Iraq Political Cartoons On Corruption

Below are a series of political cartoons collected by the Special Inspector General for Iraq Reconstruction (SIGIR) from leading dailies within Iraq on corruption. In 2011, Iraq was tied for the 8th most corrupt country in the world by Germany's Transparency International. That was an improvement from the previous year when it was #4. A World Bank assessment of corruption gave Iraq a 5 out of 100 for 2010, with 100 being the best rank and 0 being the worst. The government has been completely incapable of stopping the widespread graft and bribery, because all the leading politicians and parties benefit from it. That led the chief anit-corruption official Judge Rahim al-Ogaili to resign in the middle of last year. The main anti-graft agency the Integrity Commission also told the SIGIR at the end of 2011 that the country's justice system is not able to deal with the problem. As a result, corruption is a constant issue in the Iraqi press as seen in these cartoons.

Corruption wave in "Tsunami Baghdad" (Al-Mada)

The caption reads, "I swear to God, if I weren't so protective of Iraq's money, I wouldn't have deposited it in my personal bank account!" (Al-Sabah Al-Jadeed)

It says Integrity Commission on the side of the mouse trap (Al-Mada)

Cartoon shows politicians interfering in the work of the Integrity Commission as they try to combat corruption (Al-Mada)

SOURCE

Special Inspector General for Iraq Reconstruction, "Quarterly Report and Semiannual Report to the United States Congress," 1/30/12

Transparency International, “Corruption Perceptions Index 2011,” December 2011

Iraqi Children Playing In The Streets During The Arab League Summit

Despite the virtual lockdown of Baghdad during the Arab League summit, Iraqi children could still be seen in the streets of the capital enjoying themselves. 

Kids playing soccer in front of the 14th Ramadan Mosque in Baghdad, Mar. 27, 2012 (AP)

A single child playing with a ball in front of police in central Baghdad, Mar. 28, 2012 (AP)

AL JAZEERA VIDEO: Iraq: Mixing Oil & Blood

JANSON MEDIA VIDEO: Blood And Oil: The Middle East In World War I

One Reason Why The Security Forces Can’t Stop Bombings In Iraq

March 20, 2012, was the deadliest day in Iraq so far for the month. At least fifteen bombs went off in ten different cities across the country. That included the capital, Kirkuk in Tamim province, Baiji and Samarra in Salahaddin, Baquba, the capital of Diyala, Mosul in Ninewa, Fallujah and Ramadi in Anbar, Karbala, and Hillah in Babil governorate, resulting in at least 50 deaths, and dozens more wounded. In Baghdad, a car bomb detonated outside of the Foreign Ministry. Another bomb went off by a Christian church in the Mansour district, there was an explosion in central Baghdad, and an attempt on the life of the head of the provincial council by a suicide bomber. Al Qaeda in Iraq’s umbrella organization, the Islamic State of Iraq, later took responsibility for the attacks, saying they wanted to disrupt the upcoming Arab League Summit happening in Baghdad. Every month or so, militants are able to carry off operations like these, which are aimed at undermining the government, and gaining press coverage to make it seem like Iraq is an unstable country. One of the reasons why terrorists are able to successfully detonate so many devices, and get them through the numerous checkpoints in places like Baghdad, is the security forces reliance upon fake bomb detectors.

In 2007, the Iraqi Interior Ministry began buying ADE-651 bomb detectors from the British company ATSC. The devices seemed too good to be true. The English firm claimed that they could detect guns, ammunition, drugs, truffles, human bodies, and ivory, and did not need batteries. Instead, the users were supposed to build up static electricity through walking. The Americans immediately warned the Iraqis that the purchase was a huge waste of money, but the Iraqis went ahead anyway. In 2009, the British government began investigating the company, and in 2010 the owner was arrested for fraud, and the devices were banned from further sales. The inspector general (IG) for the Interior Ministry began looking into the matter, and in October 2010 said that the ADE-651s did not work. They could not do anything however, because the Interior Minister Jawad Bolani used Article 136(b) of the constitution to stop any further investigation. In March 2011, Interior’s IG revealed that up to 75% of the $122 million spent on the bomb detectors actually went to kickbacks for Iraqi officials. That led to the arrest of the head of the Ministry’s bomb division. This was only possible because Minister Bolani was no longer in office after the March 2010 parliamentary elections. Despite all this, ADE-651s can still be seen across checkpoints throughout Baghdad. Below are pictures by Al-Khafaji Mohammed of the Iraqi photo blog BAGHDAD, showing the detectors being used in various security spots in the capital. This is just one example of the institutional corruption prevalent throughout Iraq. This is an especially troubling one however, because hundreds of citizens have probably died due to the use of these fake devices. It’s no wonder then that insurgents are still able to set off bombs in Iraq.

