Iraq Begins the Battle to Restore ‘State Dignity’

A member of Iraq's Counter Terrorism Service (CTS) looks on during a graduation ceremony at the CTS base in western Baghdad in August. (AFP)
A member of Iraq's Counter Terrorism Service (CTS) looks on during a graduation ceremony at the CTS base in western Baghdad in August. (AFP)
TT

Iraq Begins the Battle to Restore ‘State Dignity’

A member of Iraq's Counter Terrorism Service (CTS) looks on during a graduation ceremony at the CTS base in western Baghdad in August. (AFP)
A member of Iraq's Counter Terrorism Service (CTS) looks on during a graduation ceremony at the CTS base in western Baghdad in August. (AFP)

For the past 17 years, much has been said about the need to restore the authority and dignity of the Iraqi state, but little has been done to that end. The battle started with the American invasion in 2003 and is ongoing with Iran and Turkey’s violations of Iraq’s borders and the so-called resistance axis, comprised of a number of pro-Iran factions that possess weapons outside the control of the state.

These factions have been operating in line with Iran’s agenda in Iraq, which has established a “deep state” in the country. The battle is imminent, but the question remains: who will deal the first blow?

All prime ministers who preceded current Premier Mustafa al-Kadhimi have avoided an open confrontation with the “outlaws”. Nouri al-Maliki was the exception when he waged an offensive in 2009 against the Sadrists in al-Basra and al-Amara. Kadhimi was appointed to his post with the pledge to Iraqis to hold early and transparent elections and with them, restore the dignity of the state.

Reverse equation
Kadhimi’s opponents, starting with the armed factions and the Fatah bloc headed by Hadi al-Ameri, expected the new premier to overlook the militias’ firing of Katyusha rockets against American targets in Iraq, whether at the US embassy in Baghdad’s Green Zone, the capital’s international airport or the Taji military base.

Kadhimi, however, proved them wrong. Soon after coming to office, he sought “strategic” dialogue with the Americans, which would include discussions on their troop withdrawal from Iraq. The militias, wary of both parties’ intentions, delivered their own message with the nearly daily launch of Katyusha rockets against US interests. Undeterred, the PM went a step further by ordering a raid against the Kataib Hezbollah militia, detaining several of its members, in what was seen as a precedent in the confrontation between the state and armed groups.

His attempt to restore the dignity of the state took a misstep when all but one of the detainees were released. Adding insult to injury were the freed members who trampled on posters of the PM and other officials soon after their release.

Kadhimi believes that such reactions are to be expected, given that he has taken the bold step to buck the trend of his predecessors and wage a head-on “grinding” confrontation against the militias. He is likely expecting more losses, even personal ones, in the future. The PM still holds many cards in the confrontation, significantly that one remaining detainee, who is seen as a hefty catch. The detainee can help lead authorities to the sources of the armament of the militias, allowing security forces the opportunity to shift tactics by focusing on the source, rather than raid the factions’ headquarters.

Big night The morning of June 26 was eventful for Kadhimi, who had a busy schedule. It culminated with a midnight raid by the elite Counter-terrorism Service against the Kataib Hezbollah headquarters. It was a bold step by the premier, whose government is barely two months old.

The premier may have been hasty in his move. Sunni member of the parliamentary security and defense committee Mohammed al-Karbouli told Asharq Al-Awsat that the confrontation with the outlawed armed factions and militias is “inevitable, but it requires means and mechanisms so that the state does not lose its dignity in the process.”

He remarked that the PM was dragging the counter-terrorism units into this battle. The units have presented major sacrifices in the battle against ISIS and it may not be wise to involve them alone in the confrontation with the factions, Karbouli warned. “Neither the units, nor Kadhimi are qualified now to take on this role.”

The PM may be headed towards two losses: waging a losing battle and failure to achieve victory, while also creating divisions within the state and military institutions, he added. The first step should be building a strong and unified military that is “completely loyal to the state” until the conditions are ripe to launch the confrontation.

Head of the Center for Political Thinking in Iraq, Ihssan Shmary told Asharq Al-Awsat that Kadhimi broke the mold by appearing “more committed in implementing his ministerial agenda, especially in regards to limiting the possession of weapons to the state.”

By waging a confrontation with the outlawed factions, he is demonstrating that he is acting away from political pressure and dictates, he added.

He warned that the raid will have “major political repercussions,” explaining that Kadhimi does not boast a political bloc. The factions do and they may come together to impede his government’s work. Moreover, the militias would have now realized that Kadhimi is not willing to turn a blind eye to their practices, which would give them the incentive to resolve their disputes and unite to confront this new challenge. Kadhimi will then have to focus on which approach to take, such as his ability to stall and garner political and popular support.



