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Figure D.1 Geography SULAYMANIYAH TAMEEM Provincial Capital: Ba’quba 6,828 square miles Kifri Area: (17,685 square kilometers), 4.1% of national territory SALAH AL-DIN Major Cities: Ba’quba, Baladrooz,al-Khalis,Kifri, and Khanaqin IRAN Demography Khanaqin Population: 1.65 million Lake Hamrin (2009 GOI est.) Sunni Rural vs. Urban: 59% vs. 41% Uzaim Shia Major ethnosectarian groups: Kurd Sunni (55%); Shia (25%); Kurds(10%);others,including er Shia/Sunni Mix iv R Turkmen, Christians, and la Shia/Kurdish Mix a y Yazidis (10%) Balad Di Al-Muqdadiya Political Economy Al-Khalis Governor: Abdul-Nasser al-Mahdawi Tigris River Mandali (Iraqi Accordance Front) Ba’quba Baladrooz Provincial Council Chairman: Tarmiya TalibMohamadHasan (Kurdistani Alliance) Main Industry: Agriculture Taji Al-Rashidiyah U.S. Presence Turki Diyala PRT Closure Date: September 2011 Total U.S. Reconstruction Funds BAGHDAD Committed: $1.06 billion Baghdad Ongoing U.S. Capital Note: The map above shows the diverse ethnic and religious composition of Diyala province. The shapes are rough Investment: $54.9 million indicators and should not be viewed as exact. Planned U.S. Capital Investment: Source: 3rd HBCT, 1st Cavalry Division, “Diyala Province,” 10/2006–12/2007, as sourced in Claire Russo, “Diyala Provincial $5.18 million Election: Maliki and the IIP,” The Institute for Understanding War, 1/30/2011, p. 12. Note: Population estimates based on data call responses from U.S. Embassy-Baghdad, With no national census since 1987 and 3/29/2009, 7/6/2009, and 7/16/2009, and Background information from the Diyala Investment Bordered by Iran, the Kurdistan Region, large-scale population displacements hav- Commission. Funding information from PRT Diyala. Baghdad, the mostly Sunni province ingoccurredbothbeforeandafter2003, ofSalahAl-Din,andtheoverwhelm- measuring the size and composition of inglyShiaprovinceofWassit,Diyalaisa Iraqi provincial populations with precision amidst this ethnic mosaic is an even more microcosmofIraq.Withitscontentious isimpossible.Thesituationisparticularly complexweboftribes.Accordingtothe intercommunal relationships, mixed difficult in Diyala because of the Ba’athist U.S. military, in 2007 there were at least economy,andvariedgeography,the regime’s mass resettlement of Arabs 25majortribesandalmost100sub-tribes majorissuesinDiyalareflect,albeitona thereandrelatedexpulsionsofKurdsin inDiyala,someofwhichencompassed smaller scale, the foremost challenges fac- theperiodaftertheIran-IraqWar.Most bothSunniandShiabranches.Asafor- ingIraq.AsoneU.S.brigadecommander estimates, however, show that a majority of merDiyalaProvincialCouncilmember saidaboutDiyalain2007,“basically,all Diyala’s residents are Sunni Arabs, but as told SIGIR in July, ethnic tensions were theissuesandconflictsthatexistthrough FigureD.1shows,theysharetheprovince minimized prior to 2003 because, “Sad- allIraq...existhere.”187 with several different groups. Intertwined dam ruled with an iron fist.”188

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Becauseitsoilandnaturalgasresources theunresolvednatureofthisdispute,in haveyettobeextensivelydeveloped, lateMay2011,theKhanaqinmunicipal Diyala’s economy remains heavily depen- governmentraisedtheKRGflagoveran dentonagriculture.Onceknownasthe officialbordercrossingwithIranforthe “CityofOranges”foritsbountifulcitrus first time.192 groves,theprovincialcapitalofBa’quba Since2010,theU.S.militaryhasbeen lies at the heart of the fertile Diyala River engaged in joint patrols with the Iraqi Se- valley,whichbisectstheprovincefrom curityForces(ISF)andKurdishPeshmerga thenortheasttothesouthwest.Butaplu- alongtheKurdistanRegion’ssouthern U.S. artillery round detonates during operations ralityoftheprovince’spopulation(40%) border.AsofJune30,nofirmplansexist against insurgents in Diyala in January 2007. residesintheprovince’slargest,and regardingwhatforce,ifany,willreplace (USF-I photo) mostlydesert,districtofBaladrooz.189 themiftheU.S.militarywithdrawsfrom Although Coalition forces killed al-Zarqawi Iraqasscheduledbytheendoftheyear. inaJuneairstrikeonhishideoutnear Arab-Kurdish Dispute This led former U.S. Forces-Iraq (USF-I) Ba’quba,thesecuritysituationintheprov- NorthofBaladroozliesthedistrictof Commanding General Raymond Odierno incecontinuedtodeteriorateastheyear Khanaqin—the central focus of Arab- to publicly raise last year the possibility woreon.SectariantensionsinDiyalawere KurdishtensionsinDiyalaprovince. of an international peacekeeping force alsoexacerbatedbytheSunniperception IntheaftermathoftheIran-IraqWar, eventually patrolling territories claimed that the Shia-dominated police force acted Saddam Hussein attempted to “Arabize” by both the KRG and GOI.193 inapartisanmanner.Inoneincident,a much of Khanaqin by expelling large police sweep netted about 900 detainees— numbersofFeyli(Shia)KurdsfromIraq, allbut2ofwhomwereSunnis.196 accusingthemofactivelysympathizing Security As the security situation grew worse, with their Shia co-religionists across the The Insurgency Intensifies: 2003–2006 Diyala’s government ceased to func- border.Intheirplace,theBa’athistsrelo- Between 2003 and 2006, the insurgency tion.InSeptember2006,Diyalaofficials cated Sunni Arab families—thought to graduallyintensifiedinDiyala,asarmed stopped distributing regular food rations be more sympathetic to Saddam—to take groups streamed into the province from andfueltoresidents.InOctober,the ownershipofthevacatedhomes.After citieswheretherewasalargerCoalition provincial government recessed because 2003, many displaced Kurds resettled in militarypresence,suchasBaghdad.194 ofthedeterioratingsecuritysituation. thedistrict,andtheKurdistanRegional By June 2007, the number of monthly By December, the insurgency effectively Government (KRG) asserted claims incidentshadreached1,023:195 controlledBa’qubaandmuchofthe 197 topartsofKhanaqinandneighboring 1,023 Diyala valley. Kifridistricts—claimscontestedbythe 6/2007 GovernmentofIraq(GOI).190 Securing Diyala: 2007 Thesetensionsledtoastand-offbe- BeginninginJanuary2007,Coalition tween Kurdish Peshmerga forces and the forces,ledbytheU.S.1stCavalryDivi- Iraqi Army (IA) in August 2008, when sion,slowlyreassertedcontroloverDi- elements of the IA’s 1st Division entered 96 yala.AfterclearingAQIfightersfromthe 1/2004 46 Khanaqin—a movement that the IA’s 12/2010 villageofTurkisoutheastofBa’qubain ChiefofStaff,aKurd,claimsnottohave FigureD.2showsmajorsecurityevents OperationTurkiBowl,U.S.forcesgradu- knownofinadvance.191 Like the disputes in Diyala during peak violence in ally pushed toward the provincial capital. betweentheGOIandKRGoverKirkuk, 2006–2008. Inanattempttocountertheincreased theconflictingclaimsovernorthern ByApril2006,AbuMusabal-Zarqawi, tempoofU.S.operations,AQIlaunched Diyalaaremeanttobesettledaspart then-headofal-QaedainIraq(AQI),felt several attacks in March and April, using oftheprocesssetforthinArticle140of secureenoughtodeclareDiyalaasthecapi- suicide bombers against civilian targets the Iraqi Constitution. But, to date, the talofthecaliphateheintendedtoestablish intownsandvillagesandkidnapping GOI has made little progress in moving inIraq.Thatsamemonth,AQIlauncheda andkillingmanyGOIofficials.Shia forwardwiththeArticle140process, large-scale offensive in the province, strik- militias also constituted a serious secu- whichrequiresittoconductbotha ingtargetsacrossDiyalafromtheirrural rity threat. In late February, U.S. troops census and referendum. Underscoring bastions in the farmlands near Ba’quba. uncovered a cache of more than 150

