Wednesday, May 13, 2015

Iraq During The Summer Insurgent Offensive Interview With North America Western Asia Holdings CEO & Pres Paul Brinkley

The insurgent’s summer offensive in Iraq in 2014 shocked the country and the world. The seizure of Mosul in Ninewa was followed by a quick surge south that took part of Kirkuk and Salahaddin province along with the seizure of Tikrit. A few weeks later the Islamic State turned north and attacked the Kurds in Ninewa and Diyala. Iraq was reeling only to be saved by Ayatollah Sistani’s fatwa to defend the country, and the entry of the Iranians and the U.S.-led Coalition. Paul Brinkley is a former U.S. Deputy Undersecretary of Defense who led a Task Force in Iraq focused on economic stabilization from 2006-2011, an effort he wrote about in his recent book War Front to Store Front.  He is now the co-founder and CEO of North America Western Asia Holdings (NAWAH), which is a major investor in Iraq, and was in the country during this traumatic period. Here is an interview with Brinkley about what Iraq was like during the summer of 2014 up to the present time.

1. The fall of Mosul in June 2014 caught everyone by surprise. You were in Iraq at that time, what was your mood and that of the Iraqis you were working with then?

We were primarily working in the south (Basra), and had just begun working to move cargo north and open outbound export markets for refrigerated produce from Kurdistan Region through our port, shipping, and distribution operations in southern Iraq – a channel to Gulf and Asian markets that the KRG has sought for a long time.  Mosul had grown increasingly risky dating to before 2011, certainly for any international or western engagement, but also for Iraqi government forces as sectarian tensions rose since 2011.   The speed at which the Iraqi forces fell to a relatively small number of ISIS operatives in June of 2014 surprised the international community, but the continual degradation of Iraqi security forces, especially at the command level, since 2011 was no secret by June of last year.  The attitude throughout Iraq was increasingly pessimistic by summer 2014, elections had come and gone, and the potential for political change was starting to fade.

2. Even before Mosul violence had been ramping up in Iraq since 2013. Open fighting broke out in Anbar at the end of that year when Prime Minister Nouri al-Maliki shut down the protest sites there. Were you surprised by how fast Anbar collapsed into violence, followed by other parts of the country like Ninewa, Salahaddin, Diyala and Kirkuk in 2014?

Security had started to degrade and Sunni tensions were rising continually starting with the removal of prominent Sunni political figures from the Iraqi government beginning in late 2011.  The sense among the Sunni population, fairly or not, that Sunni leaders were being removed from key positions following the departure of US forces was clear and growing, and with that sense came a foreboding that the sort of climate the US occupation experienced in 2004-2006 was returning.  Sunni leaders were very vocal about this in discussions from 2012-2014, there were plenty of warning signs that the situation was deteriorating.  The Western hope in the face of this deterioration was to hold out until national elections in early 2014, and that the balloting process would serve as a relief mechanism for Sunni frustrations that could drive political change.  That belief that elections alone would solve problems in Iraq proved to be, once again, misplaced.

Al Anbar is always the harbinger of Sunni political direction in Iraq – the collapse of Anbar did not happen through invasion of outside forces – it happened when a critical mass of the population of Anbar felt disenfranchised by Baghdad to the point that they ‘flipped’ to a position of sympathy with the self-proclaimed Islamic State, and stopped resisting the radical Islamist movement.  Baghdad moving militarily against the mostly peaceful extended Sunni protest in Ramadi was the triggering event that led to the ‘flip’.  It was a similar phenomenon to the widespread Anbar acceptance of Al Qaeda in 2004-2006, with a similar ‘buyer’s remorse’ phase that followed immediately after IS established control. 

Anbaris and, in general, Sunni Iraqi citizens want greater autonomy and economic opportunity and a sense of control over their own affairs.  Some leaders remain in denial that the era of Sunni leadership in Baghdad is over, and would like to turn back the clock and reclaim power in Baghdad.  But the majority wants opportunity for their young people, and freedom from perceived oppression by Baghdad.  They do not want to live under the radical interpretation of Sharia law imposed first by Al Qaeda and now by ISIS.  That they were willing to risk the imposition of ISIS control is an indicator of how much frustration had erupted in Anbar in the period after US forces left in 2011.

In War Front to Store Front, I relate in some detail our efforts in 2007-2009 to develop economic strategies and programs for Anbar and the northern Sunni provinces as we saw Kurdistan and the south beginning to take off economically.  There was clear frustration even then among the Sunni population that they would be left behind as the economies in the rest of Iraq began to prosper.  But those efforts were not supported after our economic mission ended in 2011, and I believe those early seeds of frustration were the beginning of what accelerated with the US departure in 2011 – an open loss of support for the Baghdad government among the majority of the Sunni population. 

