Is Iraq Reverting to Square One?

By Tariq Abdell, Founder & Chairman, Mesopotamia Insight.

Iraq's recent upsurge of violence, fueled by political impasse and regional geopolitics - Notably Iran's Mullacracy suicidal ambitions, could easily undermine its fragile democracy and, thus, plunging the country into a vicious downward spiral. The ongoing ignominious political ploys are creating a toxic environment compelling the majority of the Iraqi people to distrust the legitimacy of their government and its institutions, a dangerous threshold that could hastily throw the country back into its darkest years of lawlessness and sectarian violence (06 - 07) or "Square 1" as Mr. Al-Maliki depicted in his recent interview with the New York times.

Mr. Al-Maliki's decisive victory against the militia in early 2008 "Charge of knights" operations had helped the country recover some of its pride and hope. Moreover, this critical milestone was followed by more ambitious and bold steps triggering, in the process, a major shift in the country's mindset and priorities (security is no longer theme du-jour, for instance). Iraqi people gradually began to dust off some of the hefty residues of the sectarian violence and look optimistically beyond security constraints. Sustained by an abrupt rise of the oil prices (over $100 a barrel), jobs creation and rebuilding were the nation's number one priorities; these positive developments were met with positive reactions (political will) from the international community, which was translated into a massive influx of foreign investors including international oil companies probing for business opportunities. Consequently, the Iraqi government began to harvest the fruits of its hard work, and Mr. Al-Maliki' s party (State of law coalition) was awarded with an unanimous victory in the 2009 provincial elections.

Regrettably, Iraq's political infighting and violence, hitherto, are an imminent threat to its long-term stability and unity, and as Abraham Lincoln once said "a house divided against itself cannot stand". Furthermore, Iraqi politicians have, unsurprisingly, failed to live up to the expectations of their constituents merely of their self-serving agendas and inability to fathom the interdependence and impact of political instability, insecurity, and economic underdevelopment on the country's future. The absence, thus far, of a democratic and accountable government (mirroring the will and the aspirations of the Iraqi people) has created a power vacuum that is stalling the country's institutions and, subsequently, jeopardizeing its highest interests for generations to come.

Despite its vast natural resources ( billions of oil and natural gas reserves), Iraq is still lagging far behind many developed countries - that once surpassed - as result of decades of wars, sanctions, and political instability; hence, Iraq's economy is in desperate need of major structural reforms (e.g., investment law, hydrocarbon law). The Economist Intelligence Unit graded Iraq CC- in its credit ratings - Somewhere next to Sudan and Zimbabwe. For instance, investors, international oil companies, and private businesses are still facing a host of frustrating and hindering issues: Corruption, bureaucracy, lack of transparency, extortion, inconsistent customs procedures, visa problems, etc... Hence, in order for Iraq to overcome these challenges and join the 21st century, it must institute a conducive and transparent business environment compatible with its new constitution, consequently, attracting foreign investments, necessary capital, and greatly needed technological know-how, that is susceptible to resuscitate the country's weakened economy, create jobs, and, ultimately, improve the well-being of millions of its disenfranchised citizens.

Fortunately, giving the current black gold rush, Iraq is well positioned as ever before to become the modern days El Dorado - Giving emerging markets insatiable appetite for energy resources- if it succeeds in rebuilding its political capital and enhancing the operational efficiency of its institutions.
To this end, Iraq must renounce its sectarian-based policies, political violence, and espouse an inclusive democratic system that embraces and protects the country's diversities (UN Universal Declaration of Human Rights). Thus, the new government's long-term strategy should entail an action plan that reflects the country's top priorities and the people aspirations:

  • National reconciliation to overcome the sectarian and political violence.
  • Overhauling of State's weak and inept institutions to rein in corruption and enhance efficiency.
  • Providing access to basic services (e.g., drinking water, electricity, and running sewer)
  • Advancing the principles of Human Rights and the Rule of Law.
  • Investing in education: Higher illiteracy levels are a serious challenge to the country's future.
  • Creating jobs: Higher unemployment could be a source for societal and political unrest.
  • Revive the country strategic industries to curtail its dependence on petrodollar.

To this end, national reconciliation is an absolute imperative to stave off sectarian violence, political instability, and, most importantly , the collapse of the State's institution. Conversely, we might have to echo Mr. Al-Maliki saying, “We thought we had gone further in eradicating sectarianism than reality has shown.”(New York Times interview). Alas, for as in years to come will prove, undeniably, that both the country and its future generations will pay dearly for these injudicious choices.

The opinions expressed here are those of the author, and do not necessarily reflect the views of Iraq Business News.

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