Borderless Europe Fights Brain Drain as Talent Heads North

Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
TT

Borderless Europe Fights Brain Drain as Talent Heads North

Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo

Until recently aerospace engineer Pedro Monteiro figured he'd join many of his peers moving from Portugal to its richer European neighbors in the quest for a better-paid job once he completes his master's degree in Lisbon.
But tax breaks proposed by Portugal's government for young workers - up to a temporary 100% income tax exemption in some cases - plus help with housing are making him think twice.
"Previous governments left young people behind," said Monteiro, 23, who is studying engineering and industrial management at the Higher Technical Institute in the Portuguese capital. "The country needs us and we want to stay but we need to see signs from the government that they are implementing policies that will help."
Monteiro cites in particular the cost of buying or renting a home amid a housing crisis aggravated by the arrival of wealthy foreigners lured by easy residency rights and tax breaks, Reuters said.
He is doubtful the government's new measures will be enough.
"Some of my friends are now working abroad and earn substantially more money... and have better career development opportunities," he said. "I'm a little bit skeptical concerning my job opportunities here in Portugal."
Portugal is the latest country in Europe to seek to tackle a brain drain holding back its economy. Tax breaks for young workers in the budget currently going through parliament will take effect next year and could benefit as many as 400,000 young people at an annual cost of 525 million euros.
Talent flight to wealthier countries of the north is a problem Portugal shares with several others in southern and central Europe, as workers take advantage of freedom of movement rules within the trade bloc. Countries including Italy have tried other schemes to counter the flight, with mixed results.
By exacerbating regional labor shortages and depriving poorer countries of tax revenues, it is yet another hurdle for the EU as it tries to improve its ebbing economic growth while addressing population decline and lagging labor productivity.
Donald Trump's victory in US elections this month raises the stakes, with the risk of across-the-board trade tariffs on European exports of at least 10% - a move that economists say could turn Europe's anaemic growth into outright recession.
About 2.3 million people born in Portugal, or 23% of its population, currently live abroad, according to Portugal's Emigration Observatory. That includes 850,000 Portuguese nationals aged 15-39, or about 30% of young Portuguese and 12.6% of its working-age population.
More concerning still is that about 40% of 50,000 people who graduate from universities or technical colleges emigrate each year, according to a study by Business Roundtable Portugal and Deloitte based on official statistics, costing Portugal billions of euros in lost income tax revenue and social security contributions.
DEMOGRAPHIC HELL
"This is not a country for young people," said Pedro Ginjeira do Nascimento, executive director of Business Roundtable Portugal, which represents 43 of the largest companies in the nation of 10 million people. "Portugal is experiencing a true demographic hell because the country is unable to create conditions to retain and attract young talent."
Internal migration within the EU is partly driven by the disparity in wages between its member states. Some economic migrants also say they are looking for better benefits such as pensions and healthcare and less rigid, hierarchichal structures that give more responsibility to those in junior roles.
Concerns are mounting over the long-term viability of Europe's economic model with its rapidly ageing population and failure to win substantial shares of high-growth markets of the future, from tech to renewable energy.
Presenting a raft of reform proposals aimed at boosting local innovation and investment, former European Central Bank chief Mario Draghi said in September the region faced a "slow agony" of decline if it did not compete more effectively.
Eszter Czovek, 45, and her husband are moving from Hungary to Austria, where workers earn an average 40.9 euros ($29.95) per hour compared to 12.8 euros per hour in Hungary, the largest wage gap between neighboring countries in the EU.
The number of Hungarians living in Austria increased to 107,264 by the beginning of 2024 from just 14,151 when Hungary joined the EU.
Czovek's husband, who works in construction, was offered a job in Austria, while she has worked in media and accounting at various multinationals. She cited better pay, pensions, work conditions and healthcare as motives for moving. She also mentioned her concern over the political situation in Hungary, which she fears might join Britain in leaving the EU.
"There was a change of regime here in 1989 and 30 years later we are still waiting for the miracle that will see us catch up with Austria," Czovek said of the revolution over three decades ago that ended communist rule in Hungary.
Since Brexit, the Netherlands has replaced Britain as a preferred destination for Portuguese talent while Germany and Scandinavian countries are also popular.
Many Europeans still head to the United States in search of better jobs - about 4.7 million were living there in 2022, according to the Washington-based Migration Policy Institute, which nonetheless notes a long-term decline since the 1960s.
In 2023, 4,892 Portuguese emigrated to the Netherlands, surpassing Britain for the first time, which in 2019 received 24,500 Portuguese.
At home, they face the eighth-highest tax burden in the Organization for Economic Co-operation and Development (OECD) even as house prices rose 186% and rents by 94% since 2015, according to property specialists Confidencial Imobiliario.
A single person in Portugal without children earned an average of 16,943 euros after tax in 2023 compared to 45,429 euros in the Netherlands, according to Eurostat.
Portugal will offer under 35s earning up to 28,000 euros a year a 100% tax exemption during their first year of work, gradually reducing the benefit to a 25% deduction between the eighth and tenth years.
Young people would also be exempted from transaction taxes and stamp duty when buying their first home as well as access to loans guaranteed by the state and rent subsidies.
"We are designing a solid package that tries to solve the main reasons why the young leave," Cabinet Minister Antonio Leitao Amaro said in an interview with Reuters.
'THINGS WON'T CHANGE'
Leitao Amaro said he did not know for sure if the tax breaks would work but that his government, which came into office in April, had to try something new.
"If we don't act ambitiously, things won't change and Portugal will continue down this path," he said.
The Italian government has already found that tax breaks used as incentives are costly and open to fraud.
In January, Italy abruptly curtailed its own scheme that was costing 1.3 billion euros in lost tax revenue, even as it lured tech workers such as Alessandra Mariani back home.
Before 2024, returners were offered a 70% tax break for five years, extendable for another five years in certain circumstances. Now, it plans to offer a slimmed-down scheme targeting specific skills after it attracted only 1,200 teachers or researchers - areas where Italy has a particular shortage.
Mariani said the incentives were key to persuading her to return to Milan in 2021 by allowing her to maintain the same standard of living she enjoyed in London.
"Had the opportunity been the same without the scheme, I would not have done it at all," said Mariani, now working at the Italian arm of the same large tech company.
With her tax breaks poised to be phased out by 2026 unless she buys a house or has a child, Mariani faces a drop in salary and she said she's once again eyeing the exit door.