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Figure D.2 Significant Security Events in Diyala, 2006−2008 2006 2007 2008

Mid-May Commander of 5th Iraqi Army Division relieved of January command for sectarian bias Coalition forces clear September AQI elements from September April AQI launches a series farming communities Diyala government U.S. forces establish 7 of attacks on Diyala northeast of Ba’quba stops PDS food and combat operating posts in Concerned Local April fuel deliveries and around Ba’quba Citizen groups October Abu Musab Series of major March–June al-Zarqawi June 7 January–February September 24 reconciliation ISF and SOI declares Diyala Al-Zarqawi U.S. army sweeps Suicide bomber kills meetings held increase presence August–September the capital of his killed in U.S. rural areas east and 28 at a reconciliation by pro-GOI northeast of ISF arrests several caliphate airstrike south of Ba’quba meeting in Ba’quba sheiks Ba’quba Diyala SOI leaders

October March June 19 August 19 November–December August 11 Diyala government recesses AQI launches Operation More than 100 Operation Raider Reaper targets Diyala Provincial large-scale Arrowhead Diyala tribal AQI elements operating in rural Council removes December attacks in Ripper targets leaders sign areas outside Ba’quba Provincial Police Insurgents take effective southern insurgents in pact pledging Commander Qureshi control of Ba’quba Diyala Ba’quba to oppose AQI July 15 on grounds of sectarian and other Suicide bombers attack IA bias Mid-March July insurgents recruiting station in Diyala, U.S. forces Operations Ithaca killing 35 Mid-August reinforce Diyala and Olympus drive August 27 Special GOI AQI from smaller U.S. and ISF counterterrorism unit Diyala town forces launch raids provincial Operation government buildings, July 23 Church north of arresting several Sunni First large reconciliation Ba’quba officials on charges of meeting held by anti-AQI supporting AQI tribal sheiks and Diyala officials Mid-August Iraqi Army enters Khanaqin district; standoff with Kurdish Peshmerga ensues

Note: This timeline highlights selected major events during 2006−2008.

Source: SIGIR analysis of GOI and U.S. government documents and open-source information in Arabic and English.

Munitions seized from insurgents in Diyala. IraqiArmysoldieronpatroloutsideBa’quba. SOI checkpoint in Diyala. (USF-I photo) (USF-I photo) (USF-I photo) Iranian-made weapons, suggesting that Sunnialliesabandoningthemandbegin- remnants from farming communities Iraq’seasternneighborwassupplying ningtoprovideintelligenceandotheras- andsmalltownsintheDiyalavalley.In Shia militia operating in Diyala.198 sistancetotheU.S.military.Thesecollec- contrast to previous operations, which OnJune19,2007,U.S.andISFunits tionsofconcernedlocalcitizensincluded sweptthroughtheseareaswithout began Operation Arrowhead Ripper the Ba’quba Guardians, a U.S.-backed leavingbehindapermanentsecurity toclearBa’qubacityanditsenvirons. groupformedinJuly2007toprovidese- presence, U.S. and ISF units began estab- Although fighting continued throughout curityintheprovincialcapital.Eventually, lishingoutpostsinseveraloutlyingcom- thesummer,Ba’qubawasmostlysecure manyofthesegroupswouldbefinancially munities.200 Figure D.3 compares AQI’s byAugust,asU.S.forcespushedAQIout supportedbytheU.S.militaryviathe presence in Diyala in December 2006 to ofthecityandintothehinterlands.By Sons of Iraq (SOI) initiative.199 itspresenceinMarch2008. mid-year,AQI’sreligiousextremismand In 2007 and 2008, tensions grew brutal tactics, along with an increasingly Precarious Stability: 2008–2011 betweenDiyala’sShiaprovincialpolice assertive Coalition military presence, In 2008, Coalition military operations chief,Ghanemal-Qurishi,andthe contributedtomanyofAQI’ssecular in Diyala emphasized clearing AQI mostlySunniSOI.Thisconflictcameto

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Figure D.3 Al-Qaeda in Diyala Province, 2006 vs. 2008

Kirkuk Kirkuk December 2006 March 2008

Tikrit Tikrit

Samarra Samarra

Ba’quba Ba’quba

Ramadi Ramadi Diyala Province Diyala Province Falluja Baghdad Falluja Baghdad

KEY KEY Isolated Heavy Isolated Heavy Pockets Concentration Pockets Concentration

Source: MNF-I, Charts to accompany the testimony of General David H. Petraeus, before the Senate Armed Services Committee hearing, “On the Situation in Iraq and Progress Made by the Government of Iraq in Meeting Benchmarks and Achieving Reconciliation,” 4/8/2008, slide 8.