(Al-Khafaji Mohammed)

(Al-Khafaji Mohammed)

(Al-Khafaji Mohammed)

(Al-Khafaji Mohammed)

(Al-Khafaji Mohammed)

SOURCES

Ahma, Rezan and al-Shilshil, Othman, “Three killed, 8 injured in Nineveh and Salahaddin attacks,” AK News, 3/20/12

Al-Babili, Yousef, “One civilian killed and dozens injured in Babil car bomb,” AK News, 3/20/12

Brosk, Raman, “Baghdad governor survives assassination attempt,” AK News, 3/20/12

Healy, Jack, “Attacks Strike as Iraq Plans to Welcome Arab Leaders,” New York Times, 3/20/12

Iraq Body Count, “Recent Events”

Msarbat, Anwar, “1 policeman dead, 4 injured in Falluja,” AK News, 3/19/12

- “Ramadi bombings toll rises to 6 dead and 22 injured,” AK News, 3/20/12

National Iraqi News Agency, “BREAKING NEWS…Kirkuk districts police chief survives assassination attempt,” 3/20/12

- “Death toll of Baquba explosion raised to 20 wounded,” 3/20/12

Al-Shilshi, Othman, “5 injured in Salahaddin attacks,” AK News, 3/20/12

Tawfeeq, Mohammed, “Iraq bombings meant to target summit security, militant group says,” CNN, 3/21/12

How Internal Rivalries Within State Of Law Led To The Baathist Crackdown And Current Political Crisis Within Iraq

At the end of 2011, the Iraqi government began arresting and dismissing people they claimed were Baathists, setting off a political storm. It started when over a hundred staff and faculty from the University of Tikrit in Salahaddin were fired for alleged Baathist ties, followed by over 600 former regime members being detained. This crackdown led to a political crisis with the Prime Minister on the one hand, and the Iraqi National Movement (INM) and a few provinces on the other, which the country is still muddling through to this day. Maliki has since begun to release some of these prisoners to key political leaders to reward them for being willing to cooperate with him. Rather than being a sectarian conflict between the Shiite prime minister and a Sunni political party and provinces, this controversy really started as an internal rivalry within Maliki’s State of Law party that drew in the entire country.

Higher Education Minister Adeeb, not Premier Maliki was the one that started the anti-Baathist campaign in late 2011, which would throw the entire country into a political crisis (Daawa Thi Qar)

The crackdown on alleged Baathists actually began with the Higher Education Minister, rather than Prime Minister Nouri al-Maliki. In July 2011, reports emerged that Higher Education Minister Ali al-Adeeb, who is part of the premier’s State of Law party, was planning on firing former members of the old regime. In October, he started by claiming that his predecessor, Abdul Dhiyab al-Ugayli of the Iraqi Islamic Party, was a Baathist and that his administration had to be reversed. Adeeb then dismissed 140 members of the Tikrit University in Salahaddin, quoting the Accountability and Justice Law, which replaced the deBaathification law, as his justification. The Minister claimed that all those that were fired were former Baathists, and some were from Saddam Hussein’s intelligence agencies. That set off a storm, because the work of the Accountability and Justice Commission was suspended as part of the power sharing agreement that put together the new government in December 2010. The event also helped push Salahaddin towards wanting to become an autonomous region. Rather than being the first strike by the Prime Minister against his Sunni rivals, as many portrayed the event, it appeared that Adeeb was acting on his own. In fact, the Higher Education Minister is known as a rival with Maliki within the State of Law list. There have been several occasions for instance, where his name has been brought up as a possible replacement for Maliki. The differences between the two were highlighted when a member of State of Law accused Adeeb of lying when he said he was enforcing the Accountability Commission’s decisions. 

