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Will Iraq’s federal government survive?

Years of mismanagement and corruption are catching up with the Iraqi government. Prime minister Heider al-Abadi’s administration is hanging on by a thread

Few idiosyncrasies of the Iraqi political system generate as much ire as the muhasasa, or quota system, the post-election allocation of ministries based on parliamentary seats and ethno-sectarian quotas.

It is this system, which favours identity over skill, that prime minister Haider al-Abadi is now taking on – and why he is struggling to keep his government intact. The problem is, while a host of politicians publicly favour reform, they privately fear a loss of power. Bizarrely, a notable politician standing with Abadi (for now) is the unpredictable and radical cleric Moqtada al-Sadr. Al Sadr might just give Abadi the weight he needs.

Until now, muhasasa, which treats cabinet positions as a division of spoils among Iraq’s political factions, has led to some odd appointments. So the country’s former trade minister, Adbul Falah al-Sudani, was once a biochemist. More recently, Iraq’s higher-education minister was a former chemical engineer with no experience in education.

Furthermore, parties don’t want to let go of the hiring power of ministries. Its created huge inefficiencies and turned state employment into a method of welfare. Interior minister Mohammad Ghabban recently said that when he came to power he was shocked to find more than 0.6m policemen on the payroll. The Ministry of Electricity was also recently thought to have 120,000 employees, even though power provision in Iraq remains at best patchy. By contrast, the energy ministry in Germany, where the lights don’t fail, employs 2,000 people.

Abadi’s main rival, former prime minister Nouri al-Maliki, blamed the oil-price collapse for Iraq’s economic failures, not mismanagement. But he has been under no illusions that this is not the case and quickly won over sceptics among Kurds, Sunnis and rival Shias alike, with parties at first voicing support for his reforms.

But he’s discovered a web of dysfunction, and rivals pretending to support reform are now digging in for a fight. One of his first announcements was that there were 50,000 fake employees (“ghost soldiers”) at the Ministry of Defence, an alarmingly similar situation to 2011 when the Ministry of Justice said that as many as 50,000 government employees had fake degrees.

In this stagnant environment, Abadi’s method of renewal has been to try to encourage private investment. His own experience included a spell as an executive in the UK’s transport sector. So his leanings were plain from the outset. To truly reform Iraq’s public sector and make a leaner, more modern state, though, things needed to change quickly.

But Abadi’s reforms were stalling until help came from an unlikely supporter: Sadr. Long known as the “firebrand cleric”, the Shia clergyman has played on a prestigious family history of opposition to Saddam and more recently to the US-led invaders as well as to Iranian influence.

Strength in numbers

Sadr has a large army of devoted followers – the so-called Mahdi Army (renamed the Peace Brigade) – controls a large section of Baghdad (Sadr City); and he has snubbed almost every major player in Iraqi politics. Occasionally, he has formed alliances with opposition groups, usually to counter Maliki. That’s created common ground and forced a degree of understanding between Sadr and Abadi.

Nonetheless, Sadr has been keen to play up his role as champion of the “people’s opposition”, a movement of discontent with Iraqi government corruption and failure that has been growing more significant in recent months. Since February, Sadr has been agitating street opposition and on 18 March his supporters began a sit-in just outside the Green Zone, Baghdad’s fortified government and diplomatic core, threatening to storm it. On 27 March, he himself joined the protestors and, rather symbolically, crossed into in the zone alone.

The protests have had three outcomes so far. First was condemnation from across the political spectrum as critics argued that now is not the appropriate time for internal protests. Islamic State (IS), not the federal government in Baghdad, is the true enemy. The second outcome was surprising: Abadi agreed to Sadr’s demand to install a new “technocratic” cabinet within 45 days. The protestors went home.

Third, is that Sadr has been in contact with Iraq’s highest religious authority, the marjariya. Most likely, Abadi and the clergy have instructed Sadr to calm his rhetoric, while also agreeing with his demands for reform and an end to corruption in government.

Sadr has since praised Abadi’s plan for a technocratic cabinet as “courageous”. In the face of the show of force from the Sadrists, several ministers have resigned from government, also ostensibly in support of reform, including oil minister Adil Abd al-Mahdi. Sadr has arrested one of his ministers, and fired another.

Strong sentiment

For now, direct threats to oil are minimal. Sadr is erratic, but it remains highly unlikely that he would mobilise his forces to attack Iraq’s oil installations in the south. Aggravation around the oilfields near Basra would isolate him.

