other indicators stayed the same or improved. Demographic pressures went from 8.7 in 2009 to 8.5 in 2010. Iraq still has a high population growth rate, and a growing youth population with 38% of the country under the age of 15. Decreased violence is allowing greater movement within the country, which accounted for the better score. Refugees/displaced improved from 8.9 to 8.7 because more were returning home, although there were still around 2.8 million who had not. Legacy of Vengeance went from 9.7 to 9.3 as there was an improvement in ethnosectarian tensions. Legitimacy of the state stayed the same at 9.0. Corruption remains a huge problem that undermines confidence in the authorities, Shiites dominate politics, which causes resentment, and there are still terrorist attacks. Public services remained at 8.4 because of the inability of the government to provide them. There is a lack of sanitation, clean water, electricity, and health care. Although Iraqi prisons are notorious for overcrowding, abuse, torture, and the legal system lacks due process the human rights score went down from 9.3 to 9.1. The security forces mark went from 9.7 to 9.5 because it exerted more control over the country. Factionalized elites stayed at 9.6. That problem is seen in the current inability of political parties to form a government four months after parliamentary elections. Finally external intervention improved from 10.0 to 9.5 as U.S. troops are drawing down. Neighboring countries are still interfering in Iraqi affairs however.

The Iraqi state has gone through a series of changes since 2003. Immediately after the U.S. invasion, it imploded and ceased to exist. During the sectarian war Iraq became a failed state with different factions all taking up arms against each other. After 2007 however the security situation completely changed as the strength of the insurgency and militias was largely broken up, and the government was able to reassert control over most of the country. That has helped improve other parts of the society. There are still huge economic and political problems, a massive displaced and refugee population, and rampant corruption. That being said, the Fund For Peace has consistently been pessimistic about Iraq, and given it a lower score than it deserves. It seems that old images die hard, and the Fund is not convinced that these changes will last.

SOURCES

Foreign Policy, “The Failed States Index 2010,” July 2010

Fund For Peace/Foreign Policy, “Failed States Index Scores 2010,” July 2010

Mosul Dam Sign Of Iraq’s Hydroelectric Problems

A member of the Iraqi Electricity Ministry told the Azzaman paper that the Mosul Dam, the largest in the country and the fourth biggest in the Middle East, was suffering from a lack of water and maintenance. The official said that the dam use to hold 11 billion cubic meters of water, but was now down to only 40% of that. As a result its hydroelectric power plant was producing less than 100 megawatts, down from 320 megawatts. There is also a lack of maintenance at the dam, and a severe need to repair its foundations. The Mosul Dam is on the Tigris River, which originates in Turkey. Since 2007 Iraq has been suffering a massive drought, and its neighbors like Turkey have been building dams along the Tigris and Euphrates Rivers, drastically reducing the water flow into Iraq. As a result, in June 2010 the Ministry of Planning announced that it might have to shut down its hydroelectric power plants. It did say that it has no plans to build anymore of those types of plants in the future because of the country’s water problems.

SOURCES

Chulov, Martin, “Iraq: Water, Water Nowhere,” World Policy Journal, Winter 2009/2010

Saleh, Khayoun, “Iraq’s largest dam loses 60% of its water reserves,” Azzaman, 7/24/10
- “Lack of water likely to force Iraq to shut down thermal and hydro power plants,” Azzaman, 6/8/10

Have Iran’s Summer Attacks Upon American Forces In Iraq Begun?

On July 13, 2010 the commander of U.S. forces in Iraq General Ray Odierno warned about a short-term threat to American forces as they withdraw from Iranian backed Special Groups. He said that Iran and the Shiite militants had always claimed that they were the reason why the Americans were going to leave Iraq, and they wanted to drive that point home by attacking U.S. troops this summer. It appears that those strikes have begun.

There have been a number of attacks in southern Iraq and Baghdad that are the likely work of Special Groups. The first was an explosively formed projectile (EFP) attack on American security contractors in Basra on July 15 that left no injuries. Two days later rockets hit the Green Zone in Baghdad, again with no casualties. On July 19 an improvised explosive device went off in Basra. On July 21 four missiles hit a U.S. base in Kut, Wasit province. The 23rd saw 3 U.S. soldiers wounded in another rocket attack upon a U.S. base in Nasiriyah, the provincial capitol of Dhi Qar. The camp is the center of U.S. operations for southern Iraq. On the 24th more rockets hit Camp Echo in Diwaniya, Qadiisyah governorate. That same day three men were arrested for the Kut attack. Finally, on July 27 three rockets were fired at Basra International Airport where the U.S. has a base.

These attacks have been very small, the casualties low, and the damage minimal. Basically, they are symbolic to let the United States know that Iran and their Special Groups are still around, while the Americans leave. As General Odierno noted, these operations do not represent a threat to the Iraqi government, and are likely only to happen for a short-period as Iran is more concerned about its political influence in Baghdad than the dwindling American presence.

SOURCES

Aswat al-Iraq, “3 U.S. soldiers wounded in rocket attack on Nasseriya base,” 7/23/10
- “3 wanted men captured for firing rockets on U.S. base in Kut,” 7/24/10
- “4 rockets hit Delta Base in Wassit,” 7/21/10
- “U.S. camp in Diwaniya comes under rocket attack,” 7/24/10

Olive Group, “Weekly Security Update,” Iraq Business News, 7/22/10

Iraq Revises Down Its June Oil Production And Profits

At the beginning of July 2010 the Iraqi Oil Ministry claimed that its June petroleum output was exactly the same as May. On July 26 however, the Ministry revised down all of its numbers. The government now says that it exported an average of 1.82 million barrels a day in June 2010 compared to 1.9 million barrels a day in May. Originally, the Ministry claimed production had stayed constant at 1.9 million barrels a day across those two months. Overall production dipped four million barrels from 58.7 million in May to 54.7 million in June. The price of a barrel of Iraqi crude has also been taking a hit since reaching a high of $79.66 in April 2010. In May that went down to $73.85, and then to $71.10 per barrel in June. The drop in both exports and price marked the first decline in Iraq’s revenue since the beginning of the year, which has fluctuated between $4.2 billion and $4.4 billion per month. In June the government only brought in $3.889 billion.

