No More Charity: Making Iraq's Economy Work

One of the words commonly used during the final years of Saddam Hussein’s rule is “makrama”, which translates to “the noble deed”. The term is sometimes used ironically and the former dictator excelled in “noble deeds” during meetings with supporters. His aim was always bribery and the purchase of loyalty. But this tradition didn’t end after 2003, with the fall of Hussein’s regime. It seems that the new, emerging Iraqi state continues to take the same approach. It just uses a different term for it: the “social benefit”.

Over the past few years the amount of money set aside for social benefits and allocated to three different parts of the Iraqi government – the president, the prime minister and parliament – has allowed Iraqi politicians to distribute funds to individuals and organizations close to them, helping them gain support and to polish their public images.

There were no real rules on how the funds for social benefits should be spent. For example, after a bomb explosion, senior government officials might well visit victims and donate money to their relatives; in some cases they might offer free treatment to victims. Usually, these visits are well covered by private and state media to show the beneficence of the government officials.

Politicians tended to avoid any mention of the amount involved in social benefits. Former Iraqi Vice President Adel Abdul Mahdi admitted to al-Sumaria TV that he had around US$1 million at his disposal every month, for social benefits. In total, he said, there was US$11 million a year that could be “paid to people in emergencies”.

Of course, nobody can deny that the state is duty bound to care for victims of terrorism. But the problem lay in the way those social benefits were distributed. The relevant government official usually allocated the funds personally and the payments were seen as “noble deeds”, just as they were in Hussein’s day.

Over the past few years, as the country’s oil revenues have increased so did this practice. However in February 2011, Iraqi parliament voted to abolish social benefits from the federal budget. The decision had more to do with voter pressure than political will. Iraq’s prime minister, Nouri al-Maliki, had repeatedly expressed reluctance to abolish the social benefit funds and has even called for them to be reinstated. In a statement al-Maliki made in mid-June this year, the Iraqi leader said: “the prime minister, president and parliamentary spokespersons and MPs need these funds when they meet the public.”

Rentier Symptom #2: Ration Cards More Unnecessary Charity

The ration card is another example of how the Iraqi government is seen as distributing largesse. The ration card system was instituted in the early 1990s by Saddam Hussein after international sanctions were imposed on Iraq following the country’s invasion of Kuwait. Hussein did this in an attempt deflect popular anger when living conditions deteriorated in the wake of those sanctions.