So it was not a surprise, the repeated collapse of Sunni provinces into violence was a long time coming, and could have been avoided during the three years after 2011.

3. The Iraqi Security Forces (ISF) lost roughly one third of their men in the collapse of Mosul and later Tikrit. That prompted Ayatollah Ali Sistani to issue a fatwa calling for the defense of the country. That led thousands to sign up for the ISF as well as the Hashd al-Shaabi, also known as the Popular Mobilization Units (PMUs). How did that affect the feelings in the country, and what role has it played in the fight against the insurgency?

The Sistani call to defend Baghdad and the Shia shrines in places such as Samarra in Salah ad Din province instantly electrified the Shia south, and led to the displacement of the remaining Iraqi security forces trained by the US from 2003-2011 as the principal ground fighting force in Iraq, a situation that remains to this day.  This call bolstered the fighting forces available to arrest ISIS momentum at a critical point in time.  As a result, however, Shia militias now form a large percentage of the available manpower fighting in Diyala and Salah ad Din – an unworkable situation for the long-term stabilization of these majority Sunni areas, not to mention future needed actions to roll back ISIS in Anbar and Ninewa Provinces.  The recent removal of ISIS in Tikrit is an example – without local involvement in sustaining this progress it will simply devolve into an active insurgency resisting the largely Shia security forces that have occupied the city.  New government leaders in Baghdad understand this, but re-establishing Sunni security capacity is not happening quickly.  There is a huge lack of trust as a result of perceived Sunni cooperation with ISIS among large elements of the Shia population.

4. The first country that came to the aid of the Iraqi government was Iran. Later the United States organized an international coalition, but it waited until Prime Minister Maliki was put out of office and replaced by Premier Haider Abadi. Can you compare how those two countries have attempted to assist Iraq, and how are they perceived by Iraqis?

The easiest breakdown is that Iran is providing active leadership engagement to militia efforts in ground campaigns against ISIS, and the US is working to again rebuild the sanctioned Iraqi security forces while providing air support in the effort to roll back ISIS territorial gains.  That’s a little over-simplified but a good general description. 

US support in terms of equipping and training is still focused on a Baghdad-centric model, where all efforts must be sanctioned and approved by the Baghdad government via the Ministry of Defense, a source of frustration in the KRG and among Sunni tribal leaders, who would prefer direct US support (equipment and training) outside of Baghdad oversight.  This frustration is partially due to the bureaucratic slowness of Baghdad in deploying armaments, but also due to the perceived poor history of Baghdad in equipping KRG Peshmerga forces and sustaining the Sunni ‘Awakening” or Sawah forces established by the US during 2007-2010 that played a key roll in rolling back Al Qaeda.   KRG frustration at facing ISIS forces armed with modern American weaponry including tanks and armored vehicles seized from Iraqi security forces, when they have received relatively little American armament from Baghdad since 2003, is extreme.  Shia leadership, given the lack of trust I mentioned before, is vehemently opposed to direct arming of Sunni or KRG elements against ISIS outside of Baghdad’s control.   

The new government appears committed to rebuilding indigenous security forces in Sunni areas.  It is essential to long term stability.

5. The war must be having an affect upon the Iraqi economy and the view of foreign investors about whether they want to do business in the country. Can you comment on the economic impact the war has had?

The economic impact of ISIS territorial seizures in 2014 was significant.  Legitimate trade routes from Turkey and Jordan were largely cut off.  Cargo movement from the southern ports to Kurdistan was cut off.  Cargo imports to Iraq fell dramatically as the overall economy began to contract in early 2014 with the collapse of security in Anbar, energy sector development in the south was hindered as international companies pulled workers out of Iraq.  Even though violence was far removed from southern oil fields, many companies working in the south withdrew at least temporarily, through the transition of the Baghdad government last fall, and some have yet to return.  Economic progress in terms of GDP growth stalled, which is now greatly worsened by collapsing oil prices.

In my opinion the most unfortunate impact has been to the Kurdistan Region.  The KRG leadership had, more than any other group, worked to maximize the benefits of peace and stability, fostering a popular international view of Iraqi Kurdistan as the ‘one safe place’ to operate and invest in Iraq.  While our private investment is primarily in Basra, the progress in the KRG since 2003 has been remarkable – cities such as Erbil, Sulaimaniyah, and Dohuk are modern urban centers with infrastructure on par with any cities in the region outside of the UAE and Qatar. 