Figure D.4 Diyala officials expressed grave con- Sons of Iraq in Diyala Province Breakdown of SOI Personnel cernstoSIGIRinJulymeetingsaboutthe Beginning in October 2008, the Government of Iraq (GOI) securitysituation.Theprovince’schief progressively assumed full management responsibility for the Sons prosecutor remarked that every time he of Iraq (SOI) program from Coalition military forces, taking control of more than 8,600 Diyala personnel on January 1, 2009. Under the stepsoutsidehishouse,it“isawalkinto terms of an agreement with the Multi-National Force-Iraq, the GOI the unknown:”203 promised to provide government employment for all 95,120 SOI members, either in the security ministries (Interior and Defense) or There isn’t anything that makes me elsewhere. A SIGIR audit released in January 2011, however, 9.1% hopeful.Ifanything,I’mcynical.As reported that meeting this goal has been challenging. As of long as sectarianism still exists it will killallhopeandoptimism,andfearwill December 2010, about 42% of all SOI personnel had been Total SOI force strength reign.Asacountry,weneedsecurity. transferred to GOI jobs—but only 463 (5.3% of all SOI transferred) Diyala personnel, as of 4/2009 were from Diyala province. We’vegoneback100years.Theother countriesoftheregion—oncehavingonly Source: SIGIR Audit 11-010, “Sons of Iraq Program: Results are Uncertain and Financial Controls Were Weak,” 1/28/2011. sand—arethrivingtoday...andlooklike Europeancities.AllwewantinIraqisto aheadinAugust,whenspecialsecurity aprovincialgovernmentbuilding.At be stable enough to start catching up.204 unitsfromBaghdadraidedtheBa’quba least9peoplediedintheattackand government center, arresting pro-SOI/ about17werewounded.Twoweeks Future of U.S. Presence anti-Qureshi officials after a firefight later,Ba’quba’smayorwasinjuredwhen Whiletheprovincialofficialswhospoke with the center’s guards. The ISF remains an improvised-explosive device deto- to SIGIR expressed mixed feelings about reluctanttointegrateDiyalaSOIintoits natednearhisconvoy.Inthewakeof theplanneddepartureoftheU.S.troops units (see Figure D.4 for information on these attacks, several Diyala officials an- currentlystationedinBa’quba,theywere theSOIprograminDiyala).201 nouncedtheirintentiontoavoidprovin- unanimousintheirwishfortheUnited Although the security situation in cialgovernmentfacilitiesandconduct States to maintain some presence in Diyalahasimprovedsince2008,the theirworkelsewhereuntilthesecurity theprovinceafterDecember2011.One province remains one of Iraq’s most situation had improved.202 Figure D.5 DiyalaofficialtoldSIGIRthat,“ifthe volatile.OnJune14,2011,multiple listssignificantrecentsecurityeventsin UnitedStatespullsoutallits[civilianand suicidebombersandgunmentargeted Diyala province. military] personnel from the province,

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Figure D.5 Selected Incidents of Violence in Diyala, 4/10/2011−7/10/2011 April Wednesday, April 13: Local government official wounded by IED in Ba’quba Thursday, April14: Police spokesman survived bomb attack on his residence in Ba’quba Thursday, April 28: Suicide bomber attacked Shia mosque in Baladrooz, killing 8 and wounding about 18 Friday, April 29: Imam of a mosque in Khanaqin killed with his family by gunmen; 4 Awakening members killed in armed attack on a house south of Ba’quba May Friday, May 6: Bodyguard of Awakening sheik stabbed to death south of Ba’quba Saturday, May 7: 10 police officers wounded in car bomb attack in Ba’quba; 5 killed and 3 wounded in attack on money exchange in Ba’quba Wednesday, May 25: Ministry of Oil official killed by gunmen in Khanaqin SIGIRDeputyInspectorGeneralmeetswithDiyala Saturday, May 28: 2 attacks (IED and grenade) killed 1 civilian and wounded 3 police officers in Ba’quba officials. June Tuesday, June 7: Police chief of Hibhib, a small town west of Ba’quba, killed by sticky bomb detonation Governance Saturday, June 11: Retired IA officer and his son killed by sticky bomb detonation in Khanaqin Relationsbetweentheprovincialgovern- Tuesday, June 14: Suicide bombers and gunmen attacked Diyala provincial government complex in Ba’quba, killing 2 police officer and wounding more than 20 others ment and Baghdad remain somewhat Saturday, June 18: Bomb killed 3 in Ba’quba Sunday, June 19: Sticky bomb explosion in Ba’quba killed 1 and injured 3 contentious.Thisquarter,Diyala’sgover- Monday, June 20: Mayor of Judeidat al-Shat, a small town north of Ba’quba, killed by gunmen who attacked his residence northreatenedtoresigniftheGOIfailed Sunday, June 26: Suicide bomber kills police chief near Ba’quba Tuesday, June 28: Mayor of Ba’quba survived IED attack on his vehicle to release certain detainees and accede to July hisdemandsonothersecuritymatters.207 Monday, July 4: Official from the Patriotic Union of Kurdistan party shot and killed northeast ofBa’quba Wednesday, July 6: VBIED attack in Ba’quba killed 2 police officers and wounded 19 other people AsofJuly10,however,hehadnotfol- Thursday, July 7: IED exploded near a butcher shop west of Ba’quba, wounding 3 lowed through with his threat. Saturday, July 9: Booby-trapped motorcycle exploded in Ba’quba, wounding 15

Note: The security incidents cited above are intended to provide a sense of the types of violence occurring in Diyala province. This is not intended to be a comprehensive list of all security incidents. Provincial Elections,

