Tag: Iraq

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Economics Oil and Gas

What Could Iraqis Gain from Their Oil Windfall?

After a full year of political stalemate and fierce power struggles, Iraq’s ruling elite have finally managed to form a government led by Mohammed Shia’ al-Sudani. Thanks to the surge in international crude oil prices, Sudan’s new government has inherited a rather large oil bonanza, with the potential for huge revenues if handled well. However, the government’s ability to properly invest in this opportunity, taking into account its development and reform plans, is highly questionable due to the very political settlement that gave birth to the new government.

Locally known as the ‘Muhasasa’ system, this settlement dictates the ethno-sectarian power-sharing divisions that have plagued the Iraqi government since 2003. Indeed, the system is widely blamed for rampant corruption, structural imbalances, the weakening of state institutions, and the failure of the government to deliver services to the Iraqi people. Case in point, the national poverty rate in Iraq is above 25%, and the unemployment rate is higher than 14%.

Given the outcomes produced by the Muhasasa system in the past, it seems unlikely that Sudani’s government will function any better than its predecessors or be fully able to seize on the oil market windfall to improve Iraqis’ welfare instead of further enriching the ruling elite. As was the case in 2008, Iraqis will miss out on this opportunity to address some of the country’s most pressing concerns unless the government can tackle several key economic and political barriers. 

Nevertheless, the rising oil revenues provide great resources to address Iraq’s dire needs to improve its infrastructure and enable a safer physical environment. Both are preconditions to revitalizing the country’s undeveloped private sector and ultimately diversifying its oil-dependent economy. 

The Oil Bonanza and Iraq’s Structural Challenges

Iraq’s federal government is expected to gain $114 billion USD in oil rents by the end of 2022, a clear spike from $75.651 billion in 2021 and $41.948 billion in 2020. The government’s additional cumulative oil revenues in 2022—without independent oil sales from the Kurdistan Region of Iraq (KRI)—is expected to reach $38 billion USD. Moreover, the previous government in Iraq was able to achieve fiscal surpluses in 2021, and the country’s GDP growth is projected to reach 9.3% in 2022, up from 3.6% in 2021 and significantly higher than the projected global average growth of 3.2%. The government’s current account has boosted gross international reserves of the Central Bank of Iraq to $94.6 billionUSD, the highest since 2003. 

Lacking any active sovereign wealth fund—one of the means through which other regional oil rentier states manage surpluses—however, the rising oil revenues have generated many debates and arguments among Iraqis as to how these revenues can best be deployed. On the one hand, populist MPs and political blocs are focusing on the distributive side of Iraq’s import-based economy. These figures argue for a depreciation of the value of the Iraqi Dinar (IQD) in a bid to reduce inflation and increase purchasing power of low-income citizens. On the other hand, many economic experts have warned about the danger of devaluing the IQD. 

A higher IQD value would raise production costs for Iraqis, while reducing domestic goods’ competitiveness in favor of cheap Iranian and Turkish imports. The devaluation would also undermine the country’s macroeconomic stability and cost the Iraqi government at least $15 billion USD given that the government sells its crude oil (about 99% of all the country’s exports) in USD while accruing most of its expenses in IQD. Therefore, keeping the foreign exchange rate at its current level is necessary to preserve macro-stability and best facilitate using the oil revenues on upgrades for services institutions, infrastructure improvements, and foundational economic reforms to tackle the country’s structural imbalances. 

No matter how the debate ends, transforming this opportunity into truly constructive outcomes will require a lot of work from the Sudani government—a government supported by the Iranian-backed Coordination Framework. Already, this government is enduring constant demands for an increase in investments in the country’s underdeveloped infrastructure and dysfunctional service institutions. Iraq’s meager private sector desperately needs to be revitalized, and its oil-dependent economy needs to be diversified. 

Likely the best way to spend these oil revenues would be to fund neglected public infrastructure projects. More than 1,450 public projects—including hospitals, roads, schools, bridges, and more—have been halted due to a lack of funding, corruption, and bureaucratic impediments, with many lying abandoned since the 2014 financial crisis. Funding these projects would further enhance service institutions, improve the business environment, and ultimately stimulate the private job market. 