The rather steady oil supply and high prices have been a boon for the budget. It was based upon a $62.50 a barrel price, and had a projected deficit of $19.5 billion. Instead Iraq now has around a $10 billion surplus. The Oil Ministry predicts that its output will remain relatively stable for the next few months, as it is currently at capacity.


Monthly Earnings/Prices/Production

Month	Total Oil Earnings	Price Per Barrel	Total Oil Production
Jan. 10	$4.4 bil	$73.97	59.7 mil bar
Feb.	$4.2 bil	$73.40	57.9 mil bar
Mar.	$4.3 bil	$76.20	57.1 mil bar
Apr.	$4.2 bil	$79.66	53 mil bar
May	$4.3 bil	$73.85	58.7 mil bar
Jun.	$3.8 bil	$71.10	54.7 mil bar

SOURCES

AK News, “No substantial change in oil exportation in August,” 7/15/10

Aswat al-Iraq, “Iraq’s oil exports down 4m barrels in June,” 7/26/10

Bayoumy, Yara, “Iraq eyes fall in deficit, investment increase,” Reuters, 6/10/10

Hafidh, Hassan, “Iraq June Oil Exports -4% On Month At 1.823 Million Bbl – Ministry,” Dow Jones, 7/26/10

Iraq Business News, “Iraq’s Oil Exports Hit 1.9m bpd,” 7/8/10

Al Jazeera, “Warnings of a budget deficit in Iraq,” 5/27/10

2002 British Memo Said Iraq Not A Threat To The West

Former MI5 Chief Eliza Manningham-Buller recently testified to the Chilcot Inquiry about her belief that Saddam was not a threat

On July 20, 2010 the former head of England’s domestic intelligence service the MI5, Eliza Manningham-Buller, testified to the Chilcot Inquiry that is looking into the decision to invade Iraq. As part of her appearance the Inquiry declassified a March 22, 2002 memo that she wrote to John Gieve, the permanent secretary at the Home Office that detailed her beliefs that Iraq was not a threat at that time.

Manningham-Buller wrote that Iraq was not involved in any recent terrorism against the West or tied to Al Qaeda. MI5 had not found any evidence connecting Iraq to anti-Western terrorist activity since it planned to attack ex-President Bush in Kuwait in 1993. There was also no evidence that it had a role in 9/11. While there were reports that Baghdad and Al Qaeda had met and discussed weapons of mass destruction (WMD), there was no convincing intelligence that the two had decided to cooperate or that Baghdad had provided the Islamists with WMD.

The MI5 chief went on to say that Iraq was unlikely to use WMD unless Saddam felt that he would be deposed. The last time Baghdad had resorted to large-scale deployment of WMD was against the Kurds in 1998. Since then it had only used them for assassinations against Iraqi dissidents and exiles. There was no evidence that it was planning on using WMD for mass casualty attacks, or that it was even considering terrorism. Manningham-Buller felt that increased tensions with the U.S. and England or even a limited strike against Iraq using cruise missiles would not lead Saddam to use chemical or biological weapons. She felt that only if Saddam’s rule was threatened would he use WMD, and then deploy them in conventional weapons and strike neighboring countries as he did during the Gulf War. The intelligence head went on to warn that as rhetoric heated up between Washington, London, and Baghdad, there would be increased stories of Iraq planning on using WMD or terrorism, as this happened in the 1990s.

The 2002 MI5 memo reflected the general consensus of British intelligence at that time, as well as the foreign service. A March 8, 2002 options paper by the Overseas and Defense Secretariat said that while Iraq was a destabilizing force in the Middle East it was no larger a threat than it had been before, and its WMD programs were continuing but limited. It also found no evidence that Iraq was involved in any recent acts of terrorism, and that meant there was no legal basis for war based upon self-defense or combating terrorism. A March 25, 2002 letter by England’s Foreign Secretary Jack Straw to Prime Minister Tony Blair said much of the same thing about how Iraq was not an imminent threat, and added that Iraq was not connected to either Al Qaeda or 9/11. Finally, in October 2002 British intelligence officials told the Guardian newspaper that they believed that the United States was using unsubstantiated claims to tie Iraq to Al Qaeda. 

What these reports show is that Tony Blair’s decision to invade Iraq closely followed President Bush’s. Both felt that Saddam Hussein was a nagging threat since the Gulf War, and 9/11 provided them the opportunity to take care of that unfinished business. As Michael Mazarr of the U.S. Naval War College wrote in an article for Foreign Policy Analysis in 2007, policy makers fell back on what they knew, Iraq, rather than what they didn’t, Al Qaeda, after the September 11 attack. It was the beliefs of Blair and Bush that led to war, not what intelligence agencies had to say about Iraq’s connections to Al Qaeda, terrorists, or whether it was going to provide them with WMD.

SOURCES

Manningham-Buller, E.L., “IRAQ: POSSIBLE TERRORIST RESPONSE TO A US ATTACK,” MI5, 3/22/02

Mazarr, Michael, “The Iraq War and Agenda Setting,” Foreign Policy Analysis, January 2007

Norton-Taylor, Richard, “Iraq inquiry: Eliza Manningham-Buller’s devastating testimony,” Guardian, 7/20/10
- “UK spies reject al-Qaida link,” Guardian, 10/10/02

Overseas and Defense Secretariat, “Iraq: Options Paper,” 3/8/02

Straw, Jack, “Crawford/Iraq,” Foreign and Commonwealth Office, 3/25/02

Fighting Insurgents Isn’t The Same As Countering Terrorists, Lessons Learned From Iraq

The 2007 Surge was a sea change in U.S. military policy in Iraq. The Americans went from hunting down insurgents to trying to win over the hearts and minds of the local population. Many of those lessons and tactics are now being implemented in Afghanistan. Three researchers, Eli Berman, Joseph Felter, and Jacob Shapiro, recently looked into one part of this strategy, whether economic development limits militancy.

The researchers began with spending by U.S. forces on local reconstruction projects and violence in Iraq, and found a correlation. The $3.1 billion Commander’s Emergency Response Program (CERP) appeared to reduce violence, most of which happened during the Surge in 2007. Before that period however, CERP didn’t have as much affect. The authors believed that was because the American military wasn’t as focused upon the areas they spent the money in as they were during the Surge. 