Source: SIGIR analysis of open-source Arabic- and English-language documents, 4/2011–7/2011. 2005 and 2009 In2005,awidespreadboycottbymost SaddamHusseininhiswarsagainstIran SunniArabpoliticalpartiesofIraq’sfirst andtheU.S.-ledCoalitionandwereplaced post-2003 provincial elections resulted ontheU.S.DepartmentofState(DoS) inacoalitionofShiapartieswinning list of Foreign Terrorist Organizations. In almost50%ofthe41seatsonDiyala’s mid-2004, Coalition forces granted the Provincial Council, despite Shia number- camp’sresidentsprotectionunderinter- ingonlyaboutone-fourthoftheprov- national law, on the condition that they ince’spopulation.TheonlymajorSunni relinquish their arms. Arab party participating in the 2005 OnJanuary1,2009,theU.S.military provincialelectionsinDiyala,theIraqi

ISFandSOIofficialsconferataU.S.baseinDiyala. transferred control of Camp Ashraf and IslamicParty,won14seats.AKurdish- (USF-I photo) itsapproximately3,400residentstothe ledblocwontheremaining7seats.Thus, itwillbeaverybigmistake.”Diyala GOIontheunderstandingthatthese SunniArabs,whocomprisemorethan officials cited the simmering religious protections would continue. However, one-half of the province’s population, andethnictensions—betweenSunni ISF units have entered the camp on at heldonlyaboutone-thirdoftheseatson and Shia, and Arabs and Kurds—and its least two occasions since January 2009, the Provincial Council. After the 2005 strategiclocationontheIranianborder andeachencounterresultedinmultiple elections, council members chose as astworeasonsweighinginfavorofacon- deaths.Mostrecently,anISFincursionin governorRa’adHameedal-MulaJowad tinued U.S. presence in the province.205 earlyAprilresultedinthedeathsofmore al-Tamimi,aShiaArabaffiliatedwiththe than30campresidents.AU.S.congres- partynowknownastheIslamicSupreme Camp Ashraf: A Lingering Issue sional delegation attempted to visit Camp CouncilofIraq.208 Locatednortheastofthetownofal-Kha- AshrafduringaJune2011triptoIraq,but Four years later, Sunni Arab turnout lis, Camp Ashraf has housed members of wasnotgrantedGOIpermissiontotravel increased dramatically, resulting in two the Iranian Mujaheddin e-Khalq (MeK) there.CurrentGOIplanscallforshutting Sunni Arab-led parties finishing first (alsoknownasthePeople’sMujahed- down Camp Ashraf by the end of the year andsecondinDiyala’s2009provin- dinOrganizationofIran)formorethan andrelocatingtheMeKelsewhere,either cial elections. The United Accord and twodecades.TheMeKfoughtasalliesof inIraqoranothercountry.206 ReformFrontinDiyalaandtheNational

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IraqiProjectcombinedtowin15ofthe Council of Representatives exports. However, the Chamber 29seatsonthenewlyreduced-in-size In the March 2010 national parliamentary reported that its operations have been Provincial Council. The council subse- elections,formerPrimeMinisterAyad somewhat impeded by the Ministry of quently elected as governor Abdul-Nasser Allawi’sal-Iraqiyablocwon8ofDiyala’s Interior’sseizureofhalfofitshead- al-Mahdawi,aSunni.209 Figure D.6 13 seats, with about 60% of eligible voters quarters building. compares the approximate Shia, Sunni, casting ballots. The Shia-dominated Iraqi • Provincial Investment Commission andKurdishpopulationsin2005and National Alliance finished second, win- (PIC). Beset by political infighting 2009 with the percentage of council seats ning3seats.TheKurdistaniAllianceand from its inception more than two wonbyeachcommunity. PrimeMinisterNurial-Maliki’sStateof yearsago,thePICisstrugglingtogain Lawcoalitioneachwononeseat.210 afootholdintheprovinceandhasnot Figure D.6 receivedanyfundsfromtheMinistry Council Seats Won in Diyala, of Finance. The nine commission- 2005 vs. 2009 Economic Development ers who lead the PIC have not been Diyala AccordingtoDiyalaofficialsandcommu- paid,andtheycurrentlyoperateout 80% nity leaders with whom SIGIR met in early ofarentedhouse.TheU.S.Provincial 70% July2011,theprovincialeconomyisone Reconstruction Team (PRT) in Diyala 60% of the worst-performing in Iraq. Diyala ishelpingthePICfindapermanent 50% officialsestimatedunemploymentatabout headquarters.

40% two-thirds of the working-age population.

30% Theprovincialeconomyrunsadeficit, Agriculture producinglittlethatcontributestothe Diyala contains about 10% of all arable 20% nationalcofferswhiledrawingabout land in Iraq, and its agricultural sector 10% 0% $120millionannuallyfromBaghdadfor isthemainsourceofemploymentinthe Shia Sunni Kurd Other payrollandstipends.Diyalaofficialshave province,providingroughly70%ofall 2005 Election Results 2009 Election Results chieflyascribedthepoorperformance nongovernmentjobs.Primarycropsin- % of Province Population oftheeconomytothenearanarchythat cludedates(ofwhichtherearemorethan characterizedtheprovincebefore2008. 72localvarieties),citrusfruits,seasonal Sources: UNAMI, Elections Results, Issue No. 30, 2/2009; GOI, IHEC, www.ihec.iq/arabic, SIGIR translation, Officials added that although some vegetables(suchaseggplantsandpep- accessed 2/22/2009; U.S. Embassy-Baghdad, response to 214 SIGIR data call, 4/2/2009. progresshasbeenmadeinthepastthree pers), wheat, barley, grapes, and figs. years,securityintheprovincehasdeterio- UndertheOttomanEmpire,most ratedinrecentmonths,placingeventhat farmland in Diyala was registered to fragile progress at substantial risk.211 The tribal collectives. Today, farms are held uncertain security environment in Diyala underavarietyofdifferenttypesofdeeds, hasdissuadedforeigncompaniesfrom including private, tribal, government- committing resources to the province. ownedand-operated,andgovernment- Onestudyconcludedthatlessthan1%of owned but provided to businesses or all foreign commercial activity in Iraq last citizensforcommercialexploitation.This yearoccurredinDiyala.212 complicatedsystemoflandownership isjustonefactoraffectingthedevelop- Provincial Investment Promotion ment of Diyala’s farming sector. Other Diyala has two main investment-promo- challenges include low rainfall, which tion organizations operating to improve averages about four inches per year; its economy:213 poorlymaintainedirrigationcanals;lack • Diyala Chamber of Commerce. With of fertilizer; limited refrigerated-storage amembershipofabout5,000,the facilities;andpoorroadnetworks.215 Chamberisthelargesteconomicdevel- Mostofthewaterusedforfarming opment organization in the province, comesfromtheDiyalaRiver,which assisting businesses in obtaining loans, flows from Iran, through the Kurdistan Residentsofal-KhalisconferwithISFofficialsabout insurgent attacks. (USF-I photo) monitoring inflation, and promoting Region,intotheprovince.Accordingto