The encroachment of ISIS into Kurdish territory and near approach to Erbil last summer damaged the perception of safety in Kurdistan.  Multiple daily flights to Europe and the GCC have been curtailed, and many international companies suspended operations.   

On its face it makes no sense – many companies including international energy companies were active investors in the KRG prior to last summer.  It took ISIS encroaching on KRG territory to finally trigger a US military response to ISIS – something that was by no means certain given the ‘hands-off’ stance the US had taken with ISIS prior to its movement into Kurdish territory.  If anything, Iraqi Kurdistan should now be a more attractive investment destination given the clear signal by the US that further ISIS territorial gains were not going to be tolerated.  But that is not the logic that has seized western and international investors – too many of whom have disengaged since last summer.  Reversing this is absolutely critical to the long-term growth and continued stability of the Kurdistan region and northern Iraq.

Finally, the KRG has faced a humanitarian crisis exceeded only by the catastrophe in Syria, with hundreds of thousands of Christian, Yazidi, and Shia refugees from Ninewa province now sheltered in Dohuk and Erbil.   It is a tragic situation that further strains the economic capacity of the region.

6. Iraq is also facing a major budget crisis with the fall of the price of oil. What has that money crunch along with the fighting done to development projects?

Iraq needs a per-barrel Brent crude price of around $85 for the national budget to break even, given the failure of Baghdad to streamline the government bureaucracy, compounded by increases in the government payroll over the past several years.  The failure to diversify the Iraqi economy since 2011, and the collapse of progress to transitionally privatize state owned enterprises and draw foreign investment after the disengagement by the US in 2011, has left the Iraqi economy woefully over-dependent on oil production.  At current prices around $50 per barrel for Iraqi crude, Iraq has a major budget deficit and has curtailed almost all capital spending.   Non-oil-sector development projects are largely stalled now, given the shortage of cash to finance continued construction. 

This unfortunate situation is causing an overdue liberalization of the Iraqi economy, and will cause the new government in Baghdad to take overdue necessary steps to develop non-oil sectors of its economy.  But those steps do not happen quickly, and the impacts take years, not weeks or months.  Iraq has tremendous potential in many sectors including agriculture, tourism, light and heavy industry, and of course oil & gas.  But there has been far too little progress in these areas outside of religious tourism since 2011.  For those willing to endure the current period of renewed difficulty, there is still great long-term economic potential in Iraq.   In the short term, layoffs are occurring in areas that were prospering such as the south due to oil price collapses and associated short-term suspension of infrastructure development as well as projects in the oil fields.  The resulting unemployment in Shia areas will increase the pressure on a new Iraqi government at a time of great instability. 

7. What many people outside of Iraq are probably missing with all the news about the country is that the violence is pretty much contained to the center, while the north in Kurdistan and the south have been largely untouched. What is it like in those parts of the nation that are not directly caught up with the insurgency?

Violence is mostly contained to the non-Kurdish north, and the west, and until recently the center.  The militia efforts near Baghdad have greatly reduced the risk of ISIS seizing territory in the capitol city, but the suffering experienced in Anbar, Diyala, Kirkuk, Salah ad Din, and Ninewa cannot be overstated.  These are, territorially, major land-masses within the Iraqi state where a human toll of suffering and oppression is taking place daily. 

Violence in Baghdad is still part of daily life, with a weekly toll of killings and casualties that we seem to accept as normal now.  These acts of violence reach even into seemingly secure parts of the city – I was in the Karrada district, a prospering, relatively secure neighborhood, just two weeks ago when a major bombing took place targeting a Shia mosque, killing five and wounding a dozen more.  It merited barely a blip in the media coverage of regional affairs. 

Thousands of Iraqis from the south have traveled north to join militias and regular security forces in response to Sistani’s call, and many have died fighting ISIS. 

What one really feels in the south among the general population is a frustrated sense of loss at the missed opportunity of the past decade, and a desire to get beyond sectarian violence and knit the country back together.  The people in the south know that, for the first time in their history, the Shia majority had the chance to rule and were given all the tools necessary to build a prospering state, and that successive Iraqi administrations have squandered the opportunity.  That is a source of bitter frustration among the people in the south, bitterness at regional countries for constant interference and support for violent extremists, and bitterness toward the US for departing – an irony given there was little to no Shia support for a continued US presence in 2011.

With that bitterness comes the usual conspiracy theory mentality that seeks to blame everything that goes on in Iraq or the region on the mighty ‘hidden hand’ of American master strategy – something that deep down they know is not true, but on its surface provides relief from facing the reality that Iraq has so far missed a golden opportunity to become a stable, prosperous, leading regional country at a critical point in history.  As Iran is now ascendant in the region, with the imminent expected lifting of sanctions, that opportunity for Iraq may have passed.