In addition to these usual challenges, water scarcity and drought have exposed Iraq to a new set of crises. Ranked as the fifth most vulnerable country to climate breakdown, Iraq’s loss of water from key rivers, including the Tigris and Euphrates, might turn vast areas of the country into desert. Government officials estimated losing 50% of Iraq’s water reserves from 2021. Environmental degradation and poor water management pose grave threats to the sustainability of food security for Iraq’s 42 million citizens. 

Internal displacement, loss of livelihood, and excessive urbanization—all connected to these environmental issues—have emerged as new domestic crises. Water scarcity also raises significant questions about the capability of the Sudani government to safeguard Iraq’s agriculture, which employs one-fifth of the country’s labor force without concurrently addressing the country’s water management issues and limited water flow from Iraq’s riparian neighbors. 

Pathways Forward

Even if Iraq’s new government decides to break from the status quo, how Sudani and his cabinet will actually respond to ongoing challenges remains the hardest question to answer. If they want to spend the funds of the oil bonanza on development, perhaps Iraq’s lauded but unimplemented 2020 White Paper for Economic Reforms can serve as a blueprint. This report provides a clear vision about how to tackle the country’s most dire economic challenges, from its bloated public payroll to poor water management and national power shortages. 

Starting with the 2023 budget law, the new government can take serious steps in the right direction by scaling up infrastructure investments, upgrading service institutions, and removing barriers to private sector development. These efforts would lay the foundation for even more structural reforms.

Moreover, activating Iraq’s sovereign wealth fund (SWF) would help in properly saving and utilizing the oil revenues. The SWF is set to deposit 1% of the country’s oil rents in order to build up cash reserves for future generations and create buffers to withstand the shocks of international oil price fluctuations. Since crude oil accounted for 99% of Iraq’s exports, 85% of the government’s budget, and 42% of the country’s GDP over the last decade, this shock protection is crucial. The SWF’s potential deposits could also be used to finance renewable energy projects, addressing the chronic power shortages that Iraq has faced since the 1990 Gulf War. Nevertheless, the sad reality is that the government is unlikely to move forward on any of these reforms.

Mounting Challenges and No Proper Equipment 

The Sudani government likely lacks the tools to handle the myriad obstacles on their path to implementing such investments effectively. Rampant corruption and anticipated intra-elite conflicts—especially between followers of Shia Cleric Muqtada al-Sadr and the Coordination Framework—are some of the largest of these hurdles. The fear of wasting Iraq’s oil windfall to intra-elite conflicts is not entirely outlandish. Just months ago, Sadr’s followers stormed the Green Zone and caused immense political paralysis in the wake of Sudani’s initial government formation, and they are likely poised to do so again if they feel that they are being snubbed by the new government. 

Nor would it be the first time that Iraq’s oil rents were fraudulently used up in the last two decades. The most recent manifestation of this country’s endemic corruption was the disclosure of a 3.7 trillion IQD embezzlement scheme (about $2.3 billion USD) which took place over the last fourteen months within the state-owned Rafidain Bank via a network of public officials and five shady companies. Despite rhetoric claiming otherwise, Sudani’s government is expected to sustain Baghdad’s ‘business as usual’ approach to the corruption of the ruling elite unless grass root pressures resurface to combat corruption and back reformist forces within and outside the government. 

Just as its predecessors did, Sudani’s government is likely to try to pump up the economy through the oil windfall before the planned snap elections in late 2023. If reformist forces, NGOs, and media join together to pressure the Iraqi government to allocate part of the oil revenues to public infrastructure investments, most Iraqis will be better off. Here, the 2023 budget law is a golden opportunity to focus on key services sectors such as education, health, and electric power rather than increasing military and security expenditures. 

Obviously, it is not easy to balance the demands of the ruling elite that back Sudani against the needs of the millions of Iraqis who took to the streets to demand better governance. Sudani’s trade-off is whether to appease the ruling elite or increase infrastructural investment to deliver better services and revitalize the private job market—passing on part of the oil revenues to the low-income citizens who work in the informal economy. Failure to handle this trade-off would expose his cabinet to the previous governments’ challenges and likely prompt a return of civil unrest that has roiled the country in previous years.

The Article is published first by Fikra Forum of Washington Institute.