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Diyala officials open the annual date festival in JointU.S.-ISFpatrolsneartheDiyalaRiver. U.S.patrolencounterscattleinruralDiyala. Ba’quba. (USF-I photo) (USF-I photo) (USF-I photo) theprovincialDirectorGeneral(DG) open in the province because they would Diyala lacks the large oil fields found ofWaterResources,“amountsreleased have better technical infrastructure and inprovincestoitsnorthandsouth,fur- fromIranaretotallyarbitrarybecause more experienced staff.218 thercontributingtoitsrelativeimpov- there are no agreements between the Banks do make loans available to erishment. Most of Diyala’s modest oil twogovernments.”TheKRGalsodams Diyala residents, albeit in limited fashion. depositsarelocatedinthenorthernarea thewater,furtherlimitingtheprovince’s The GOI Real Estate Bank offers 20-year oftheprovince.NaftKana,thelargest supply.“Asaresult,wecan’tplanany- loans for homes at 2%, while Rafidain field,producesabout16,000barrelsper thing,” the DG said. offers 15-year loans at 8%. For those who day,muchofwhichisshippedtoBagh- Studiesonundergroundwater followIslamiclaw,whichprohibitsthe dadbytruckforrefining.Accordingto sourceshavefoundthatwatertablesare paymentofinterest,theGOIisexploring PRTDiyala,theoilsectorprovidesabout between60and360feetdeep,buttheir theestablishmentofIslamicbanks.Prime 32,000 jobs in Diyala.222 high salinity and sulfur levels render Minister al-Maliki also recently set up a themunusable.Asaconsequence,many fund that provides five types of no-interest Industrial Activity people unable to sustain their farms are loanstofarmers.ButDiyalaofficialsnoted AccordingtoPRTDiyala,largebusi- migratingtothecitiesandjoiningthe thatthereisnooversightoftheseloans nesses operating in the province (those ranks of the unemployed. The DG said after the money is lent.219 with more than 100 employees) provide hisofficeistryingtoadoptnewirrigation jobsformorethan11,000individuals.223 technologies such as drip irrigation with Natural Gas and Oil Many of Diyala’s largest firms, however, assistancefromPRTDiyala,butstated On June 5, 2011, the Ministry of Oil final- are not operational. Cheap imports have that the challenges are still vast.216 izeda20-yearcontractwithaTurkish-led caused several food-processing plants OnJuly9,residentsofKhanaqincon- consortium to develop the Mansuriya to cease operations, as their products ductedaprotestmarchagainsttheIranian naturalgasfield,locatedabout50kilome- werepricedoutofthemarket.Politics government’sdecisiontointerruptthe ters northeast of Ba’quba, near the Iranian also plays a role. For example, al-Khalis downstreamflowofwaterinoneofthe border.Thefieldisestimatedtobecapable MedicinalAlcoholPlantliesidlebecause DiyalaRiver’stributaries.Accordingtothe ofproducingabout320millioncubicfeet theGOIhasdeniedtheownersfinanc- chairman of Diyala’s Provincial Council, of gas per day. As part of the deal, Turkey’s ing, citing their close association with the localofficialslodgedaformalcomplaint state-ownedoilandgascompany(TPAO) former Ba’athist government. Table D.1 with Baghdad about this matter in May, willcontribute50%oftheinvestment summarizesthecurrentstateofDiyala’s but did not receive a response.217 needed to exploit this field, the Kuwait large businesses.224 Energy Company will contribute 30%, Banking and the Korean Gas Corporation will pro- State-owned Enterprises: Thebankingsectorisamajorcomponent vide the remaining 20%. Production is not ACaseStudy oftheprovincialeconomy,butit,too,is estimatedtocomeonlineuntil2015.220 The largest state-owned enterprise (SOE) strugglingtoaddressmultiplechallenges. The Ministry of Oil announced plans to operatingintheprovinceistheDiyala Thereareonly11branchesofthegovern- conduct its fourth hydrocarbon licensing StateCompanyforElectricalIndustries ment-owned Rafidain and Rashid banks roundinearly2012,whichwouldincludea (DEI).Establishedin1977,thecompany foraprovinceofmorethan1.6million largenatural-gasexplorationsitethatruns began producing a variety of small people.TheDiyalaSupervisorofBank- from southern Diyala under the inter-pro- consumerandindustrialgoodsinthe ingstressedtheneedforprivatebanksto vincialborderintonorthernWassit.221 early1980s.Employingmorethan3,500

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Table D.1 Figure D.7 StatusofMajorCompaniesin Small and Medium-sized Businesses in Diyala and Nationwide, by Sector Diyala, 7/2011 Agribusiness Total Diyala Status Business Name Employees Construction Iraq