The study then looked at the rest of America’s reconstruction work in Iraq. Most of that was spent on large projects, and used private contractors. That didn’t seem to affect violence at all.

A comparison between those two types of spending found that the more local the emphasis, the more effect it had upon violence. The best reconstruction practices were ones that included small projects, good relationships with civilians and officials who were consulted about programs, used local contractors, and was coordinated.

The study also considered whether job creation had an affect upon insurgencies. One theory of counterinsurgency is that providing employment will draw fighters away from militant groups. The assumption is that high unemployment/underemployment provides a pool of men to be recruited by insurgents. The report looked at job rates in Iraq, Afghanistan, and the southern Philippines, and found no real connection. In fact, it found the exact opposite, that when more jobs were provided violence actually increased. Their explanation was that government counterinsurgency programs might promote local employment, but that fighting disrupted the overall economy more so that there was not a real change in the military situation. People might get jobs cleaning up streets, picking up trash, or manning a checkpoint for example, but their pay was probably still low, and the business environment was bad due to instability. 

Another assumption is that development can help prevent terrorism. Studies have shown that many terrorists and their leaders are not poor however. Terrorists also don’t operate like insurgents who depend upon local support and look to hold territory. Terrorists in fact, can operate in areas where they are unpopular. Promoting the economy then isn’t really effective against these groups. What the report found to be of more impact was the quality of governance. Countries that lacked services, were corrupt, and had unpopular leaders were more likely to breed terrorists.

Berman, Joseph and Shapiro’s study came to some surprising conclusions. First, the more local the development spending, the better chance there is to counter insurgencies. Large-scale projects and simply focusing upon jobs however had little impact. The former is a top-down approach that doesn’t create any closer loyalties between the citizens and their government that would make them turn against militants, while the latter doesn’t impact the overall economic situation in the country, which is usually poor due to fighting. Second, counterinsurgency and counterterrorism differ. Fighting insurgencies requires winning hearts and minds and controlling territory. Terrorists on the other hand, don’t depend upon holding any area, and are usually prevalent in countries where the government is considered corrupt and illegitimate. That has important consequences for U.S. policy. It’s much easier to come up with local projects and create community security forces than it is to reform an entire government. That can be seen in the current situation in Iraq. The insurgency has lost most of its popular base, but it still continues because Baghdad is dysfunctional, and militants still consider it a tool of the Americans. That has implications in Afghanistan and Pakistan as well. In the former, the U.S. can probably reduce the insurgency, but not so in the latter because it doesn’t have as much freedom of operation. In both cases, the governments are also unlikely to change, so that terrorism will continue to have an environment to thrive in.

SOURCES

Berman, Eli, Felter, Joseph, and Shapiro, Jacob, “Constructive COIN,” Foreign Affairs, 6/1/10

Four Islamic State Of Iraq Members Escape From Prison

On July 15, 2010 the United States military passed over control of the last prison it operated, Camp Cropper, to the Iraqi government. The facility holds 1,500 prisoners, and is attached to the Baghdad international airport. At the handover ceremonies, U.S. General Jerry Cannon stated that he believed the Iraqis were up to the task of running the prison. Just five days later, four members of Al Qaeda in Iraq's umbrella organization the Islamic State of Iraq disappeared from the newly named Karkh Prison.

The Islamic State of Iraq escapees included its Minister of Justice, Minister of Finance, a judge, and another whose position is unknown. All four were captured by American forces in Mosul in 2008, and been held for 15 months. Also conspicuously absent from work the next day were the camp’s warden and several guards. Some Iraqi sources told the Los Angeles Times that they were investigating whether the warden drove the Islamic State prisoners out of the camp in his car. The warden was appointed by the U.S., and kept on the job after the prison was turned over to the Iraqis.

Karkh Prison is located in a heavily guarded area of Baghdad with dozens of checkpoints, and is the site of the U.S. military command in Iraq. The story was kept secret by Iraqi authorities for two days before finally being aired on television.

The escapes are an obvious embarrassment to the Iraqi government and a setback in the fight against Al Qaeda. In the beginning of June 2010 the commander of U.S. forces in Iraq General Ray Odierno claimed that 34 of Al Qaeda’s top 42 leaders had been killed or captured, marking a devastating blow to the organization. Every week there are more stories of Al Qaeda elements being rounded up. Now four top members have escaped. That also points to the insurgency’s ability to infiltrate the government and security forces because the missing prisoners obviously had inside help to get out of such a heavily guarded area of the capitol. In June, over 30 policemen, including an officer, were arrested in Diyala for ties to Al Qaeda. There is also suspicion that Al Qaeda worked with members of the government to attack the Central Bank of Iraq last month as well. While the Islamist group is obviously a shell of its former self, these operations and escapes point to its continued ability to not only operate in Iraq, but to curry favor with some in positions of authority.

SOURCES

Agence France Presse, “Escaped Iraq detainees are Qaeda suspects: police,” 7/23/10

Parker, Ned, “U.S. Hands over last prison to Iraqi control,” Los Angeles Times, 7/15/10

Parker, Ned and Redha, Usama, “Four Iraqis escape from prison at Baghdad airport compound,” Los Angeles Times, 7/23/10

Shanker, Thom, “Qaeda Leaders in Iraq Neutralized, U.S. Says,” New York Times, 6/4/10

Williams, Timothy and Al-Jawoshy, Omar, “Top Insurgents Escaped Prison Days After Iraq Took Over,” New York Times, 7/23/10

Kurds Continue With Their Oil Smuggling To Iran

Since the New York Times ran an article on July 8, 2010 about Kurds smuggling oil to Iran, the Kurdistan Regional Government (KRG) has been trying to explain away their activities. In the Times piece KRG Natural Resource Minister Ashti Hawrami admitted that the regional government was sending refined oil products like fuel to Iran. Afterward, the KRG officially denied any illegal sales, and promised to crackdown on any smuggling. They claimed that if any oil was being sent to Iran it was the work of gangs. Later, on July 20, a KRG spokesman said that they respected the Iraqi constitution and international law and would end all illegal oil exports. He went on to say that Kurdistan would only allow legal exports of oil using the official pipelines and that they would cooperate with the central government. A committee was also supposed to be formed to review the oil industry in the region.