Some of the alleged Baathists rounded up by Maliki in response to Adeeb's actions, while they confessed to various crimes on state run television, Nov. 2011 (Radio Free Iraq)

Not to be outdone by Adeeb, Maliki quickly went into action by arresting hundreds of alleged Baathists across the country. A total of 655 people were detained. The press reported that Libyan rebels passed onto the Iraqi government that Muammar Qaddafi was backing a Baathist coup, and that was the cause of the arrests. By mid-November 2011, the government trotted out some of the prisoners who confessed on television to committing various acts of terrorism. The authorities would claim they were behind up to 3,300 deaths over the last several years. Legal problems with the crackdown were immediately apparent by the shifting rational given for it. First, the government claimed that people were being picked up for promoting the Baath Party, which is outlawed. Then they talked about the rank of each person, probably because the Accountability and Justice Law bans certain levels of Baathists. The problem is the legislation does not say that is a legal basis for arrest, just the denial of government jobs. The temporary head of the Accountability Commission chimed in by criticizing the detentions, saying that many were made without warrants, and demanding that any innocents rounded up should be released. Finally, the security forces began bringing up a counterterrorism law as the justification. Iraq lacks true rule of law, and this situation brought that fact to the fore. The authorities’ ever changing rational showed that the security forces can often arrest people for whatever reason they want. In this case, it was Maliki’s desire to outdo Adeeb by fighting a straw man, the return of Baathism in Iraq.

Maliki releasing some of the prisoners, and halting Adeeb’s decision in Salahaddin showed the political nature of this crackdown. At the end of 2011, the prime minister cut a deal with Jamal al-Karbuli, the head of the Solution Movement within Iyad Allawi’s Iraqi National Movement (INM), to let 50 accused Baathists out of jail. In return, Karbuli never had his ministers follow the National Movement’s boycott of the cabinet. The next month, Maliki came to another agreement with Education Minister Mohammed Tamim of Deputy Premier Saleh al-Mutlaq’s Iraqi National Dialogue Front, which is also part of the INM. Tamim received 43 prisoners from his home province of Tamim. Then in March, 88 accused Baathists from Baghdad and 31 from Wasit were handed over to White Iraqiya. That party had consistently stood by the prime minister during his dispute with the National Movement. Finally, in early 2012, Maliki said he would not enforce Adeeb’s dismissals at Tikrit University in an attempt to appease Salahaddin’s provincial council so they would not move to make the governorate an autonomous region. The vast majority of press reports portrayed Adeeb and Maliki’s actions as sectarian attacks by Shiites upon Sunnis. The same thing occurred with Salahaddin’s autonomy drive, and the prime minister’s battle with the Iraqi National Movement. What these all missed was the fact that the Education Minister and the premier were rivals, and the former was not going to let the latter out do him in a contest over who was more anti-Baathist. Not only that, but the slow release of 212 people accused of terrorist attacks and killing thousands, and the reversal of Adeeb’s firings both showed that those were political actions rather than anything to do with the law or securing the country.

Iraq has deep political divisions. This is commonly portrayed as sectarian, but that overlooks the conflicts within parties. Education Minister Adeeb and Prime Minister Maliki have been rivals within the State of Law list for several years now, and it was the tension between them that led to the dismissal and arrest of alleged Baathists. None of their actions appeared to be legal, but was rather the result of powerful politicians manipulating their positions to increase or maintain their standings within their party and with their constituents. In the end, the prime minister came out on top as shown by his release of over 200 alleged Baathists to politicians he favored, and the reversal of Adeeb’s decision in Salahaddin. The fact that their personal rivalry led to a political crisis between the State of Law and the Iraqi National Movement, and between the central government and some provinces shows how fragile Iraq’s politics are. Maliki has been able to weather the storm, because he has more power than Adeeb, the INM is weak and divided, and he has control of the courts and security forces to hold off the provincial drives for greater autonomy. The country is still pulling itself out of this mess today as a result. Unfortunately, this will not be the last time this happens as politicians are continually vying for power, and trying to test the limits of the system to see how far they can push it to achieve their goals.

SOURCES

Alsumaria, “Iraq former Education Minister accused of running ministry under Baathist direction,” 10/21/11

Arango, Tim, “Rebels Said to Find Qaddafi Tie in Plot Against Iraq,” New York Times, 10/26/11

Aswat al-Iraq, “Salahuddin province declares administrative and economic region,” 10/27/11

Dare, Najla, “Internal exposure Confessions cell in the Baath Party,” Radio Free Iraq, 11/21/11

Al-Hassani, Mustafa, “Sharp differences between the writer and al-Maliki about the nomination of the latter as prime minister for a third term,” Shat News, 1/7/12