Currently Operating Manufacturing

Diyala State Company Professional Services forElectricalIndustries 3,500 (51% private, 49% Wholesale, Retail Trade public) Transport and Storage Baladrooz Brick Plant 2,000 (100% public) Hotels, Restaurants and Tourism Khan Bani Sa’ad Silo 270 Communications (100% private) New Baghdad Brick Electricity, Gas, Oil 240 Factory (100% private) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Not Operating Source: USAID, Tijara, “Market Assessment: Business Constraints and Opportunities at the Business Enabling Environment Dehliki Food and Firm Levels for the Province of Diyala, Iraq,” 3/2010, p. 33. Processing Plant 1,500 (100% private) workers,thecompanymakessparkplugs, Al-OuryFoodProcess Plant (Ba’quba) (100% 1,500 waterheaters,electricaltransformers, private) ovens,andceilingfans,whichitsellspri- Nassim al-Baradi marily to various GOI ministries.225 Date Processing Plant 1,000 (privately owned by Although the security situation caused Jordanian interest) ittoceaseoperationsforatimein2007,its Al-Muqdadiya Milk 300 Factory (100% private) majorproblemsarenowmoremundane andmorepersistent.Irregularpowersup- Al-Khalis Medicinal Alcohol (51% public, 210 pliesoftendisruptproductionlines,and 49% private) modern management methods remain Khan Bani Sa’ad Water 200 Bottling Plant (n/a) largelyunknown.Moreover,theglobal Ba’qubabusinessdistrict. Baladrooz Water economic downturn of 2008 stymied businesses, comparing them with the 200 Bottling Plant (n/a) efforts to attract foreign investors, causing rest of Iraq.228 Al-Muqdadiya Chicken 100 an Egyptian-Jordanian consortium to Although they pre-date American Factory (n/a) back out of its initial commitment to pur- mallsbymillennia,suqs serve much Source: PRT Diyala, “Diyala Provincial Business and 226 Investment Organizations” (draft), 7/2011. chase51%ownershipinthecompany. thesamefunction,bringingtogethera Notwithstanding these challenges, PRT widevarietyofcommercialenterprises DiyalareportsthattheGOIrecentlyor- andserviceprovidersinonelocation.In deredmorethan$20millionofelectrical Diyala,about50%ofallsmallbusinesses transformers from DEI.227 are housed in suqs,asaretheofficesof many doctors, lawyers, and other profes- Small and Medium-sized Businesses sionals.Cognizantoftheirimportance WhilelargeSOEsdominatedmuchof tothelocaleconomy,AQIconducted Iraq’spre-warcommandeconomy,the operationsoutofbaseslocatedinside pasteightyearshavewitnessedtherise the suqs, which consequently suffered of smaller, independent businesses. More significant damage when U.S. and Iraqi than70%ofsmallandmedium-sized forcesconductedclearingoperations businesses in Diyala have been estab- aimedateliminatingtheseterroristnests. lishedsince2003.Ofthese,45%operate TheArubaSuqinal-Muqdadiya,Diyala’s in the trade sector, selling consumer largest market, suffered extensive dam- goodsorotherproductsoutofsuqs (Ara- ageasaresultofsuchoperations.229 Table bic for markets) or small shops. Figure D.2summarizesU.S.-fundedeffortsto Worker moves sheet metal at the Diyala State Electrical Company. (USF-I photo) D.7showsasectorbreakoutofthese refurbish Diyala suqs.230

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Table D.2 U.S.-funded Support for Diyala Suqs %of Provincial Number of Name Business Shops Assistance 2,500 Former headquarters of AQI in Diyala and a Aruba (al-Muqdadiya) 16 (200 open) major Coalition rehabilitation project Several Coalition projects have focused on West Ba’quba 10 1,500 rehabilitating this market CSP is rehabilitating this market and Khan Bani Sa’ad 10 1,500 coalitionforceshaveprovidedroughly SIGIRofficialsmeetwithDiyalaChiefJustice. $400,000 in microloans Baladrooz 7 75 Rehabilitated by Coalition forces theentireprovincialeconomy.Several Old Ba’quba 3 600 n/a officialsmentionedsectarianismasone I-CERP funds are currently being used to Al-Khalis 2 500 factor contributing to corruption, as un- rehabilitate this market qualifiedgovernmentofficialsusetheir Abu Sayda 2 500 CSP project submitted positionstoadvancethefinancialand Buhritz (Ba’quba) 1 250 Received some Coalition funding Al-Mulameen political interests of themselves and their 1250n/a (al-Muqdadiya) particular affiliations.234 Hibhib 0.5 150 CSPprojectsubmitted AccordingtoCommissionofInteg- Udain (1) 0.5 150 CSP project submitted rity(COI)officials,GOIanticorruption Udain (2) 0.3 75 Rehabilitated by Coalition forces agencies in Diyala focus their efforts on Khanaqin 0.3 75 n/a the capital, and they often lack the will Mandali 0.25 65 n/a andthemeanstocarrytheiroversight Source: PRT Diyala, “Overview of Major Suqs in Diyala,” 7/2011, pp. 35–36. to the provinces. They cited inadequate Rule of Law in May 2011, suggesting that the police resources—suchascars,personnel,office Citing recent increases in the overall arenowlesslikelytoroundupsuspects equipment, and funding—and pressure number of convictions, the province’s and detain them without conducting a from local officials and religious leaders chiefjudgeandchiefprosecutortold proper investigation.232 However, the chief as factors inhibiting their efforts.235 SIGIR that the Diyala judiciary, though prosecutor voiced concern over the quality FromJanuary1toMay31,2011,the facing profound challenges, is improving of some police. He said that these officers, COI reportedly referred 186 suspects itsperformance.Thechiefprosecutor drawnfromarmybackgrounds,haveless from Diyala to investigative judges noted that the magnitude and complexity respectforcourtorders.Thechiefprosecu- (IJs)forfurtheraction:139(75%)were ofcasesisthemainproblemfacingDiyala tor added that sometimes these problematic accused of violating Article 240, which judges. He stated that about 70% of recent officers will not release a prisoner despite a criminalizes the disobeying of direc- convictions involved terrorism matters. judge’sruling,whileothertimestheywill tionsgivenbyapublicofficial,and36 He said that, “before 2003, the worst case notarrestsomeoneeventhoughthecourt (19%)wereallegedtohaveusedforged wehadwasahomicidecase,”adding issuedavalidwarrantforthatperson’sde- educationalorprofessionalcertificatesto that,“backthen,wehandledabout175 tention. He also noted that there continue obtain employment or promotion. Thus, casesperyear.…Lastyearwehandled tobesomeilliteratepoliceofficerswho 94%oftheCOIcasessenttoIJsduring 880cases.”Inlookingaheadtotherest cannot perform basic job functions.233 that period involved relatively minor of2011,hesaidthatthecourtisontrack allegations,andnocasesinvolvingsenior to handle even more cases than in 2010, Corruption Diyalaofficialshadbeenforwardedfor having opened more than 500 new cases Diyala provincial government officials adjudication.236 betweenJanuaryandJuneofthisyear.231 described corruption in the province asrampant,notingthatpositionsthat Police should be occupied by skilled technocrats Living Conditions Accordingtothechiefjudgeandchief areinsteadfilledwithpatronageappoin- In meetings with SIGIR, Diyala officials prosecutor, the Iraqi police in Diyala tees whose loyalties lie with politicians expressedapervasivesenseofpessimism areimproving.Theycitedadecreasein inBaghdad.Sincegovernmentjobsare aboutthefutureoftheprovince.Asone thenumberofpre-trialdetaineesfrom oftentheonlyemploymenttobehad, governmentofficialsaid,“Ourfathers 2,500inNovember2010toaround1,200 corruptioninthepublicsectoraffects livedbetterthanwedid,andtheliveswe

