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Iraq: Overview of Corruption and Anti-Corruption www.transparency.org www.cmi.no Iraq: overview of corruption and anti-corruption Query Please provide an overview of corruption and anti-corruption efforts in Iraq. Purpose become increasingly aware of the enormous corruption challenges it faces. Massive embezzlement, We would like to provide all country offices with an anti- procurement scams, money laundering, oil smuggling corruption country profile to inform their contribution and widespread bureaucratic bribery have led the portfolio analysis country to the bottom of international corruption rankings, fuelled political violence and hampered Content effective state building and service delivery. 1. Overview of corruption in Iraq Although the country’s anti-corruption initiatives and framework have expanded since 2005, they still fail to 2. Anti-corruption efforts in Iraq provide a strong and comprehensive integrity system. 3. References Political interference in anti-corruption bodies and politicisation of corruption issues, weak civil society, insecurity, lack of resources and incomplete legal Caveat provisions severely limit the government’s capacity to This answer does not extensively deal with the efficiently curb soaring corruption. Ensuring the integrity specificities of the Kurdistan Regional Government of the management of Iraq’s massive and growing oil (KRG) and primarily focuses on corruption and anti- revenue will therefore be one of the country’s greatest corruption in the rest of Iraq. challenges in the coming years. Summary After a difficult beginning marked by institutional instability, Iraq’s new regime has in recent years Author(s): Maxime Agator, Transparency International, [email protected] Reviewed by: Marie Chêne, Transparency International, [email protected]; Finn Heinrich, Ph.D, [email protected] Date: April 2013 Number: 374 U4 is a web-based resource centre for development practitioners who wish to effectively address corruption challenges in their work. Expert Answers are produced by the U4 Helpdesk – operated by Transparency International – as quick responses to operational and policy questions from U4 Partner Agency staff. Overview of corruption and anti-corruption in Iraq 1. Overview of corruption in In spite of the impact of wars and sanctions on Iraq’s economy, the country has experienced a strong Iraq economic recovery in recent years, mostly due to its substantial hydrocarbon reserves. Yet despite oil wealth and a high forecasted global growth for 2013 (14.7%) Background (IMF 2012), the economy outside the hydro-carbon Iraq’s recent history has been marked by violence and sector remains relatively weak and unable to create political instability. The radical change in the Iraqi enough jobs for its growing workforce, leading to political setting that followed the toppling of Saddam unemployment levels of at least 20%, and a per capita Hussein’s regime by the US-led coalition in 2003 has GDP that only regained 1980 level in 2011. In addition, led in the first years to an explosion of ethno-sectarian 10 years after the end of the war and despite massive violence that peaked in 2006-2007 and disrupted most investments, Iraq still fails to deliver basic services governmental and economic activities (ICG, 2011). efficiently and 23% of Iraqis still live in absolute poverty Although the level of violence has been significantly (UN, 2013). reduced since 2008, it is still a dominant feature in several provinces. In the meantime, the new regime, which was established as a federal, parliamentary Extent of corruption democracy with limited executive powers through the The events that followed the 2003 invasion created adoption of a new Constitution by referendum in 2005, numerous opportunities for corruption with relative has been challenged in several ways. impunity. Although there is evidence that corruption was already widespread under the Saddam Hussein Shia Prime Minister Al-Maliki, who has been serving and Baath party regime, including through the UN oil for since 2006, has been accused of concentrating powers food programme fraud scheme, there is a broad in his hands, including by bringing under the consensus that corruption has peaked after 2003. executive’s control constitutionally independent state (Foreign Policy 2012) institutions, silencing dissents and sidelining its Sunni allies in early 2012, as the last US troops were leaving As in other conflict-torn countries, the post 2003 the country (Freedom House, 2012). In the winter of invasion has been characterized by a massive influx of 2011 and again in early 2013, a series of Sunni- reconstruction and state-building resources, eased by dominated popular protests in key provinces challenged the lifting of international sanctions. This massive