Najm, Hayder, “fall guy,” Niqash, 4/1/10

Sowell, Kirk, “Inside Iraqi Politics No. 26,” 11/16/11

- “Inside Iraqi Politics No. 32,” 2/9/12

- “Inside Iraqi Politics No. 33,” 2/29/12

- “Inside Iraqi Politics No. 34,” 3/14/12

Tayyeb, Mohammed, “Official criticizes govt. for delaying Baathist trials,” AK News, 11/10/11

Waleed, Khaled, “no more baaths: wiping out saddam or starting the next civil war?” Niqash, 10/27/11

February 2012 Sees Fourteen Month Low In Iraq Oil Exports

Despite the growing work of international energy firms, Iraq cannot seem to maintain a steady flow of oil exports. The Oil Ministry is putting high hopes on a new terminal opening in Basra to finally increase capacity, but even that is running into problems. In February 2012, the country’s foreign sales saw another dip for the second month in a row, reaching a fourteen month low.

Iraq’s oil exports took another hit in February 2012. Last month, the country exported an average of 2.016 million barrels a day. That was not only down from 2.145 million barrels seen in January, and below the yearly average for 2011, which stood at 2.16 million barrels, but the lowest mark since the beginning of last year. A barrel of Iraqi crude went for $112.92 last month, which was an increase from January’s $109.08, The country was not able to take advantage of that rise however, because of the low export figures. That meant it only earned $6.595 billion in February, the lowest amount in twelve months. In the first half of 2011, Iraq saw a steady increase in exports starting at 2.16 million barrels in January, then climbing to 2.22 million barrels in May, and then reached the yearly high mark at 2.27 million in June. After that, the amount of oil shipped overseas took a steady drop, never to return to 2.2 million again. At the same time, tensions in the Middle East kept prices up, so despite the uneven production Iraq was still able to earn a large amount of money. February broke that trend.

Iraq Oil Exports And Profits 2011-2012

Month	Avg. Exports (Mil/ Bar/ Day)	Avg. Price Per Barrel	Revenue (Mil)
Jan. 11	2.16	$90.78	$6.082
Feb.	2.20	$98.44	$6+
Mar.	2.15	$107.13	$7.167
Apr.	2.14	$114.26	$7.342
May	2.22	$108	$7.45
Jun.	2.27	$105.16	$7.173
Jul.	2.16	$108.80	$7.3
Aug.	2.19	$104.92	$7.124
Sep.	2.10	$104.89	$6.619
Oct.	2.08	$104.43	$6.742
Nov.	2.13	$106.59	$6.833
Dec.	2.14	$106.18	$7.061
2011	2.16	$104.96	$6.907
Jan. 12	2.10	$109.08	$7.123
Feb.	2.01	$112.92	$6.595

The cause of February’s decline could be due to a mix of three factors. First, at the beginning of the month, the flow of oil through Basra, which carries the vast majority of the country’s petroleum dropped from an average of 1.7 million barrels to just 480,000, because the weather was creating choppy seas, and preventing tankers from docking at the port there. Around the same time, the northern pipeline to Turkey was bombed, and shut down for three days. Finally, Iraq cut its exports to Jordan, which are shipped by truck from 10,000 barrels a day to 6,000. No reason was given for the decrease, but later the two countries announced that they would be raising shipments to 15,000 barrels a day between the two countries later on. Even without those troubles, Iraq constantly suffers from bottlenecks in its system, which causes exports to go up and down. All of these factors together can help explain why February saw such low numbers.

Oil Minister Luaibi (left), Deputy Premier Shahristani (center), and Premier Maliki (right) at the opening ceremony of Basra's new oil terminal, Feb. 12, 2012 (Reuters)

These difficulties are happening despite increased production and capacity. Oil companies are currently ramping up production at some of the country’s largest fields. The country lacks adequate storage facilities however, so any large back-up in exports would mean that output would have to be cut. The first of four new single point mooring docks also started operating in Basra in February. It was supposed to open in January, but technical difficulties led to a delay. The first terminal has a capacity of around 850,000 barrels a day, which would provide a much needed boost to its foreign shipments. Still, it has taken years for the country to reach 2 million barrels a day in exports, and that slow but steady progress is likely to continue into the future, because of all the difficulties the country continues to face.

