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U4 Helpdesk Answer U4 Helpdesk Answer U4 Helpdesk Answer 2020:24 11 December 2020 AUTHOR Iraq: Overview of Jennifer Schoeberlein corruption and anti- [email protected] corruption REVIEWED BY Saul Mullard (U4) Since the fall of Saddam Hussein in a US-led military [email protected] operation in 2003, Iraq has struggled to build and maintain political stability, safety and the rule of law. Deeply Matthew Jenkins (TI) entrenched corruption continues to be a significant problem [email protected] in the country and a core grievance among citizens. Among the country’s key challenges, and at the root of its struggle with corruption is its consociationalist governance system, known as muhasasa, which many observers contend has cemented sectarianism, nepotism and state capture. RELATED U4 MATERIAL Consecutive governments since 2003 have promised to Influencing governments on anti- tackle corruption through economic and political reform. But, corruption using non-aid means as yet, these promises have not been followed by sufficient Iraq: 2015 Overview of action. This is partly due to an unwillingness to tackle the corruption and anti-corruption systemic nature of corruption, weak institutions ill-equipped to implement reform efforts and strong opposition from vested interests looking to maintain the status quo. As a result, Iraq is left with an inadequate legal framework to fight corruption and with insufficiently equipped and independent anti-corruption institutions. Helpdesk Answers are tailor-made research briefings compiled in ten working days. The U4 Helpdesk is a free research service run in collaboration with Transparency International. Query Please provide an overview or corruption challenges and anti-corruption efforts in Iraq. MAIN POINTS Contents — A recent history of political instability, violence and authoritarianism have left 1. Introduction Iraq with weak institutions, weak rule of 2. Drivers of corruption law and vested interests resistant to 3. Scale of corruption reform. 4. Key areas affected — Sectarianism has decreased in recent 5. Anti-corruption efforts and their effectiveness years, allowing for a greater focus on 6. References issue-based politics. But it is still deeply entrenched in Iraq’s governing system, Introduction which is at the root of many of the country’s corruption challenges. After years of violent conflict and near state collapse, post-ISIS Iraq is faced with a multitude of — The state’s dominant position in the mutually reinforcing and overlapping challenges economy, an underdeveloped private surrounding security, socioeconomic development sector, overreliance on oil and the role of militias have facilitated high levels of and governance. state capture. Weak institutions, inadequate checks and balances, — Recent years have seen citizen widespread clientelism and patronage, an perceptions about corruption worsen ineffective and bloated bureaucracy, a rentier and trust in government and its economy and an informal power-sharing institutions declining, indicating a agreement along sectarian lines are all hampering growing gap between citizens and the the country’s democratisation as well as state. government performance and service delivery (BTI 2020 and Hasan 2018). — A powerful protest movement against corruption emerged in recent years Persistent socioeconomic challenges, including which, in a first, cuts across sectarian high unemployment, entrenched corruption and lines and makes concrete demands on elite capture, a weak private sector unable to government, pressuring the latter to absorb the workforce and inadequate service issue more meaningful reforms. delivery, all made worse by an over-reliance on oil, have led to an erosion of trust between the state corruption (BTI 2020; Hasan 2018; NDI 2019; and its citizens. This frustration has erupted in World Bank 2020). widespread protests in recent years demanding better basic services, jobs and an end to widespread U4 Anti-Corruption Helpdesk Iraq: Overview of corruption and anti-corruption 2 While the intensity of violent conflict after the will consider recent reform efforts to assess their defeat of ISIS has decreased, the country still faces potential impact. armed paramilitary forces, struggles to integrate former insurgents, and has been only partially able Drivers of corruption to enforce its monopoly on the use of force (BTI 2020). The reasons and drivers for high levels of corruption in Iraq are manifold, including violent Faced with such an immense set of challenges, the conflict, the legacy of authoritarianism, weak rule country’s anti-corruption framework, both legal of law, poor quality institutions and high levels of and institutional, has proved wholly inadequate. clientelism. But maybe most commonly, Iraq’s