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Categories
Politics

Airstrikes Strengthen Iranian Backed PMU Groups to Weaken Iraqi Government

On September 14, 2019, Iraq’s Ministry of Defense Spokesperson Brigadier Tahseen al-Khafaji, issued a public announcement to state that all weapons of government backed Pubic Mobilization Units (PMU), mostly Shiite armed groups, are stored in the ministry’s warehouses. The statement came after PMU’s bases and arsenals faced mysterious airstrikes in four locations inside Iraq in the past two months, and various sources accused Israeli drones of conducting the attacks. This is how Iraqi government is trying to prevent the PMF from embroiling Iraq to a regional conflict that Iraqi leaders are keen to stay away from it. So far, the airstrikes and the whole regional conflict seem to strengthen the Iranian backed PMU groups at expense of Iraqi government. This article is trying to show how internal dynamics in Israel and within PMU played out to weaken Iraqi government and strengthen Iranian backed PMU groups that are willing to take a side in the Iran’s regional conflicts.
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The airstrikes, not surprisingly, divided PMU leaderships reactions. Deputy Commander of Iraqi Government’s PMU Commission Abu Mahdi al-Muhandis rushed to accuse US forces in Iraq of cooperating with the “Israelis’ attacks”. He also called on to defend PMU bases by the weapons available for them. Nevertheless, consistent with the Iraq’s formal response, chairman of the PMU Commission in Iraq Faleh al-Fayyad stated that the Muhandis’s statement does not represent views of the Iraqi government, nor the PMU. Again, beyond Iraq’s formal leadership, later on 22nd August a leading Shia Cleric Ayatollah Kazem Husseini Haeri issued a public religious Fatwa to forbid the presence of US troops and advisers in Iraq. Haeri, an Iranian citizen based in Qum and followed by many Iraqis, stated, “I declare from the position of religious responsibility that the presence of any Americans military force in Iraq is forbidden under any title: military training, advice or the rationale of fighting terrorism. This is what I have confirmed to you before, and today I have confirmed it again in clear words.”

Omer Kadhim
Omer Kadhim

is political Since student and intern researcher at ICPAR.

Author

Iraqi Institutions and PMU Influence

PMU branches such as Badr, Asay’b Ahlulhaq, Kataib Al-Huzb Allah, and Saraya Tali’a Al Khurasani publically swore their allegiance to Iran. They recruited more than 150 thousand volunteers to defeat ISIS, but with the end of the ISIS war, they formed a political bloc to participate in the 2018 elections i.e. Fatih Alliance which won 48 out of 329 seats. This upgraded their position from mere militias into a major political force within the Iraqi political arena. Currently they have large stakes in Iraqi government; they are second largest bloc in parliament, and salaries equal to formal Iraqi security forces. They also benefit much of the corrupt illegal an underground business that are conducted by conventional militias in Iraq, especially in liberated areas taken back from ISIS. They function as a separate government within the Iraqi Government, and they spread their influence to delegitimize the Iraqi institutions step by step.  
In the formal level, the Iraqi Government wants to avoid becoming a part of any conflicts caused by PMUs, so it started integrating them within the Iraqi army and under the control of the PM. However, in reality, Iraqi Government is weak and unable to control them, and now they are in between two bitter choices. Either fully dissolve the PMU forces, which is impossible, as PMU is the main bloc, which formed the government, or totally separate the Iraqi institutions from PMU, which will set the biggest question about the legitimacy and control of the Iraqi Government over the country and its security. Currently, the situation is choosing the third option, which is a mixture of attempting to control the PMU forces and dissolving them within Iraqi armed forces. This will risk Iraq’s involvement in the case of any regional conflict. Iraq’s major officials are desperately trying to manage the situation, and they are without any real choices to control the PMU forces nor the regional powers. PM Adil Abdul Mahdi, President Barham Salih, and the Parliament Speaker Mohammed al-Halbousi held a meeting after the attacks to ensure that Iraq’s formal institutions are in charge of any necessary measures needed in order to handle the attacks on PMU bases, insisting on keeping all military decisions under control of PM Abdul Mahdi. It was a clear sign to assure that Iraqi government would not be responsible for any reckless retaliation from the PMU forces. 
All these conflicting stances show Iraq’s vulnerability amid the heated regional tensions, while the ongoing situation will continue to weaken the Iraqi institutions and the government legitimacy and control over the Iraqi affairs. Any direct conflict between Iran and Saudi Arabia will drag Iraq in to the heart of the confrontations. News outlets closed to Saudi Arabia reported that drones attacked Aramco oil facilities came from Iraq and not Yemen, as it was claimed from the beginning. However, top Iraqi officials denied their country’s territories have been used to attack the Saudi’s oil installations. 
Iraqi Government is trying to avoid involving into any regional conflict and take the same distance from all sides. However, its lack of control over some of the PMUs, which are supporting Iran in its regional conflicts, will not make Iraq just a part of the regional conflict, but it will create opportunity to consider Iraq as a target for proxy conflicts. While the periodic attacks such as those coming from Israel are expected to continue, that will continue to consolidate positions of the Iranian backed PMU groups while weakening the Iraqi Government more and more through time. 
Besides, the airstrikes destroyed weapons and missiles that are quite replaceable by Iran and its proxies. They have not reduced their combat capacity that mostly depends on military manpower rather than new military technology.  They only changed the Iranian backed groups to national heroes and embarrass the Iraq’s government officials and moderate national Shiite leaders who want to keep Iraq away from Iranian sponsored regional conflicts. The extreme elements of the PMU will succeed in controlling and directing the upcoming events because they will capitalize on Iraq’s sovereignty, which has been attacked, and sectarian language, which is still very effective within the majority of the Iraqis. 