Iraq’s oil exports have always gone up and down, and February 2012 was no different. Natural, technical, and security issues were all at play, which could account for why the numbers were so low last month. There is hope for a long-term boost with the new terminal in Basra, and the other three to follow it. As with too many things in Iraq, those will probably take a long time to get up and running as is happening with the first one. In the short term, then, exports are likely to stay at around 2011’s levels, with hopes for a larger increase by the end of the year, and then heading into 2013. 

SOURCES

Ajrash, Kadhim, “Iraq Oil Exports Via Turkey Resume After Sabotage, Official Says,” Bloomberg, 2/6/12

Ajrash, Kadhim and Razzouk, Nayla, “Iraq Opens Offshore Oil Facility to Boost Export Capacity,” Bloomberg, 2/12/12

Associated Press, “Iraq oil exports, revenues decline in February,” 3/25/12

Mackey, Peg, “Iraq target 200,000 bpd oil export rise for March,” Reuters, 2/10/12

Reuters, “Iraq new oil terminal loading in 10 days,” 2/7/12

- “Iraq’s oil exports climb to 888,000 bpd,” 2/4/12

Saifaddin, Dilshad, “Slight dip in Iraq’s February oil exports,” AK News, 3/1/12

Wanan, Jaafar, “Iraq cuts oil exports to Jordan by almost half,” AK News, 2/26/12

Iraq Prepares For The Arab League Summit

The Iraqi government is hoping to pull off a foreign policy coup on March 29, 2012, when diplomats and leaders gather in Baghdad for the Arab League Summit. Iraq has had difficult relations with many of its neighbors since 2003, especially with countries like Saudi Arabia, which considers the Shiite-led government as being pro-Iranian. Kuwait is also still bitter after Saddam Hussein’s 1990 invasion. Prime Minister Nouri al-Maliki has been working overtime to get these countries to change their minds, so that they attend the meeting. In February, he sent a delegation to Riyadh, Saudi Arabia, and in March he went to Kuwait. The premier returned with a deal with Kuwait over compensation for airplanes that were stolen or damaged by Saddam. Before that in February, Kuwait said it would reopen its embassy. The prime minister also worked out a prisoner exchange with the Saudis, greater cooperation on security, and they appointed a non-resident ambassador, the first in twenty-two years. Baghdad will pay Egyptians that worked in Iraq in past decades, but were never paid, as well. The government has also spent $400 million to refurbish sections of the capital where the conference will be held. Extra security has also been deployed to stave off any potential terrorist attacks, which groups like Al Qaeda in Iraq have threatened to carry out. 

This is quite a turnaround for Iraq. The meeting was originally scheduled for March 2011, but the Arab Spring and Iraq’s support for the protesters in Bahrain, which soured the opinion of the Gulf Cooperation Council, led to it being pushed back to March 2012. Now that the region is relatively stable outside of Syria, Iraq can return to the Arab stage. Foreign Minister Hoshyar Zebari already became the head of the Arab League in early 2011. Since 2003, many in North Africa and the Middle East have shunned Iraq, because they opposed the U.S. invasion, and the ascent of Shiites to power. Now the country can at the minimum have a symbolic victory if not a real one when it hosts the Arab League. This will be a major step for the country to restore its standing and relations in the region. It is just the latest sign of the return of normality to Iraq.

Arab League Secretary General Nabil El-Araby (left) and Iraq's Foreign Minister Zebari in preliminary meetings in Baghdad for the summit, Mar. 25, 2012 (AP)

Gardens and poster are being put up around the capital (AP)

Security is also tight (AP)

This is the conference room where the meeting will take place (AP)

The government is also putting on public events like this race through the capital before the summit (Reuters)

SOURCES

Arango, Tim, “Arab League Again Delays Baghdad Summit Meeting,” New York Times, 4/20/11

- “Ready or Not, Iraq Ascends to Take Helm of Arab Bloc,” New York Times, 3/23/11

Associated Press, “As Iraq hosts summit, Syria crisis puts it under pressure to choose between Iran, Arab ties,” 3/24/12

- “Bahrain’s foreign minister says Gulf states ask Arab League to cancel Iraq summit,” 4/13/11

Aswat al-Iraq, “Saudi Arabia appoints first Iraq envoy in 22 years,” 2/21/12

Blair, Edmund and Awad, Marwa, “UPDATE 1-Arab League delays summit by year to March 2012,” Reuters, 5/5/11

Habib, Mustafa, “’charm offensive’ claims another victim: Iraq makes friends with kuwait,” Niqash, 3/21/12

Healy, Jack, “Saudis Pick First Envoy to Baghdad in 20 Years,” New York Times, 2/21/12