Despite these statements, the smuggling in Kurdistan is continuing. Reuters went to an official border crossing in the KRG at Haj Umran and found dozens and dozens of tanker trucks lined up to cross over into Iran. The drivers said that they worked for an Irbil based shipping company that had official contracts from the Natural Resource Ministry to send refined oil products like diesel to Iran. They got official documents from the Ministry, loaded up at one of Kurdistan’s three refineries, and then headed for the Iran-Iraq border. They said that they would usually go to Bandar Imam or Bandar Abbas ports in Iran, while some drove all the way to Afghanistan. The man in charge of the border crossing and the mayor of Haj Umran both said that everything was legal because the tankers were only carrying refined products. In all the statements by the KRG officials about stopping smuggling and following Iraqi laws they only mentioned crude oil. Nothing was said about refined products, so they are using that as a loophole.

The KRG’s activities are causing tension not only with Baghdad, but with the United States and other Kurdish politicians as well. The central government claims that all exports of crude and refined products are under their jurisdiction. The Oil Ministry has called for the Kurds to send a delegation to discuss the matter, but they have not responded saying that the government’s authority expired after the 2010 elections. The KRG has also blamed Baghdad’s subsidies of refined oil products for the smuggling since the products can be sold for a tidy profit in foreign countries where prices are much higher. In July 2010 the U.S. passed new sanctions on Iran for its nuclear program. The U.S. Ambassador to Iraq Christopher Hill said that the country needs to consider its long-term goals when considering its deals with Iran because they could affect relations with America. The Congressional Research Service’s Middle East expert however thought that ultimately Washington would do nothing about the Kurds because they want to support Iraq. Finally, a member of the KRG parliament’s energy committee said that the shipments to Iran smacked of corruption because no one knew where the profits went to. The KRG Natural Resource Minister told the New York Times that the revenue was first used to pay the two foreign companies that were producing oil in the region, while the leftover funds were placed in a bank account whose future was to be discussed with Baghdad sometime in the future. Others said that the profits were going directly to the two ruling parties in the KRG, the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK). Some have said that the KRG’s Prime Minister Barham Saleh wants to legalize the trade with Iran, but is opposed by the Natural Resource Minister.

In the end, the KRG will continue their smuggling to Iran. It provides a tidy, off the books profit for the KDP and PUK. It also allows them to assert their autonomy from the central government, even if it is illegal. Finally there is no one that can stop them. Baghdad has no presence along the Iran-Iraq border in Kurdistan, the United States is unlikely to pressure the Kurds about it, and the KDP and PUK have the last say in Kurdistan, not the parliament or even the regional prime minister. Not only that but the Kurds have been smuggling oil to Iran since the 1990s so there’s no reason to stop now.

SOURCES

AK News, “Kurdistan Government denies any breach of international law over exported out to Iran,” 7/21/10

Dagher, Sam, “Smugglers in Iraq Blunt Sanctions Against Tehran,” New York Times, 7/8/10

Reuters, “Despite pledges, Iraqi Kurd oil still flows to Iran,” 7/22/10
- “Iraq Kurds say to crack down on fuel smuggling,” 7/11/10

El-Tablawy, Tarek and Barzanji, Yahya, “Oil smuggling to Iran embarrassment for Iraq,” Associated Press, 7/13/10

Van Heuvelen, Ben and Lando, Ben, “Iraqi oil and gas moves could violate U.S. sanctions on Iran,” Iraq Oil Report, 7/16/10

Iraq Waits For A New Government

From London's Al-Sharq Al-Awsat

New Iranian Ambassador To Iraq Due To Arrive In Baghdad Soon

Iran’s new ambassador to Iraq Hassan Danafar is due to arrive in Baghdad on July 24, 2010. He will replace Hassan Kazemi-Qomi. Both are members of the Iranian Revolutionary Guard. 

Danafar joined the Revolutionary Guards in the 1980s. He was originally born in Baghdad in 1962, but was deported by the government for his Iranian heritage during the Iran-Iraq War. He then went to fight for Iran, joining the Supreme Islamic Iraqi Council’s Badr Brigade, which was an official arm of the Iranian Revolutionary Guards. Danafar then joined the Guards’ Qods Force, which is responsible for running its foreign operations. He eventually became the deputy commander of the Revolutionary Guards’ Navy. Before being named the new ambassador to Iraq, he was the chairman of Iran’s Headquarters for Renovation of Iraq’s Holy Shrines. He’s said to have close ties to many of Iraq’s politicians, which will help him in his new position.

Danafar’s first duty in Iraq is to pressure the country’s main Shiite parties to form a government. As reported before, Tehran has already replaced its point man for Iraq, Qods Force commander General Qassim Suleimani with the speaker of the Iranian parliament Ali Larijani, because the general could not get Iraq’s Shiite parties to work together. Iran already helped put together the Iraqi National Alliance before the March 2010 vote, which included the Supreme Council, the Sadrists, the Fadhila Party, former Prime Minister Ibrahim al-Jaafari’s Renewal Party, and the Iraqi National Congress. Afterward Iran pushed for Prime Minister Nouri al-Maliki’s State of Law to merge with the National Alliance. Those two have been unable to agree upon anything because Maliki insists that he remain prime minister, which the National Alliance opposes. Tehran’s main goal in Iraq is to have a friendly Shiite led government in Baghdad that will not be a rival. Danafar will have his work cut out for him as Iraq’s politicians are caught up in their own personal rivalries and internal politics right now, which lessons Iran’s influence.

SOURCES

Aswat al-Iraq, “Iran’s presence in Iraq relies on NC’s existence – Shiite source,” 7/17/10

Felter, Joseph and Fishman, Brian, “Iranian Strategy in Iraq, Politics and ‘Other Means,’” Combating Terrorism Center at West Point, 10/13/08

Al-Rafidayn, “New Iranian Ambassador To Iraq Hostile to Kurds, Friend of Al-Maliki,” MEMRI Blog, 7/22/10

Visser, Reidar, “After Sadr-Badr Compromise in Tehran, the Iraqi National Alliance (INA) Is Declared,” Historiae.org, 8/24/09

Fallujah’s Wastewater Plant: Symbol Of America’s Failed Reconstruction Effort

The city of Fallujah in Anbar province was an early insurgent stronghold in the Iraq war. In 2004 the United States launched two offensives there as a result that devastated most of the area. Afterward the Americans promised a new sewage system to try to win over the population, which was supposed to be the centerpiece of U.S. reconstruction in the entire governorate. Violence, changes in design, and bad contractors all delayed the project, led to huge cost overruns, and forced the completion date to be continuously pushed back. Today it stands as an example of the failed effort to rebuild Iraq.