Tracing Israeli Airstrikes in Iraq 

On June 7, 1981, Israel launched the Opera Operation, an air strike with a squadron of F15 and F16 fighter jets, targeting an Iraq’s nuclear reactor and completely destroyed it. The Iraq’s nuclear program ended with the operation, and Israel had no incentive to invest in a military conflict with a country that they do not share borderline with it. Later, Saddam Hussein’s regime never posed any real threat to Israel. Iraq drowned itself in costly regional wars, from the eight-years Iran-Iraq war, to the invasion of Kuwait, and then the 2003 US invasion of Iraq, which ended the regime. The 2003 regime transformation permanently changed the calculus of Israeli-Iraqi relations. Although post-invasion Iraqi government did not rush to normalize relations with Israel, yet the modified government regime of Iraq’s post 2003 was more conciliatory with the acceptance of Israel as a fait accompli and possibly considering the eventual establishment of relations with it.
The long military silence in Israel-Iraq relations came to an abrupt end in the past two months when the Likud government, led by Benjamin Netanyahu, targeted the PMU’s bases in Iraq. The start was on July 19 when an explosion targeted a PMU’s base in Salah al-Din province, north of Baghdad. Later, on August 12th, another explosion destroyed a PMU’s arsenal near the Saqr Military Base south of Baghdad. Last but not least, explosions hit a weapons storage facility near Balad Air Base, 80 km north of Baghdad. Officials say that it’s been used by Iran to move weapons to Syria.

Likud’s History Policy in Attacking Iraq

Israel’s Likud party has a long history in externalizing its crises by attacking Iraq. At the beginning of 1981, Likud Prime Minister Menachem Begin knew that he would face a very difficult battle to retain his position during the elections, scheduled for mid-year. In fact, Likud’s expectation to win the election was very low. After the June elections, with the expected fierce competition from the Labor Alliance led by Shimon Peres and Yitzhak Rabin, the ruling Likud was suffering from widespread internal strife, corruption allegations, and international pressure over the ongoing skirmishes of Israeli planes on Lebanon at the time. This internal Israeli dynamic could be a perfect setting for the 1981 airstrike. Likewise, similar internal crises are affecting current Likud leader Benjamin Netanyahu’s decisions and incentives to widen his country’s war with Iranian proxies to reach Iraq. 
Although Israel has not publicly claimed responsibility for the recent attacks, Netanyahu, like Begin, did not mind taking some credits for the recent operations, especially as he finds himself caught with corruption charges few weeks before crucial elections. This was particularly evident in the way Netanyahu responded when asked if Israel could strike Iranian targets in Iraq. He gave his security services the green light “to take any action necessary to thwart Iran’s plans. It will not grant Tehran immunity anywhere,” He said. If Netanyahu’s indirect remarks left some doubt, the leaks of US officials who spoke to the Wall Street Journal clearly showed Israel’s responsibility for the July 19 attacks in Salah al-Din.
Netanyahu sees Iran and its proxies as the greatest threat to Israel’s existence, which is not unrealistic taking into account the active role Iranian backed groups in the region play against Israel. Wars and Arab Spring upheavals devastated political structure of several Israeli neighbors and turned them into dysfunctional systems that can not protect their own sovereignty and security. This situation also made it much easier for Iran and its proxies to confront Israel regionally on many fronts. In the past two years, Israel has conducted more than 200 attacks against Iran and its proxies in Syria, Lebanon, and Iraq, countries that have formed a geographical barrier to prevent a direct war between Tehran and Tel Aviv in recent decades.