But his aggressive rhetoric has been unwelcome. Investors in Iraq’s big oilfields are already troubled by Baghdad’s demand that they cut back heavily on expenditures; and even if the material threat to assets in the south has not emerged, the shakiness of the central government hardly reassures them.

It is in this difficult environment that Iraq’s defence and interior ministers have kept their positions, important in the first case because the defence minister is a Sunni from the powerful Obeid tribe, which spans much of central Iraq, close to the war against the Sunni IS.

Abadi has also continued his aim of cutting the size of his government, merging and abolishing some ministries and removing a number of senior civil servants. Critics may say this is superficial, but Abadi’s suggested list of new ministers says otherwise.

Hassan Janabi is expected to replace water minister Muhsin al-Shammari, a member of the Sadr block in parliament, whom the cleric fired following rumours of falsified qualifications.

Ali Allawi, with qualifications from Harvard Business School and MIT and significant finance sector experience, was Abadi’s choice to head the newly combined Ministry of Finance and Planning.

Naturally, Abadi’s critics oppose these appointments. Allawi has declined his nomination, complaining of “political interference”. The proposed new oil minister, the Kurdish Nizar Numan, a highly qualified geologist, has also pulled out of the running, claiming the Kurdish Democratic Party objected to his appointment – probably because it would interfere with their own ambitions over Kurdish energy.

Political dysfunction is trumping pragmatism. So far, the divided parliament has accepted only four of Abadi’s 14 nominations. More problems loom as a cross sectarian block of 170 members of parliament have demanded the abolition of the presidency and are now threatening a vote of no confidence in the speaker of parliament. If this happens, the dominos may start falling, leaving Abadi with few options, except perhaps to declare a state of emergency or call for early elections. With IS still in control of some parts of Iraq, that plan would be difficult to execute or win approval. Horse-trading may yet bring more approvals for nominated ministers, which would at least be progress.

But the profound reluctance of Iraq’s different parties to accept change is ominous. The country faces a $2.5bn monthly shortfall in revenues and is seeking at least $6bn in international loans. Abadi needs to demonstrate some tangible progress to keep the IMF monitoring programmes on track and not jeopardise loans that are conditional on reforms.

Equally vital is that Abadi’s new nominee for oil minister, the highly qualified Jabbar Allibi, be approved. Allibi has worked near the top of the Iraqi oil sector for years, and has extensive experience in Basra. Having a rational and professionally minded appointment in this post will be vital as contract renegotiations with international oil companies continue. Iraq wants to devise more flexible and sustainable cost-recovery arrangements with IOCs that will better reflect the weaker price outlook and incentivise investors – in short, to correct some of the problems embedded in the original technical-services contracts. Options for financing the vital Common Seawater Supply Project, to allow for much-needed water-injection, are also still being examined. A huge amount of new infrastructure is still planned in the south to maintain and expand oil output. It is critical to Iraq’s oil sector and its economy.

The rejectionism on display now in Baghdad threatens all this. But it could also be a huge error on the part of the opposition. Ammar al-Hakim, one of the leaders of the Islamic Supreme Council of Iraq, a Shia party long close to Iran, has jumped on Sadr’s bandwagon, calling for another major protest against “unconstitutional” reforms. Maliki, ever scheming, has said Abadi should quit. In reality, any protest led by Hakim is likely to be ridiculed by many Iraqis as a march for the political establishment and status quo. A return to Maliki-era politics would also damage Iraq’s international partnerships.

Abadi has some things in his favour. He has been adept at keeping dialogue open with an array of Iraqi leaders – this allows him to sell his reforms as coming from the post-2003 Shia political consensus, even if Shia unity has frayed badly. At the same time, he has tried to play a role as peacemaker with leading Kurdish and Sunni figures, with some success. If he can portray the opposition as rejecting change, it could go bring him support on the street and in parliament.

Abadi also enjoys a relatively favourable position in Washington and Tehran, and can call on as much financial and military support as Iraq can get. For now, the crisis rages but the prime minister survives. If he and Iraq are also to emerge from the latest Baghdad political fandango, Abadi will need a lot more of this resilience for the foreseeable future.

Luay al-Khatteeb is a fellow at the Center on Global Energy Policy, Columbia University, School of International and Public Affairs

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