What was supposed to be a model-rebuilding project in Fallujah quickly turned into a symbol of everything wrong with the American effort. The wastewater plant was supposed to cost $35 million, and be finished in 18 months. Lack of security and poor work by contractors however, continuously pushed back the completion date and drove up the price tag, which currently stands at $104 million. The U.S. is not even going to be able to finish all the work, and instead will hand it over to Iraqis soon to complete. The Americans will pay for that as well because Baghdad said it couldn’t.

So far no houses are connected to the plant, and the city does not have a working sewage system. Waste goes into the streets and leaks into the drinking water as a result. The director of the city’s general hospital said that diarrhea, tuberculosis, typhoid, and communicable diseases are all affecting the population because Fallujah lacks proper sanitation.

Even when the plant is completed it will not fulfill all of its original goals. It was supposed to serve all the residents in Fallujah, but will only cover about 1/6 of the population. That’s because the facility will only operate at partial capacity, and the main pipeline for waste had to be abandoned because of a lack of money. When it is up and running, engineers are afraid that it will emit a foul odor. The Iraqi government hasn’t even agreed to provide the fuel and chemicals to run the plant, so it may have to pay for its own generators, fuel, and supplies. The U.S. also wont be able to complete the training for the Iraqi staff. All of those factors put into question whether the sewage plant will be able to run and be maintained after it’s done.

When the U.S. overthrew Saddam Hussein, President Bush promised to rebuild Iraq’s economy and infrastructure. The Special Inspector General For Iraq Reconstruction has determined that failed. The wastewater plant in Fallujah was a perfect example. It will not finish in time, will be far over budget, and won’t even serve most of the population it was supposed to. A U.S. colonel in Anbar noted that the plan was too ambitious to begin with, especially for a war zone, and the Inspector General said that doomed most of the large projects that the Americans embarked on. The U.S. and Iraq would’ve been much better served by smaller projects that the locals actually asked for and were involved in the planning and building. Instead, the Americans endeavored to build huge facilities that the Iraqis sometimes didn’t want, and had no capacity to pay for or maintain. That puts in jeopardy the future of Fallujah’s wastewater plant that may go down as a massive waste of time and money.

SOURCES

Bowen, Stuart, “Effective Counterinsurgency: How the Use and Misuse of Reconstruction Funding Affects the War Effort in Iraq and Afghanistan,” Committee on Armed Services, United States House of Representatives, 3/25/09

Glanz, James, “Report Finds Iraq Water Treatment Project to Be Late, Faulty and Over Budget,” New York Times, 10/27/08

IRIN, “IRAQ: Seeping sewage hits Fallujah residents’ health,” 7/14/10

Special Inspector General for Iraq Reconstruction, “Hard Lessons,” 1/22/09
- “Quarterly Report to the United States Congress,” 4/30/10

Williams, Timothy, “U.S. Rushes to Complete Only Some Iraq Projects,” New York Times, 7/3/10

U.S. Diplomatic Presence Due To Wind Down In Iraq Within 5 Years

U.S. troops are due to draw down to 50,000 by the end of August 2010 before completely leaving at the end of 2011. The incoming ambassador to Iraq James Jeffrey told the Senate Foreign Relations Committee during his confirmation hearing that America’s diplomatic presence would also be winding down in Iraq in the next five years. The U.S. currently has a series of branch embassy offices throughout Iraq that would be closed down by 2014. The State Department is also due to take over the police training program in Iraq from the military, and that too will come to end in 3-5 years. The 16 Provincial Reconstruction Teams (PRTs) would also be consolidated into three offices and two consulates, before being phased out as well. After five years then, the U.S. diplomatic presence in Iraq would consist of the American embassy in Baghdad, an office in charge of military sales, and a consulate in southern Iraq and one in the north based upon the PRTs. James Jeffrey is currently the ambassador to Turkey, but is due to replace Christopher Hill as the American representative to Iraq.

Jeffrey was outlining the State Department’s plan to treat Iraq more like other countries in the future. Instead of having a large military force present, and the U.S. Iraq command being on equal terms with the U.S. embassy, the State Department will take over primary relations with Baghdad, although everyone expects at least a large training mission and military bases to remain in Iraq after 2011 since their security forces will not be capable of defending the country from external threats. This is a controversial policy with both the U.S. military and Iraqi politicians. Iraqi officials told the Los Angeles Times for example, that their country can not be treated like a regular country because it has too many problems. This is a view shared by some in the American military who are worried that the State Department will have too much of a hands off approach with Iraq’s weak and divided political class who tend to use brinkmanship when any major issue arises. Iraqi and U.S. military officials, as well as some think tanks, believe that this all comes down to the Obama administration’s focus upon withdrawing troops at the expense of creating a long-term relationship with Iraq. Administration officials have countered by saying that it is time for the Iraqis to take the lead securing and governing their own country, that maintaining a large U.S. presence could undermine the legitimacy of Baghdad, and that it is simply not politically viable anymore to maintain a large force in Iraq due to America’s domestic concerns. Since President Obama has the final say and believes in this policy, Iraqis and Americans are going to have to adapt to this new situation in the coming years.

SOURCES

Burns, Robert, “US envoy: Diplomatic presence in Iraq to shrink,” Associated Press, 7/20/10

Hanna, Michael Wahid, “Stay the Course of Withdrawal,” Foreign Affairs, 4/4/10

Londono, Ernesto and DeYoung, Karen, “U.S. grapples with shift from military- to diplomatic-run effort in Iraq,” Washington Post, 5/25/10

Parker, Ned, “Iraqi officials see U.S. as neglecting the country,” Los Angeles Times, 6/25/10

Oil Companies Voice Their Concerns About Doing Business In Iraq

On July 18 and 19, 2010 Iraq’s Oil Ministry held a conference in Baghdad with the 16 oil companies that won 11 contracts in 2009. British Petroleum, Exxon Mobile, Royal Dutch Shell, Italy’s ENI, China’s CNPC, and others were all in attendance. The point of the meeting was for energy executives and Iraqi officials to go over the details of their deals, which Iraq is hoping will boost oil production from around 2.4 million barrels a day currently to 12 million barrels in six years. The corporations named a number of problems that they faced, which all foreign companies are dealing with in Iraq: lack of infrastructure, security, bureaucracy, etc. The energy giants came away with mixed feelings about whether any of them would be addressed by the government.