Risking the Iraq’s Relative Stability Ends with a Lose-Lose Game 

Iraq is quite affected by the Iran’s regional conflicts with Israel, the US, and Saudi Arabia. Its shared borders, culture, religious believes, and weak institutions have put it in the weakest position of all the regional tensions. When deputy commander of the PMU Commission Abu Mahdi al-Muhandis, on September 5th, 2019 issued an order to establish PMU’ “air forces” in response to the recent airstrikes, powerful Iraqi Shiite cleric and politician Muqtada al-Sadr tweeted that it was an announcement to “the end of Iraqi government.” Al-Sadr, who is the founder of the largest block in Iraqi parliament Saairun Alliance, started his tweet by “Farewell my country,” and he expressed his concerns over undermining Iraqi government’s authorities. “This is a change from a state ruled by law to the state of chaos,” as he said.
The concerns are related to existing systematic approach, which will weaken Iraqi army and formal security forces, while using state resources to strengthen PMUs and turn them into a second version of the Iranian Revolutionary Guards (IRGC). Iraqi military sources revealed that the PMU had submitted a request to the Joint Operations Command to establish their own air force under the pretext that the Iraqi Army’s air defenses did not protect its arsenals and bases from the recent airstrikes.
Prior to this order, the Iranian backed PMU organizations accused leader of Anbar’s Commander of Operations Major General Mahmoud al-Falahi of communicating with foreign parties and providing coordinates of the Iraqi Hezbollah bases’ locations. Even though the accusation was officially rejected by the Iraq’s defense ministry, Al-Falahi was removed from his position in a step that was described “to be a trial to please the militias” and a blow to the Iraq’s defense military. Two months later, Col. Brigade Naser Al Ghannam was appointed as the commander of operations in Anbar, which was considered as a victory of the militias. 
The Israeli airstrikes and the Iranian backed PMU groups’ responses have achieved nothing except undermining of Iraq’s government, army, and security institutions. This is a perfect lose-lose game for both, the US and Iraq, which have invested a lot to help Iraq’s army and security forces overcome their challenges during ISIS war. 
Take into account still active ISIS’ insurgency in various Iraqi areas, the Israel-Iran conflicts further threaten regional political and security arrangements. Iraq has not recovered from its war against ISIS, so using it by either Iran or its enemies will backfire and end up with terrible consequences that may again destabilize the whole region, like what happened in 2014, when the fall of Mosul strengthened ISIS to the level of challenging the entire international community. 
The Iranian regional conflicts, which have invited the Israeli airstrikes, so far just sidelined Iraqi government and its legit leadership and commander of security and armed forces in dealing with the Israeli air strikes and any outside threats. Iraq’s instability directly affects Iranians’ security and economic interests. Moreover, it is going to increase the risk of growing ISIS insurgency, which will again cost lives of thousands PMU volunteers. Nobody can benefit destabilizing Iraq as much as ISIS and its remained insurgents. 
Both the United States and Iran should understand the fact that everyone will lose what has been achieved in fighting ISIS and stepping towards stable Iraq if they will not control their confrontations and limit their interventions in Iraq. The US administration can prevent the Israeli attacks and push them to fight the Iranian proxies outside of Iraq. Iranians, of course, can control their proxies in Iraq and get them to obey the Iraqi government. The both sides will lose more than what they might win in turning Iraq into battle field for their endless regional conflicts.

Categories
Economics

Group Grievances and Military Expenditures Raise Together in Post-Saddam Hussein Iraq

Iraqi governments spent more than (58.2) billion USD as military expenditures (ME) from 2007 till 2017, according to World Bank Group’s data. 

The issue is not to say that this ME is too much compared to government expenditures in other sectors like education and health; it was actually not spent in a way that could guarantee the country’s stability. Therefore, as the ME raised the level of group-grievances increased. 