Moreover, while previous governments have present-day corruption challenges can be traced repeatedly promised to tackle the country’s back to the sectarian power-sharing agreement widespread corruption challenges, these promises (Muhasasa) that was instituted after the US-led have so far been largely ineffectual. Reform efforts invasion of 2003. have shied away from tackling the structural and systemic roots of corruption inherent in Iraq’s Legacy of authoritarianism and violent system of governance after 2003 due to substantial opposition from vested interests (Al-Mawlawi conflict 2020; Kuoti 2018; Pring 2015a). Iraq’s corruption challenges are heavily linked to the country’s political challenges following the US- The lack of improvement in anti-corruption and led military intervention and the fall of the regime economic development has led to the emergence of of Saddam Hussein in 2003, and the unstable a nationwide protest movement that started in political settlement that followed. 2015 and re-emerged in 2019. Curbing widespread corruption was one of the key demands of The years of the Ba’ath regime under Saddam protesters. After an increasing number of Hussein created a highly centralised political protesters were killed in clashes with the police and structure with high degrees of clientelism based on militias and the economy ground to a halt, Prime party allegiance and weak institutions. Minister Abdul-Mahdi resigned in late 2019 and was replaced by Mustafa al-Kadhimi who took After a US-led intervention toppled the Saddam office in May 2020 (Dodge 2019 and Worth 2020). Hussein regime in 2003, significant effort was put into institution building and democratisation, often This Helpdesk Answer will look at the main at the behest of US and other donors. But corruption challenges facing the country today, democratisation and institution building in post- including corruption’s main drivers and the sectors Saddam Hussein Iraq ran into immediate troubles, most affected. It will then look at the country’s both due to internal and external factors. anti-corruption framework and discuss why anti- corruption efforts have largely failed until today. While Sadam Hussein was still in power, exiled Iraqi opposition figures drafted a governing system It is worth noting that while Iraq has witnessed for a post-Ba’ath Iraq, which would represent the significant political upheaval and changes in the different ethnic groups of the country in a last two decades, to the extent possible, this paper U4 Anti-Corruption Helpdesk Iraq: Overview of corruption and anti-corruption 3 proportional power-sharing structure. This idea This has led to billions of U.S. dollars being wasted was taken up by the US-led forces rebuilding Iraq due to corruption. In one particularly egregious after the fall of Saddam Hussein, who viewed example, 12 billion USD were shipped to Iraq in sectarianism as a major barrier to the emergence of cash, at the request of Paul Bremer, then the head a stable political settlement (Dodge 2018). of the Coalition Provisional Authority, 8.8 of which were later entirely unaccounted for (Teather 2004). Yet instead of leading to an inclusive system of Furthermore, more than 80% of reconstruction governance, the resulting power-sharing agreement contracts between 2003 and 2004 were awarded to cemented elite rule, lacked accountability and US companies, often following no or extremely transparency, and ended up an obstacle to the limited bidding processes (Northam 2007 and UN democratisation process rather than a guarantor. Human Rights Council 2013). (See more in the next section). Of the over 138 billion USD in government In focusing on a military rather than a diplomatic contracts awarded, the biggest chunk went to solution, in the years that followed, the US and its Kellogg Brown & Root, a former Halliburton alliance poured significant support, both financial subsidiary, which received contracts worth almost and logistical, into the Iraqi military while turning 40 billion USD, some of which without the a blind eye to the regime’s corruption, appropriate tendering process. Accusations sectarianism, nepotism and the security forces’ surrounding Halliburton’s engagement in Iraq human rights violations (Chayes 2014 and Chayes included cronyism (due to its former CEO being & Wehrey 2014). According to Chayes and Wehrey then U.S. Vice President Dick Cheney), as well as (2014) the resulting instability, lack of regime accusations of overcharging, kickbacks, and bribery legitimacy and citizen frustrations have contributed (Teather 2004). Similarly, other U.S contractors, as to Iraqi government failure and internal strife. well as military representatives and former Iraqi They have also contributed to the advance of ISIS exiles
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