One thing the executives complained about was the delays due to the bureaucracy. Companies could not get their people into Iraq because of visa problems. The Oil Minister Hussain Shahristani said that a new process would start where visas could be issued at the airports for all oil workers and businesspeople, but the companies said that was already happening, and it still took 6-7 hours to get through the Basra airport. Two other problems were that many had not set up offices in Iraq yet because of red tape that held up licenses and permits, and the inconsistent application of customs where they had to be paid sometimes, and other times not. Those both pointed to the contradictory regulations in place and the lack of cooperation between Iraq’s ministries, which slowed down the companies even beginning their work in the country.

The facilities and protection at Um Qasr, Iraq’s main port in Basra, was brought up. Um Qasr doesn’t have the capacity to handle all of its shipping traffic. The government has plans to expand it, but that is years away. In the meantime, Baghdad has asked Kuwait to open a special border crossing just for the oil businesses. Kuwait has okayed the plan, but has not given a date for when it will be finalized. Security at the port was also raised as millions of dollars worth of equipment needs to be stored there until it is sent to the oil fields. Basra is a major smuggling point in the Middle East, so some businesses are afraid that their goods could go missing.

Other infrastructure and supply issues discussed were the lack of storage facilities, pipelines, gas equipment, and water. Iraq is currently suffering the third year of drought, its neighbors Iran, Syria, and Turkey have built a series of dams severely restricting the flow down Iraq’s rivers, and the country’s water system has been neglected, is inefficient, and full of leaks. Water is necessary to create pressure during the oil extraction process. The country’s oil infrastructure has been in steady decline since 1990 when United Nations sanctions were imposed for Iraq’s invasion of Kuwait. Equipment is old, aging, breaking down, and currently lacks the capacity to handle any increase. The oil companies and government will have to work together to invest millions of dollars to repair and expand the infrastructure, and water will have to be imported as well.

Finally, central and southern Iraq has millions of land mines and unexploded ordinance left over from the Iran-Iraq War and Gulf War that need to be removed and destroyed so that the oil companies can work safely. The Oil and Environmental Ministries have created a joint committee to remove these explosives, but they have just started their work, one year after the first oil deal was awarded. A non-government organization involved in mine clearing said that there are 25 million mines alone in Iraq, and that the government’s effort would not be enough. This could cause a major delay, and threaten the deadlines the corporations have to meet. 

Press reports on the conference mentioned mixed feelings by the oil companies. Some thought that it was good that these issues were raised, while others complained that there were no concrete solutions presented. Many were also worried what a new Iraqi government might do. They could void any agreements that came out of the meeting, and more importantly might delay, change or end the contracts signed in 2009. For those reasons, a few executives warned that not all of these oil deals would be successful because there are so many barriers that need to be overcome. If Iraq were to reach the 12 million barrels a day mark that it has set for itself in six years, it would be the greatest petroleum expansion in history. It’s that potential that keeps oil corporations excited about Iraq, and willing to deal with all the delays and problems that it poses.

SOURCES

Chulov, Martin, “Iraq: Water, Water Nowhere,” World Policy Journal, Winter 2009/2010

El Gamal, Rania, “Baghdad oil talks do little to ease firms’ concerns,” Reuters, 7/21/10

Lando, Ben, “IOCs and ministries air concerns in long haul to 12.5 M bpd,” Iraq Oil Report, 7/21/10

Radio Free Europe/Radio Liberty, “Iraqi Oil-Industry Development Hampered By Mines, Bombs,” 7/21/10

Sabean Mandeans Celebrate Their New Year In Iraq

July 19, 2010 was the Sabean Mandean new year. Followers of the ancient religion gathered in the Tigris river in Baghdad for the beginning of their festivities by cleansing themselves in the water. Sabeans were upset at how few attended. In the 1980s there were over 100,000 in Iraq. By 2003 there were only 35,000 left. Today there are only 3,500-5,000 in the country. Of the 28 religious leaders that were in the country during Saddam’s time, only five are left. Many have been killed by insurgents and militias who consider them apostates. More have fled the country including their top leader Sheikh Sattar Jabbar al-Hulu who now resides in Australia. The situation has grown so bad that Sabeans have asked that their entire community be relocated to another country for their safety. 

Sabeans originated in southern Iraq around the 2nd century A.D. They are followers of John the Baptist, and some think they started as a breakaway sect from Judaism. They speak their own language that is a derivative of Aramaic, which is an ancient Semitic one that early Jews spoke. A person can only be born into the religion, and they are also pacifists, which has complicated their plight in Iraq since they can’t fight back, and are finding it harder and harder to procreate since so many have either left or been killed in Iraq. Some fear that they will cease to exist in the country.

SOURCES

Agence France Presse, “Iraq’s last Sabeans take sad New Year dip in Tigris,” 7/20/10

United States Commission on International Religious Freedom, “Annual Report of the United States Commission on International Religious Freedom,” May 2010
- “Iraq Report – 2008,” December 2008

Poverty Rate Unchanged In Iraq

The United Nations Trust Fund and the Iraqi Planning Ministry recently issued a report that found that poverty in Iraq had remained constant in the last couple years. In the latest survey 22.9% of the population, roughly 7 million people, were found to be living in poverty. That was unchanged from a 2008 survey on the topic by the government’s Central Organization for Statistics and Information Technology that covered 2006-2007. The poverty level was set at 77,000 dinars per capita, or $67 per month.  39.3% of the poor lived in rural areas, compared to 16.1% in urban ones.

The United Nations found that those most likely to fall into poverty were households that did not work in the public sector. The U.N. reported that the average per capita income for a home with one government worker and no other employees was 14% higher than a family with just one member in the non-public sector. The International Monetary Fund (IMF) claimed that 30% of households got their income from government jobs in 2006-2007. Another 15% earned their money from government pensions.