influx Mr Al-Maliki’s government, pushing demands for the has overwhelmed the spending, management and liberation of prisoners they claimed were unjustly held oversight capacities of the weakened and deeply under anti-terrorism laws, asking for better service disorganised Iraqi public sector. (OECD, 2009; ICG delivery, protesting against the end of corruption, and 2011) demanding a better use of the country’s massive oil income. Although prominent voices called for leaving This phenomenon was not limited to Iraqis, as ethno-sectarian divides aside, these remain a core American reconstruction initiatives also faced significant element of Iraqi politics and the struggle for power, oversight issues. The US Special Inspector General for which manifests itself in key legislation, nominations to Iraq Reconstruction estimates, in its final report, that key positions in the public sector, debates on corruption 40% of the reconstruction projects assessed had major scandals and political violence. (ICG 2011, SIGIR 2012) deficiencies, including overcharging by subcontractors, expenditures unaccounted for, waste and fraud. (SIGIR, The Kurdistan region (north) has been de facto 2013) autonomous from Baghdad since 1991. Given this specificity, it has been relatively spared by the There is a broad consensus that corruption is insecurity of the post-2003 period and has known widespread in Iraq and that it constitutes a threat to higher stability and investment (Bertelsmann state building efforts. It has even been called ‘the Foundation, 2012). Under the current constitution, the Nation’s second insurgency’ by Prime Minister Al-Maliki Kurdistan Regional Government is considered as a in 2006 (SIGIR, 2013). As a consequence, the country federated entity of Iraq. Yet Disputes over territories has consistently performed poorly in the past decade in and oil revenue have led to tensions with Baghdad. As most global corruption indicators. a result, Kurdistan has experienced different corruption dynamics from the rest of Iraq. (ICG, 2012) The Corruption Perception Index has repeatedly ranked Iraq amongst the worst-performing countries. In the www.U4.no 2 Overview of corruption and anti-corruption in Iraq 2012 CPI, Iraq was ranked 169th out of 175 countries, In the Global Corruption Barometer of 2011, 56% of with a score of 18 out of 100. (Transparency respondents declared having paid a bribe in the 12 International, 2012). In line with these findings, Iraq was months preceding the survey. The Police, Customs and ranked in the bottom 10 percentile in terms of control of the Judiciary were the three institutions where the most corruption in the World Bank’s 2011 Worldwide bribes were paid. (Transparency International, 2011). Governance Indicators. Scores on other dimensions are These results are partly confirmed by the monthly not as bleak, but Iraq remains in the bottom quintile of bribery surveys of public offices organised by the Iraqi the ranked countries. (World Bank, 2011) Commission of Integrity. For January 2013, 3% of respondents declared having paid a bribe during that According to the 2011Global Corruption Barometer, month alone. Passports, taxes and oil distribution 77% of the Iraqi respondents perceive that corruption offices were the worst offenders, with up to 23% of had increased over the past three years, while only 4% users declaring having paid a bribe in selected passport estimated that it had decreased. (Transparency offices. In both surveys, the first reason given for paying International, 2011) bribes is “speeding things up”. (Transparency International, 2011; Commission of Integrity, 2013). Business surveys show a similar picture, although more nuanced. The World Banks’s Enterprise survey The Iraq Knowledge Network (IKN) 2011 survey(, jointly indicates that for 62% of surveyed firms corruption is a organised by the UN and Iraqi authorities, finds lower major obstacle to conducting business. The survey bribery rates, findings also points to the Police as the further estimates that a bribe is requested in 33.8% of institution most likely to request bribed (12% bribe business transactions with the public sector. While both prevalence), followed closely by tax and land registry these overall scores are better than the MENA average, offices. This survey also shows important regional there are variations across regions and types of variations: 29.3% of citizens reported paying bribes in enterprises: for instance, rates for medium-sized Baghdad, against 3.7% in Kurdistan. (IAIU Iraq, 2012) enterprises alone are generally higher than for other businesses. In the Kerbala region, 89% of firms said Surveys on business bribery also show high levels of they were expected to give a gift to public officials to bureaucratic corruption: according
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