Ibrahim, Haider, “Saudi Arabia to open pilgrimage visa office and consulate,” AK News, 2/27/12

Sowell, Kirk, “Inside Iraqi Politics No. 34,” 3/14/12

Tawfeeq, Mohammed, “Iraq bombings meant to target summit security, militant group says,” CNN, 3/21/12

Waleed, Khaled, “the thaw begins: icy relationship between saudi arabia and iraq warming up,” Niqash, 2/29/12

Al-Wannan, Jaafar, “Kuwaiti embassy reopens amid hope and controversy,” AK News, 2/13/12

Al-Yousef, Mortadha, “Iraq starts “new stage “of security cooperation with Saudi Arabia,” AK News, 2/29/12

Garbage And Open Sewage Throughout Iraq’s Capital Of Baghdad

Iraq is famous for its lack of services. One way Iraqis are constantly reminded of this is the piles of garbage, waste, and open sewage seen throughout the streets, rivers, and empty lots of the country. Below are a series of pictures from Baghdad that highlight this problem from the Iraqi site Baghdad by Al-Khafaj Mohammed.

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

(Al-Khafaj Mohammed)

AL JAZEERA VIDEO: 'Emo' Youth Targeted In Iraq

2011 Sees Another Large Increase In Foreign Investment In Iraq

Since Iraq’s civil war ended in 2008, its economy has begun to take off. The World Bank and others have predicted that it will be one of the fastest developing nations in the next several years with double digit Gross Domestic Production (GDP) growth. That’s because the country needs so many basic forms of infrastructure, and its oil and gas industries are finally beginning to be developed after over a decade of international sanctions. Foreign investment has grown over 40% for the last two years, but there are still major problems with completing some of the larger projects that are planned by the government.

2011 saw another large increase in the amount of foreign money being invested in Iraq. There was a total of $55.67 billion in investment last year. That was up 40.3% from 2010’s $39.67 billion. 2010’s amount was a 48.7% increase from 2009. 276 companies from 45 countries did business with Iraq in 2011. The total number of contracts also grew to 294, up 80.4% from the 164 signed in 2010. It was also the reason why several experts believed that Iraq would be one of the fastest growing economies in the world over the next several years. In January 2012 for instance, the World Bank estimated that Iraq’s Gross Domestic Product (GDP) would grow 12.6% for the year, and 10.2% in 2013. The Deputy Governor of the Central Bank of Iraq predicted an average of 9.4% GDP growth from 2012-2016. The large growth rates and amount of money flowing into the country is because international sanctions have finally been removed, the Iraqi civil war ended in 2008, and the country has so many needs. This showed that despite the U.S. troop withdrawal, continued violence, and the on-going political dispute between Prime Minister Nouri al-Maliki and his opponents, business in the country is still flourishing.

Before 2008, investment in Iraq went up and down, and was at a very low level. In 2003, the first year after the fall of Saddam Hussein, only $3.87 billion was invested in the country. That almost doubled to $6.74 billion the next year, but then dropped to an anemic $1.17 billion in 2005 as the civil conflict took off. 2006 saw a large increase to $5.05 billion, before dropping to $2.70 billion in 2007. It wasn’t until 2008, that investment reached double digits to $17.93 billion. It has grown every year since then. Again, foreign money flowing into the country was directly related to the security situation within the country. With violence reduced to terrorism the amount of investment can only continue to grow.

Foreign Investment In Iraq 2003-2011

Year	Investment
2003	$3.87 bil
2004	$6.74 bil
2005	$1.17 bil
2006	$5.05 bil
2007	$2.70 bil
2008	$17.93 bil
2009	$28.70 bil
2010	$39.67 bil
2011	$55.67 bil

Another positive development was the increasingly smaller size of projects planned for the country. That might seem an oxymoron, but Iraq has faced major problems with large development plans. The smaller the project, the greater likelihood that they will be completed as planned. The average size of deals signed with Iraq went from $243 million in 2010 to $189 million in 2011. That continued the trend started in 2010 when contracts saw an even larger reduction from an average of $683 million to $260 million. Larger deals can drag on for years past their original deadlines, run into delays, and fall apart. This is due to problems with finances, logistics, bureaucracy, and the lack of trained personnel within the Iraqi government.