The IMF also said that while poverty was widespread in Iraq, it was also shallow. Many Iraqis are vulnerable to fall into poverty, but the gap between the average income in the country and the poverty level was very small. That meant a small increase in income could lift many out of danger.

Iraq’s 2010 budget is attempting to address the problem, but it’s unlikely to work. The government wants to increase personal income, provide jobs, and housing for the poor this fiscal year. They plan to achieve that by attracting private investment, increasing trade, oil sales, and promoting the private sector. By doing that they hope to reduce poverty to 14% by 2014. The only part of that plan that’s likely to happen is boosting oil production and exports as Baghdad has signed several new contracts with international energy companies. As for the rest, Iraq’s laws and business environment currently discourage investment, and the government has no real plans on how they’re going to make the business sector grow in the country. A member of the Justice Ministry also told the press that officials were siphoning money off from the anti-poverty campaign. As with almost everything in the country, corruption is always a threat to undermine progress in Iraq.

There is good news and bad news about Iraq’s poverty rate. First, it has not increased for the past several years. On the other hand, it does not look to improve either as the government’s anti-poverty campaign is bound to fail. That will mean nearly a quarter of Iraq’s population will continue to live off of $2 a day, with little hope to improve their lot. Until the government can function better and private business increases in Iraq there will probably be no relief for these millions of people.

SOURCES

AK News, “Corruption led to poverty in Iraq,” 3/28/10
- “Iraq fights poverty with new plan,” 4/10/10

Aswat al-Iraq, “COSIT: Unemployment, poverty drop in Iraq,” 12/13/09
- “Poverty in Iraq in 2007 at 23% - COSIT,” 5/19/09

Inter-Agency Information and Analysis Unit, “Iraq Labour Force Analysis 2003-2008,” United Nations Office for the Coordination of Humanitarian Affairs, January 2009

International Monetary Fund, “Staff Report for the 2009 Article IV Consultation and Request for Stand-By Arrangement,” 2/16/10

IRIN, “IRAQ: Over 20 percent of Iraqis live below the poverty line,” 5/24/09

Radio Nawa, “United Nations: Iraq will be a “demographic gift” This year,” 7/12/10

How Long Can Al Qaeda In Iraq Last?

Abu Omar Baghdadi (L) and Abu Masri (R) Al Qaeda In Iraq’s Top Two Leaders Were Reported Killed In April 2010 Yet Their Organization Continues On

Every week brings more news of Al Qaeda in Iraq’s demise. Leaders are rounded up, fighters are killed, etc. Most recently Jabbar Zeidan who was in charge of Al Qaeda’s network in northern Baghdad and Zaid Hamed Ali, the group’s number 2 man in Diyala were both arrested. That’s a sign that the group has lost most of its popular support, and Iraqis, even Al Qaeda members, are willing to turn them in. Despite those losses however, the organization has shown great staying power. In June 2010 Paris-based researcher Myriam Benraad wrote a piece for West Point’s CTC Sentinel on why Al Qaeda in Iraq remains a threat to the country. The article was divided into three parts. The first dealt with Al Qaeda’s recent history, the next covered why the Islamists are still able to gain new recruits, and the final section made some suggestions for how the group may finally be defeated.

Since 2006 Al Qaeda in Iraq and its umbrella organization the Islamic State of Iraq have faced a steady diet of defeats. In June 2006 it lost its first leader, the Jordanian Abu Musab al-Zarqawi. In 2007 the Surge and the Sons of Iraq program deprived Al Qaeda of most its bases. By 2010 the head of Al Qaeda in Iraq the Egyptian Abu Masri, and the emir of the Islamic State Abu Omar Baghdadi were killed in Salahaddin. Afterward the U.S. commander in Iraq General Ray Odierno claimed that 90% of the group’s leadership had been killed or captured. These operations show the increased abilities of the American and Iraqi forces, and their understanding of the militants.

Despite these setbacks Benraad believes that Al Qaeda in Iraq will still be around for the foreseeable future. One reason is that the group is largely Iraqi now. At first, it was mostly made up of and led by foreigners like Zarqawi and Masri. Today it is almost all locals.  Another factor is that in June 2009 U.S. forces withdrew from Iraq’s cities. That gave more room for the Islamists to operate in. The Americans are due to drawdown to just 50,000 troops by August 31, 2010 as well, which could increase Al Qaeda’s opportunities to sow mayhem. The group also plays upon the lingering resentment amongst some Sunnis that the United States is an occupier. That wont end even when the U.S. withdraws as Al Qaeda has painted the new Iraqi government as American puppets and the new occupier. The United States has also been emptying its prisons as it pulls out. Some of these detainees came into contact with or were recruited by Al Qaeda while they were incarcerated. The American military claims that the recidivism rate amongst these former convicts is low, but the Iraqis claim otherwise. One notorious example was Manaf Abdul Rahim al-Rawi, Al Qaeda’s governor of Baghdad. Rawi joined the insurgency early on, and took part in the fighting in Fallujah where he met and was recruited by Zarqawi. In 2004 the Americans arrested him. While imprisoned he became friends with Haji Abdul Wahid, Baghdad’s emir. After Rawi was released, he went right back to operating with Al Qaeda, and eventually replaced Wahid as Al Qaeda’s governor of Baghdad. Before his arrest in 2010 he was the mastermind behind the bombings of the Foreign Affairs Ministry, Finance Ministry, Justice Ministry, Planning Ministry, and provincial council buildings in Baghdad. Another factor is the Iraqi budget. In 2009 the government’s revenues collapsed when the world recession hit and oil prices dropped. The Iraqi budget took a large hit, and the security forces didn’t get as much funding as they needed. While the nation’s finances have rebounded this year, the appropriations for the Defense and Interior Ministry have not. Last, during the later years of Saddam Hussein’s rule Islamism spread amongst Sunnis in Iraq. Abu Omar Baghdadi for instance, the recently deceased emir of the Islamic State was a security officer in Haditha, Anbar when he joined a Salafist group in the 1990s. That led him to join violent jihadist groups when the United States invaded, and he eventually became a leader in Al Qaeda. All of these factors explain the organization’s staying power despite its losses. It can still draw on local ties, it has a new body of recruits and old members being released from prison, the American withdrawal presents it with more operating space, the Iraqi forces have not been able to expand recently because of budget restraints, and its anti-occupation and Islamist ideology all provide it with opportunities and resiliency.

