Iraq is suffocating under an oil slick of corruption

Iraq is suffocating under an oil slick of corruption
Comment: Iraq is among the world's most corrupt countries, with politicians creaming millions from the state and adding to the instability choking the nation, says Mundher al-Adhami.
4 min read
24 Apr, 2015
Iraqis show their contempt for their government, but nothing changes [AFP]

How corrupt can a politician be before they are held responsible in a democracy? Well, it depends on which democracy you live in. If you happen to be in Iraq, you can go as far you like.

Corruption in Iraq is the norm, so much so that politicians regularly accuse each other of corruption to deflect accusations against themselves.

In one of the latest phony episodes, Hassan Salim, an MP, accused the presidency of parliament of corruption over the $1m cost of setting up a parliamentary website. 

Salim called the figure "scary and alarming" - an irony given he gets close to half of that for merely being an MP, thanks to the lavish entitlements the members voted themselves.

Such cat-calling and personal insults are top-draw entertainment on satellite television. But they are also a distraction from the big issues facing Iraqi, starting with the main revenue of the country, oil.

Transparency International Corruption Index for the year 2014 ranks Iraq 170 in a list of 175 countries for public sector corruption, only better than Somalia, South Sudan, Afghanistan, Sudan and North Korea.

Chief among the reasons is corruption in the oil sector. Its sale in Iraq is still unmetered - meaning the government does not have an accurate measurement of what constitutes 95 percent of its revenue.

Actual amounts of crude oil produced, transported and exported are not properly recorded. Imagine the money to be made by taking just 0.1 percent of the three million barrels estimated to be produced a day in southern Iraq. The scale of corruption is many times this amount.

     Such cat-calling and personal insults are top-draw entertainment. But they are also a distraction from the big issues.

What happen to the income that actually entered the government coffers? An report published in Arabic earlier this month quotes an MP from the Kurdish Tagheer block, Masood Haider, also a vice-chairman of the parliamentary finance committee.

He states that Iraq's official income from the sale of oil since 2006 to 2014 amounted to about $550bn, and that 60 percent of that amount, or about $360bn, was sold in the currency auction, organised by the Central Bank of Iraq for Iraqi business to fund their purchases abroad.

He refers to evidence that much of these are smuggled out of the country for private gains. The MP highlighted the case of an "unnamed" official who managed to buy hard currency from the auction and had transferred $550m out of the country within a year.

Many Iraqis believe that the prime minister's control of the central bank, the judiciary and most of the so-called independent bodies has led to the use of a huge proportion of Iraqi funds for the support of Iranian economy in the face of international sanctions, for arms purchases by the Syrian regime, for recruiting and arming Shia militias.

Rumour abound that it is also used to buy the loyalty of media outlets from TV channels to websites and blogs.

A recent book, Corruption in Iraq, by Moussa Faraj, the former chairman of the country's Integrity Commission, gives documented examples over an 11-year-period.

Faraj notes that the Iraqi annual budget is more than the total budgets of four neighbouring countries: Jordan, Syria, Lebanon and Egypt, bearing in mind that Iraq's population does not exceed one-third of the population of Egypt.

As expected Faraj has been hounded out of office and out of the country, as with all who dare to raise such issues, like his colleague Judge Rahim al-Ogaili who now lives in Erbil outside the Baghdad government's reach.

Faraj and others looked at the extent of corruption in the army, finding a fraudulent register of tens of thousands of "ghost officers", the sale of military posts and phony procurement deals. Many believe this level of corruption was the main reason behind the fall of one-third of Iraq to the Islamic State group.

Sarah Chayes, a US reporter and author, says in her book Thieves of State: Why Corruption Threatens Global Security that corruption is the real reason for the chaos enveloping the Arab world, Africa and Eastern Europe.

In an interview with BBC Today she elaborated: "Since the late 1990s, corruption has reached such an extent that some governments resemble glorified criminal gangs, bent solely on their own enrichment. These kleptocrats drive indignant populations to extremes -ranging from revolution to militant puritanical religion."

Here we see that what starts with petty practices, such as officials favouring their own folk over qualified citizens, or pilfering public money for private gains, can gradually morph into leaders stashing billions and arming their own sectarian militias for private gain, and result in the explosions we struggle to understand.

Fighting corruption is the main step in fighting terrorism. You cannot win the second without winning the first.