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Figure D.8 powersituationimprovedsignificantly, Popular Dissatisfaction with Services Poverty in Diyala, by District, withtheloadservedbythenationalgrid Arecentsurveyof3,223Diyalaresi- 6/2011 increasing from 62% of estimated demand dentsconductedbyAl-NoorUniversal 0–15% 15–25% to 98%. But the situation began deteriorat- Foundation found widespread dissatis- 25–35% 35%+ ingin2010,andthisquarter,onlyabout factionwiththeprovisionofgovernment Kifri 65%ofestimateddemandwasserved:239 services. Only about 11% of respondents 98% characterized services as either good or 2009 Q4 Khanaqin verygood,while48%chosethelowest Al-Khalis possible descriptive category—bad—to Al-Muqdadiya describethestateofpublicservicesinthe

65% province.Respondentscitedfivemain 2011 Q2 244 Ba’quba 59% reasonsforpoorservices: Baladrooz 2007 Q2 • unstable security situation Whilesomeofthisdecreaseisattribut- • lack of government oversight able to increased demand during the •lowlevelsofcivicpride

Note: Data reflects the percentage of households reporting summer months and the proliferation • inadequate transparency and average expenditures in the lowest quintile, as measured nationally by the UN. of electronic devices, the percentage of accountability demandmetisthelowestithasbeenfor • sectarianism among government Source: IAU, “Diyala Governorate Profile,” 6/2011, www.iauiraq.org/gp/print/GP-Diyala.asp, accessed 6/27/2011. this period since 2007.240 officials have lived, as difficult as they have been, Diyala’s only indigenous power-gen- When asked whether services had theyarebetterthanthelivesourchildren erationcapacityisattheHimreenDam, improved over the past year, 14% said will lead.” These officials noted that with production this quarter averaging that they had, while 79% said they had DiyalaremainsdependentonBaghdad amodest12megawatts(MW).Thebulk remainedthesameordeteriorated.Dis- for jobs, subsidies, and other assistance, of the power consumed in Diyala is im- satisfactionovercleanliness,healthcare, andremarkedthateventheagricultural ported from Iran.241 The GOI’s Ministry education, public works, and availability sector—oncethedrivingforcebehind ofElectricitycurrentlyisintalkswith of fuel was voiced by 65%–80% of all theprovincialeconomy—isstagnantand theFrenchcompany,Alstom,about respondents;lackofpowerwascitedasa underperforming.237 building a 720 MW combustion-turbine problembymorethan82%.245 plantinMansuriya.242 Poverty Displaced Persons A 2009 GOI study listed Diyala as one Drinking Water AccordingtoPRTDiyala,morethan of Iraq’s five least-developed provinces, Diyala’s main water sources do not meet 60,000formerresidentsofDiyalaare alongwithMuthanna,Thi-Qar,Mis- theprovince’sneeds.Downstreamflows stilldisplaced,livingmostlyinBagh- san,andQadissiya.Anestimated33%of fromtheTigrisRiverandsmallerrivers dad, Najaf, Kerbala, and Sulymaniyah Diyalaresidentshaveincomesbelowthe originatinginIranandtheKurdistan provinces. In June 2011, the UN report- nationalpovertylineofabout$2.20per Region are insufficient supplements ed that 8% of Iraq’s internally displaced day, compared with a national average of totheprovince’smaindrinking-water persons(IDPs)resideinDiyala,making 23%.238 AsFigureD.8shows,thepoverty source, the reservoir formed by the itoneoftheprovincesmostaffected levelisgreatestinthewesternpartsof HimreenDam.TheUNreportsthat by the intercommunal violence that theprovinceandintheruralsouthern morethan40%ofallDiyalaresidents district of Baladrooz. suffer from the irregular availability of drinking water, a figure that rises to Electricity 74%inal-Muqdadiyadistrict.Moreover, Like most of Iraq, the estimated de- approximatelyhalfofallhouseholdsin mand for electricity in Diyala province al-Muqdadiya(47%),Kifri(53%),and outstrips the available supply, leading to Baladrooz(40%)districtsdrinkwater persistent power shortages, especially in directlyfromastream,river,orlake,al-

thehotsummermonths.Frommid-2008 though bottled water is readily available U.S.troopsconferwithlocalcitizensinDiyala. throughtheendof2009,theprovince’s in most cities and towns.243 (USF-I photo)

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Figure D.9 Figure D.10 Where IDPs Take Refuge, by District U.S.-funded Infrastructure Projects in Diyala Province, Kifri by Category and Fund, as of 9/2010 Al-Muqdadiya 204 % of $954.17 Million 9,456 0.2% Baladrooz Security & Justice ($280.54) 11,220 8.2% ISFF Defense Forces ($161.80) 9.7% Public Works & Water ($152.79) ISFF Interior Forces ($94.61) Khanaqin 12.1% 53.6% Ba’quba 14,035 62,128 Electrical ($94.57) Peacekeeping ($54.83) ESF $20.93 16.2% Health ($28.90) ISFF Al-Khalis Education ($28.59) $256.41 18,773 IRRF Transportation ($23.05) $409.92 Buildings ($12.66) Source: IAU, “Diyala Governorate Profile,” 6/2011, www.iauiraq.org/gp/print/GP-Diyala.asp, accessed 6/28/2011. Private-sector Development ($10.55) Communication ($4.28) CERP $266.91 followed the bombing of the Samarra Oil ($3.75) mosqueinFebruary2006.OfallDiyala International Development ($3.24) IDPs,83%originallyresidedwithinthe 0% 5% 10% 15% 20% 25% 30%

province.AsFigureD.9shows,more Note: Numbers affected by rounding.