8. You first became involved in Iraq in 2006 when the Pentagon asked you to create the Task Force for Business Stability Operations. How would you compare the war when the U.S. was in the country to today, and how do you see the fight progressing?

After the well documented mistakes of the early US occupation, an insurgency took hold that evolved into the presence of Al Qaeda, and only through a concerted sustained effort by US commanders and diplomats to involve the Sunni population in governing their own affairs and managing their own security was the US able to roll back Al Qaeda and establish relative stability. 

We have now seen history repeat itself in our absence since 2011.  The current use of Shia militias as the ground forces to begin to roll back ISIS has been expedient, but cannot deliver long-term stability in places like Tikrit, Fallujah, Ramadi, or Mosul.  This cycle of insurgency, violence, depredation, and renewed insurgency will repeat itself until a governing structure that provides relative autonomy and access to opportunity is put in place that the Sunni population can buy into, and a Sunni leadership emerges that accepts the reality of shared power in Baghdad.  That structure does not yet exist.  Until such a structure is put in place it is impossible to be optimistic about Iraq’s future as a coherent state, or even as a decentralized federal ‘UAE’ like entity – a more workable outcome if the political will existed in Baghdad to create such a structure.  The trust necessary to create that structure does not exist today, and it is hard to see that changing soon.

9. Finally, what lessons about Iraq can you impart after all the time you have spent working there?

There are any number of tactical lessons learned in terms of post-conflict economic development and how to create economic progress in areas that are emerging from violence.  Many of those lessons were learned the hard way, making mistakes and learning from them, over five years.  These are discussed in detail in War Front to Store Front. 

But having been actively engaged in the Middle East since 2006, in an official role and as a private citizen, the most important lessons are strategic and it is not at all clear that we’ve learned them.

Since 9/11, US policy in the region has been focused on the notion that establishing democratic institutions via elections among oppressed and underdeveloped populations will lead to stability, and reduce the appeal of radical Islamist movements. 

But democracies emerge from the presence of a vibrant middle class – an economically prosperous majority of a population that has a stake in stability and that demands a seat at the table in governing their own affairs.  Throughout history it is almost impossible to find a successful democratic state with liberal institutions that lacks a vibrant middle class as a foundation on which democratic governance rests.  American democracy is no exception – our institutions today would not survive without our own generally prosperous middle class.

Our foreign policy continues to ignore this necessity, in spite of repeated failures in efforts to establish democratic government via force (Iraq, Afghanistan, Libya), diplomacy (Sudan), or shifts in alignment of strategic support (Egypt) away from a former dictatorial ally.  We still believe that elections are the primary building block to a stable prospering society.  If there is one lesson we must learn, it is that fostering broad-based economic development is foundational to liberal institutions, and without that economic foundation, efforts at democratization are a waste of effort that leaves human tragedy in its wake.  Until progress is established in economic development and associated beneficial social structures including education, nutrition, and basic healthcare, having elections is a gateway for radical elements to seize power among downtrodden frustrated populations.

As idealistic Americans it bothers us to accept this, but it is a reality we must accept – we can seek to foster development of liberal government and democratization, but only in concert with economic strategies that create middle class dynamics to support those institutions.  A broader discussion of this is provided in War Front to Store Front.

Finally, it is interesting to look at our policy in Korea in 1953.  By late 1952, the Korean conflict was an unpopular war here at home, contributing to the lowest Presidential approval ratings in history to-date when President Truman left office.  In spite of the unpopularity of the war, the Republican successor (Eisenhower) to the Democratic President Truman chose to leave a sizeable contingent of US troops in South Korea where they remain to this day.  Through decades of poverty, dictatorship, eventual economic development, and now vibrant democracy, America held fast with South Korea, even when vocal segments of the South Korean population and surrounding countries vehemently opposed our continued presence. 

Contrasting that to the decision to withdraw from Iraq in 2011 in spite of the strategic risks leaves us facing a stark reality. As Americans, we chose to invade another country and break down all elements of its governing structures, then rushed to hold elections in the hope that we could extricate ourselves from the ensuing difficulties.  The price for both the US and for Iraq has been extreme.  American willingness to sustain long-term effort in our strategic interest when we make mistakes in foreign policy has fallen victim to partisanship and short-term thinking.  The decision to invade Iraq in 2003 was clearly, in 2015 hindsight, a mistake.  The decision to withdraw in 2011 after recovering from that mistake and creating relative stability and new governing structures was equally mistaken. 

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