Investment is also being spread around the country. Before, Baghdad and Basra took the lion’s share of money. While they are still number one and two, the rest of the country is also experiencing development. In 2011, Basra received the most foreign capital, surpassing Baghdad, which was number one in 2010. Their share of total investment in the country also declined from 74.3% in 2010 to 47.0% last year. The three Kurdish provinces were third in 2011 with 14.5% of total investment, and then Ninewa, 9.4%, and Salahaddin, 6.4%. This was an important trend, because Iraq’s other provinces are in desperate need of growth with poor services, and the highest rates of poverty.

While Iraq’s economy is the most oil dependent country in the region, real estate was the largest field invested in for the second year in a row. A total of $14.524 billion was committed to housing in 2011, 26.1% of all foreign money. It’s estimated that Iraq needs to build 650,000 houses per year to meet the demand of its public, but it is no where near achieving that goal. It should be no surprise then that the largest deal last year was for $7.25 billion with South Korea’s Hanwha to construct 100,000 housing units east of Baghdad.

Foreign Investment In Iraq By Sector 2011

Sector	Value ($ mil)	% Total
Real Estate	$14,524	26.1%
Oil and Gas	$12,769	22.9%
Electricity	$11,196	20.1%
Water & Sanitation	$4,285	7.7%
Defense	$2,850	5.1%
Real Estate	$2,433	4.4%
Telecommunications	$2,063	3.7%
Industry	$1,919	3.4%
Transportation	$1,213	2.2%
Tourism	$844	1.5%

After real estate, oil and gas and electricity were the next biggest industries invested in. The second largest deal for 2011 was with Royal Dutch Shell and Mitsubishi to capture natural gas from oil fields in southern Iraq. It will include $12.8 billion in infrastructure and a $4.4 billion natural gas plant. Iraq also signed deals to build new pipelines and mooring points for Basra province, which accounts for the vast majority of the country’s oil exports. While these deals are moving ahead, and oil production is ramping up in the country, the same cannot be said for the electricity field. Last year, the Electricity Ministry signed a $1.2 billion deal with a fake Canadian company to build 10 power plants, and with a bankrupt German one for five power plants worth $650 million. Another contract with South Korea’s STX Group also ran into problems. Originally, it was supposed to build 25 mini-power plants in southern Iraq worth $2.76 billion. STX couldn’t come up with the financing however, so the deal was reconfigured to build nine regular power plants instead. Then in November 2011, the Electricity Ministry announced that it and STX had come to final terms for $1.044 billion to build power plants in three provinces. Not only that, but the Ministry’s plans to solve the country’s chronic electricity shortages are nowhere near coming to fruition. New Electricity Minister Abdul Karim Aftan said that power output would increase by the summer of 2012, and that the country’s power problems would be solved by 2014. By 2015, he claimed that the country would be producing 27,000 megawatts. An independent assessment found that this will not be possible. It predicted that Iraq would have the capacity of only 18,000 megawatts by 2015, and that none of the new power plants planned would come on line until 2013, not this summer. That means there will still be years of power outages that affects not only the public, but the economy as well. The Ministry needs to step away from such large deals, and set more achievable goals, but because the government is under such pressure to solve this problem, it doesn’t seem capable of doing that yet for political reasons.

In terms of countries investing in Iraq, South Korea surpassed Turkey as the largest source of funds. South Korea went from fourth largest investor in 2010 to number one in 2011. It committed $11.988 billion last year, 21.5% of the total. That was due to the $7.25 billion housing deal with Hanwha. Then came the U.S. with $6.878 billion. $2.3 billion of that was with Lockheed Martin for F-16 fighter jets. America was number five in 2010. Turkey was number one that year, but dropped to fifth in 2011. That’s because the majority of deals it signed last year were under $1 billion. The list of top investors shows that Iraq is attracting companies from around the world.

Foreign Investment In Iraq By Country 2011

Country	Value ($ mil)	% of total
South Korea	$11,988	21.5%
U.S.	$6,878	12.4%
England	$4,096	7.4%
Netherlands	$3,825	6.9%
Turkey	$3,694	6.6%
Germany	$3,172	5.7%
China	$3,093	5.6%
UAE	$2,959	5.3%
Italy	$2,829	5.1%
Iran	$2,184	3.9%

Iraq’s economy has grown in leaps and bounds in the last couple years. That’s largely fueled by the oil industry, which accounts for 90% of the government’s revenue, and the improvement in security. With that, Baghdad has been able to sign hundreds of deals with foreign companies to repair its infrastructure, and expand its production of petroleum and natural gas. The government is also slowly but surely weaning itself of large, unwieldy projects, many of which fail to materialize. Still, the country is years away from achieving any of its lofty goals for things such as housing and electricity. As long as oil remains at a high price, Iraq will have the funds to sign more deals to try to resolve these issues as it has to make up for a lost decade when it suffered under international sanctions, and then five years of invasion and civil war. That’s the reason why Iraq will be one of the fastest growing countries in the world for the next several years.