The data sets of Fund for Pease’s Fragile States Index‪ (FSI) and the World Bank Group simply show that the country is facing challenges that can’t be addressed only by increasing ME. The risen defense spending just added more grievances to Iraqi people instead of reducing it.

Mohammed Hussein
Mohammed Hussein

is policy director and political-economy analyst at ICPAR. He holds a master’s degree in specialized economic analysis: Economics of Public Policy, from the Barcelona Graduate School of Economics.

Author

It might not be easy to find out whether the risen ME caused more instability, or it is just the other way around since there is a strong relation between the both; however, it is clear that lack of adequate governance and failed political elites generated the both; consequently, they contributed to the risen group-grievance since the spending was mostly used in internal conflicts.

‪The Iraq’s internal conflicts, since early 1960s, have been outcomes of failed political elites and authoritarian regimes. They were results of political miscalculations, bad resource management, and authoritarian regimes. Autocrats were consolidating their power on behalf of a certain group and simply suppressing other groups of Iraq’s diverse communities; therefore, the country’s ethnic, religious, and political groups were manipulated and pushed to support political parties and leaders that were fighting, competing, and struggling over power, natural resources, and territories. The trend gradually fractionalized Iraqi society in which every group wanted to maximize their benefits at expense of the others.

‪The same competing political elites invited regional and international powers to intervene in Iraq’s internal affairs. The interventions have exacerbated the situation and fueled more internal conflicts. Meanwhile, the Iraqi governments were used as a tool to consolidate one group’s influence and disadvantage the rest. Nobody, prior to 2014, pursued an inclusive national agenda to unify the competing groups and contain the accumulated group grievances within all Iraqi communities; Kurd, Shia, Arab Sunni, Yazidi, Christians, and other social and political communities.


‪Besides, Iraq is not an odd example in the region. Actually, it is part of a tough regional environment, where some neighbors like Iran and Turkey have higher group-grievance scores. Looking at the same FSI data in 2018, we can see how the grievance scores are high among the most diverse countries.

‪Besides, Iraqi ethno-nationalist and sectarian autocrats triggered reactions within the minorities’ ‌leaders who struggled to reverse the central governments’ repression. State-sponsored violence created similar but unequal reactions within oppressed groups. The circle of violence basically fueled several revolutions and rebel armed conflicts, from Kurdish revolutions and Iraqi Communist Party’s armed struggles till the resistance of Islamic Dawa Party and The Supreme Council for Islamic Revolution in Iraq, which all stood against Saddam Hussein Regime.

‪After the 2003 regime change, the same circle of violence turned up again but with new players like Nuri Al-Maliki‌’s government and several political parties and figures of Arab Sunni community. This circle of violence reached its peak with the so-called Islamic State of Iraq and Sham (ISIS) in mid 2014.

Internal conflict drives more group grievance

‪According to the FSI data, Iraq’s group grievance scores raised as internal conflicts increased and lowered as the conflicts decreased. The group grievance scores measures divisions between components of a certain society; especially those who are divided based on social or political allegiances. It also measures how the divisions affect their access to public services, common resources, and inclusion in political processes.

‪Aggrieved groups may use their historical background and go back to past injustices that could influence their relations with other communities. Certain communities might feel aggrieved when their self-determination or political independence have been denied. The FSI indicators capture when and where a certain group is discriminated by state institutions or a politically dominant group.

‪The figures show how years with intense internal conflicts (2007, 2013, 2014, 2015) dramatically raised group grievance scores in Iraq. Whenever state security forces launched campaigns against Al-Qaida linked groups in 2007 and ISIS between 2014 and 2016, the grievance scores raised. Meanwhile, as political and security situations improved the grievance scores decreased. For instance, in 2011 the score is 9, which is the lowest level over the 13 years.

‪If we take the number of the people who got killed due to wars and military conflicts as a proxy to measure the frequency of armed conflicts in Iraq, we can see how the group grievance scores raised as the number of armed conflicts-related deaths raised.

‪The World Bank data contains a variable “battle-related deaths” that counts people who got killed in armed conflicts, bombardments of military units, cities, and villages. The variable, could be a good proxy to measure the level of instability over the period. Comparing this variable with the FSI‌s group grievance scores, we can see how the both numbers rise and fall almost together.