It’s continued impact is shown by monthly headline grabbing attacks. It was blamed for the July 18 bombing of Sons of Iraq members in Baghdad who were waiting for their pay that killed at least 43. Earlier in that month it sent suicide bombers against Shiite pilgrims. In June it carried out a daring raid on the Iraqi Central Bank and bombed the Iraq Trade Bank, both in the capital. These show Al Qaeda’s new emphasis upon attacking the Iraqi government, security forces, and Shiites, which is what the group’s new leadership called for after the deaths of Masri and Baghdadi. It also highlights the Islamists determination to continue with their operations even after the U.S. leaves the country.

Benraad believes the only way that Al Qaeda can be countered is through a coordinated political and military strategy. U.S. and Iraqi forces need to continue their raids and intelligence gathering against the organization. That includes American training and support for the Iraqi police and military. Iraq’s prisons also need to be reformed so that they can keep track of and counter the spread of radicalism within them, and stop ex-cons from joining militant groups once they are released. Finally, Al Qaeda’s ideology needs to be countered by promoting moderate imams. Some of these proposals are now in affect, but others are unlikely to happen. Counterinsurgency operations are obviously still occurring as the continuous news about Al Qaeda’s leaders being killed and captured proves. The U.S. also plans to stay in Iraq until 2011 and beyond as Iraqi forces will still need their help. Many religious leaders, including Sunnis, have condemned Al Qaeda’s continued attacks upon Iraqis, but there is nothing organized to stop the spread of jihadist ideas. Finally, Iraqi prisons are infamous for being overcrowded, under funded, and being abusive. The transfer of detainees from American to Iraqi hands is going to worsen their conditions, which can only help with recruitment and re-enforce the militants’ claims that the Iraqi government is the new enemy. That offers hope and apprehension about the future. On the one hand, continued losses can be expected, but Al Qaeda can still adapt and survive. That means it will have to collapse of its own accord. That could eventually happen after the U.S. pulls out and if the Iraqi government becomes more affective. The problem is that could take years.

SOURCES

AK News, “Al-Qaeda wanted man arrested in Baghdad,” 7/15/10

Associated Press, “Al Qa’eda in Iraq vows attacks,” 5/14/10

Aswat al-Iraq, “AQI’s man no. 2 in Diala captured,” 7/17/10

Benraad, Myriam, “Assessing AQI’s Resilience After April’s Leadership Decapitations,” CTC Sentinel, June 2010

Chulov, Martin, “Iraq prison system blamed for big rise in al-Qaida violence,” Guardian, 5/23/10

Hazimeh, Mayssa, “Governor of Baghdad in Al-Qaeda organization reveals details about it,” Islam Times, 6/10/10

Peterson, Scott, “Sunni Awakening resolute in face of Iraq bombing,” Christian Science Monitor, 7/19/10

Williams, Timothy and al-Jawoshy, Omar, “Iraq Suicide Bombing Strikes Shiites,” New York Times, 7/7/10

Average Daily Casualties In Iraq Drop In June 2010

As in previous months, the four organizations that cover deaths in Iraq, Iraq Body Count, icasualties.org, Iraq's ministries, and the Associated Press, showed mixed trends. As always, Iraq Body Count recorded the highest number of deaths for June at 379 compared to 370 in May. They were the only group that showed a steady increase in monthly deaths in 2010. In January for example, they noted 258 deaths, going up to 296 in February, 311 in March, 376 in April, before slightly dropping to 370 in May. Iraq Body Count regularly revises their initial numbers down after they go through their sources, so June's mark may decline as well. Icasualties had the fewest deaths at 176 in June compared to 279 in May. They tend to solely rely upon Western reports, and ignore English language Iraqi sources like Aswat al-Iraq that track daily security incidents. On their site they note that the actual number of Iraqi deaths are much higher than their count. In 2009 a monthly pattern emerged where casualties would go up and down every month. The Associated Press is the only organization that continues to report that trend. In January 2010 they had 177 deaths, going up to 255 in February, down to 230 in March, up to 321 in April, declining to 278 in May, before increasing to 294 in June. 

Iraqi deaths are at the lowest level since 2003, and are unlikely to see any serious change in the near-term. The average number of deaths in Iraq has been going up since the beginning of the year, but is just below the rate set in 2009. In January 2010 there was an average of 6.1 Iraqis killed per day. By June that rate had gone up to 9.4 per day. In the first six months of the year there have been an average of 9.2 Iraqi casualties per day, compared to 10.5 in 2009. Also warnings about increased violence due to political stalemate over forming a new government are only partially true. The average number of deaths went up the month after the March 2010 parliamentary elections, but have been inching downward since then. Overall, Iraq has hit what some military analysts have called the "irreducible minimum." Casualties are unlikely to see any sizeable change for the foreseeable future until there is a shakeup in the current status quo. Previous sea changes have been the Anbar tribes turning against Al Qaeda in Iraq, the U.S. Surge, the formation of the Sons of Iraq, Moqtada al-Sadr's cease-fire, and high Sunni participation in the 2009 provincial elections. Until another such event happens Iraq will continue to see the daily attacks and deaths that it is currently experiencing.

Monthly Death Counts

Month	Iraq Body Count	Icasualties	Iraqi Ministries	Associated Press	Avg. Deaths Per Day
Jan. 10	258	135	196	177	6.1
Feb.	296	236	352	255	10.1
Mar.	311	183	367	230	8.7
Apr.	376	259	328	321	10.7
May	370	279	337	278	10.3
June	379	176	284	294	9.4
1st 6 Months 2010	331.6	211.3	310.6	259.1	9.2

SOURCES

Agence France Presse, "Iraq death toll falls sharply in June: ministries," 6/30/10

Associated Press, "Iraq: Key figures since the war began," 7/1/10

Cordesman, Anthony, "Victory And Violence In Iraq: Reducing the 'irreducible minimum,'" Center for Strategic and International Studies, 2/25/08

icasualties

Iraq Body Count