Top 30 Investment Deals In Iraq 2011

1. $7,250 mil, Real Estate, South Korea’s Hanwha, 100,000 housing units east of Baghdad
2. $6,980 mil, Oil & Gas, Netherlands and Japan’s Royal Dutch Shell and Mitsubishi, natural gas development in Basra
3. $2,600 mil, Water & Sanitation, Germany’s Bauer, 6-year rehabilitation of Mosul Dam in Ninewa
4. $2,300 mil, Defense, U.S.’s Lockheed Martin, F-16 fighter jets
5. $2,000 mil, Real Estate, UAE’s Majid al Futtaim Holding, shopping centers, Kurdistan
6. $1,500 mil, Real Estate, UAE, Cyprus, Greece’s FiberPro, 30,000 housing units in Tikrit, Salahaddin
7. $1,500 mil, Real Estate, U.S.’s Hill International, construction of management services, Basra
8. $1,400 mil, Water & Sanitation, South Korea’s Kolon, Sang Young, Hyundai, construction of water and sewage system, KRG
9. $1,189 mil, Electricity, China’s China National Machinery and Equipment Corporation, construction of 630 megawatt power plant, Salahaddin
10. $1,044 mil, Electricity, South Korea’s STX Heavy Industries, building 900 megawatt worth of power plants, Iraq
11. $1,000 mil, Electricity, China’s Shanghai Electric, expansion of Zubaidiya power plant, Wasit
12. $700 mil, Electricity, South Korea’s Kolon, San Young, Hyundai, electricity infrastructure, KRG
13. $650 mil, Telecommunications, Sweden’s Ericsson, 5-year network infrastructure, Iraq
14. $640 mil, Oil & Gas, U.S.’s Baker Hughes, 60 wells at Zubayr field, Basra
15. $600 mil, Real Estate, Turkey’s Nursoy, building 1,600 housing units in International Zone, Baghdad
16. $550 mil, Electricity, France’s Alstom, construction of water and sewage system for hydroelectric plant, Diyala
17. $550 mil, Defense, Ukraine’s Antonov, 6 An-32 planes
18. $518 mil, Oil & Gas, Australia’s Leighton Offshore, single point mooring and export pipeline, Basra
19. $510 mil, Oil & Gas, Italy’s Saipem SpA, production and refurbishment at Zubayr field, Basra
20. $472 mil, Oil & Gas, Italy’s Saipem SpA, building oil measuring and control platform, Basra
21. $467 mil, Real Estate, Turkish company, building 5,166 housing units, Karbala
22. $400 mil, Telecommunications, Kuwait’s Zain, expansion and upgrade of network systems
23. $390 mil, Electricity, Japan and Italy’s Sumitomo and Siemens Italy, building 8 mobile substations and spare parts
24. $388 mil, Electricity, Turkey’s Calik Enerji, building 6 750 megawatt power plants, Ninewa
25. $365 mil, Oil & Gas, Iran’s National Iranian Gas Company, construction of natural gas export pipeline
26. $360 mil, Electricity, South Korea’s Hyundai Engineering and Construction, building 1,500 megawatt Rumaila power plant, Basra
27. $348 mil, Electricity, Greece’s Metka, building 1,250 megawatt power plant, Basra
28. $340 mil, Electricity, Iran’s Tabdil Energy Company, building 4 125-megawatt power plants, Wasit
29. $333 mil, Electricity, India’s Bharat Heavy Electricals Ltd., building 550-megawatt power plant, Wasit
30. $308 mil, Real Estate, Turkey’s Tikarvan, building 4,500 housing units, Ninewa

SOURCES

AIN, “Minister of Electricity expects power improvement next summer,” 2/2/12

- “MP rules out improving electric power next Summer,” 2/4/12

Dunia Frontier Consultants, “2011 Year in Review, Foreign Commercial Activity in Iraq,” March 2012

- “Foreign Commercial Activity in Iraq 2010 Year in Review,” 2/5/11