‪The figures show how the grievance scores raised as internal conflicts escalated.

‪The Increasing Military Expenditure Did Not Help

‪Not surprisingly, the portion of public budget Iraqi government has allocated to military expenditure raised during the years with intense internal conflicts. The percentage of national budget allocated to military expenditure raised from (3.5%) in 2005 to its peak (12.6%) in 2015. This money was raised at expense of other key sectors like education, health, electricity, and social care. Economically speaking, the money is wasted since it was not used in any productive economic activities or any project that could drive the country towards a sustainable development and growth.

‪The money was spent in fighting ISIS and Al-Qaeda linked groups (out of necessity), but the spending would not be necessary if there were no previous ME for suppressing some Arab Sunni political figures and groups that brought ISIS war. It was basically spent to create some problems and then resolve the problems. Therefore, the Iraq’s defense capacity was used and ME was spent to kill and displace Iraqi people in addition to destroy hundreds of cities, towns, and villages.

‪Comparing the trend of the grievance-scores fluctuation with Iraq’s ME over the period, we can see how the increasing ME did not decrease the level of communities grievances in Iraq. Contrary, after 2011 (when the US army withdrew in the country) the volume of ME and grievance-scores raised and lowered together.

‪The figures, again, show that Iraq’s instability can’t be addressed only by 

‪military and security approaches.

Improving Economy Did Not Reduce Group Grievances

‪Iraq’s economic indicators between 2006 and 2017 show that the group grievance scores were not affected by the country’s improved economic growth. No economic recession or crisis contributed to it. Despite oil price fluctuation and constant uncertainties in the country, Iraq’s per capita growth national income (GNI) elevated steadily over the period, from ($10,890) in 2006 to ($16,530) in 2017. This money was supposed to help mitigate the communities grievances. Usually, developed states by various institutions and programs can buffer group grievances. In the Iraqi context, this is not the case.

‪All these indicators show that solutions of Iraq’sresilient conflicts are pursuing an inclusive national agenda that could be fair to Iraqis as individuals, not members of certain religious sects, ethnicities, and groups. The country needs an adequate governance that can create national allegiance for Iraqi individuals instead of antagonizing its communities based on their local identities or group interests. The risen grievance scores need political solutions rather than security and military approaches.

Stronger and Better State Institutions

‪These indicators should not be read in a way that questions the necessity of Iraqi security forces campaigns against the ISIS and Al-Qaeda linked groups. Iraq can’t survive as a state unless it has strong security forces to keep order and monopolize a legitimate use of force to guarantee its citizens safety. The indicators just tell that Iraqi communities feel unsafe and unhappy whenever internal conflicts increased. Therefore, solutions should be found for political and economic roots of the conflicts.

‪Parallel to national inclusive policies, having well trained and disciplined army and security forces are quite necessary to keep Iraq as a functional state; Iraq needs a strong and democratic state in order to survive in its unfriendly and instable geopolitics.

‪Given the country’s geopolitics, an adequate defense budget is always needed. The country basically needs to take its side and responsibility in the integrated regional security. However, the problem lies behind polices and agendas that embroiled Iraq to this level of fragility and fractionalization, which has always been a key factor for a wider instability in the whole region.

‪Iraqi federal government has to fairly allocate its resources and improve its performance to maximize public services on daily bases. It has to improve its governing capacity and launch reform policies in multiple economic, administrative, and political levels in order to improve quality of its governance.

‪The Iraqi federal government and KRG need to focus on the key issues that dragged the country into the club of fragile states. First, they should pursue strong counter corruption policies that could limit the amount of resources within-state mafias and militias use to strengthen themselves and ultimately create more conflicts.

‪Plus, both governments need to focus on an inclusive national agenda that might help resolving their disputes over oil, territories, and resource allocations. Reconstructing the post ISIS-areas is also necessary in order to avoid facing another ISIS.

‪The governments can cooperate in their security arrangements and make sure that they will not let any gap to the ISIS ‌insurgents, especially in the disputed areas. They also need to invest in national security institutions by more capacity building training and technology oriented surveillance systems.

The capacity building plan should go parallel with zero-problem relations with all neighboring countries in addition to regional and global powers. This can’tbe achieved unless avoiding the Iran-US conflicts.