than half of Diyala IDPs have taken Source: IRMS, Global Benchmark, 9/3/2010. refuge in Ba’quba district.246 During August–September 2008, U.S. Reconstruction Program • providing an $80,000 procurement more than 40,000 IDPs and refugees AccordingtoPRTDiyala,since2003,the grant to fund start-up costs associated returned to Diyala province. The rate of U.S.governmenthasspentmorethan with the establishment of the Diyala return dropped sharply after that, and $1.05 billion on infrastructure projects Economic Development Center in inApril2011,theUNreportedonly in Diyala province, or about $642 per December 2009.252 1,810 returns:247 resident.249 FigureD.10showsU.S.expen- USAIDisalsoworkingwithPRTDiyala 20,740 ditures in Diyala by project category and to establish the Diyala Small Business 8/2008 fund,basedoninformationprovidedin Development Center (SBDC). Plans for

13,840 September2010,bytheIraqReconstruc- this new organization are in the early 7/2008 tion Management System (IRMS). stages,andwhileUSAIDhasobtaineda building for the SBDC, it has not received USAID Operations in Diyala any funding to support it.253 1,810 4/2011 USAIDreportsthatitsInma agribusi- nessprogramhassupportedanumberof OtherU.S.ReconstructionEfforts In2009,theGOIcreatedaHigher initiativesinDiyalaprovince,including:250 InOctober2010,theU.S.ArmyCorpsof CommitteetoassistDiyalainestablishing •importingcommerciallytestedfruit Engineers(USACE)completedworkon theconditionstoenticedisplacedpersons treesandgrapevinestoenhancethe a$10.7millionregionalcommandobase to return to their homes. The Diyala qualityoflocalorchardsandvineyards inBa’qubafortheIraqiSpecialOpera- Initiative focuses on improving public ac- • supporting a microfinance lending tionsForces.ThisIraqSecurityForces cess to water, electricity, food, shelter, and institution that, to date, has disbursed Fund (ISFF) project was USACE’s largest infrastructure. The initiative is supported more than 300 loans valued at $976,200 reconstructioninitiativeinDiyala.Other bytheUNandtheU.S.government,with in the province significant USACE reconstruction proj- theU.S.AgencyforInternationalDevel- • providing training in a variety of ectscompletedinDiyalainclude:254 opment(USAID)andPRTDiyalaassist- specialized areas, including irrigation, • a $6.8 million, ISFF-funded location- ing in the implementation of governance livestockhusbandry,financialmanage- commandfacilitytosupportarein- andagriculturalprograms.AsofJanuary ment,andstrategicplanning forced Iraqi Army battalion stationed 2011,theGOIhadpaidalmost$30million • supportingtwomicrofinanceinstitu- in Baladrooz to compensate Diyala residents for dam- tionsinDiyalaprovince—al-Thiqaand •a$1.7million,IRRF-fundedprimary age caused by violence.248 al-Amman.251 healthcare center in al-Atheem

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TheDoSIraqStrategicPartnershipOffice reportedthecompletionoftwoprojects inDiyalasinceJuly2010:255 • Ba’quba General Hospital Surgi- calHealthCenter.Financed by the IraqReliefandReconstructionFund (IRRF)andexecutedbyUSACE,this $8.7 million project expanded the Ba’quba General Hospital’s surgical War-damaged Diyala suq. Diyala suq refurbished with U.S. assistance. health center. This three-story facility center includes a 50-bed intensive-care unit,20emergency-roombeds,and surgicalandtraumaoperatingrooms. • Baghdad-Kirkuk Carriageway South. This roadway-improvement projectrunningthroughDiyalawas executedbytheMinistryofConstruc- tionandHousingusingan$11.3mil- lion IRRF grant. ISPO reported that the only remaining projectitoverseesinDiyalaisanassess- KhanBaniSa’adisstilllyingunusedandincomplete.ThereissomediscussionamonglocalIraqiofficials 256 mentoftheKhanBaniSa’adprisonsite. thattheMOJmayturnitintoaworkingfacilitysomeday.However,asofJuly2011,theMOJhasonlyposteda fewsecurityguardsatthesite,mostofwhomrarelyreporttowork.(USACEphoto) SIGIR Oversight remainingworkontheprojectafter as“abandoned”whenthecontractwas In2004,theCoalitionProvisional investing approximately $40 million of terminatedweremissingfromthesite. AuthorityissuedataskordertoParsons theIRRF.Twomonthslater,USACE InJuly2011,GOIofficialsinDiyala Delaware,Inc.(Parsons),todesignand unilaterallytransferredtheprisontothe province informed SIGIR that the cor- construct the 3,600-bed Khan Bani Sa’ad GOI,althoughtheMinistryofJusticehad rectionalfacility,whichlocalsrefertoas Correctional Facility in Diyala prov- informed USACE representatives that it “thewhale,”remainedidle.258 ince. In June 2006, the U.S. government would not “complete, occupy, or provide Thisquarter,ISPOreportedthatit terminated the contract for default on security” for the facility.257 isstudyingthecurrentstatusofthe thepartofParsons,leavingthefacility InJune2008,SIGIRinspectedthe prisonsitetoconfirmpreviousassess- partially completed. Subsequently, the prison, finding construction deficiencies, ment results and assist in preparing an U.S. government awarded three suc- generally poor workmanship, and poten- estimateofhowmuchitwouldcostto cessor contracts to complete the work. tially dangerous conditions. SIGIR also renderthefacilityuseable.Thestudywill In June 2007, the U.S. government, determinedthatmostofthe$1.2million alsoexploreGOIinterest,ifany,inusing citingsecurityreasons,terminatedall inmaterialsthatthecontractorreported the site.259 ◆

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