After seven months of a newly appointed administration, Iraq's slow yet steady progress is visible to friends and foes alike. The days in which political crises were solved by escalating into larger crises are behind, replaced by regular announcements of signings mega projects, such as the TotalEnergy deal that was stalled for over 13 years, the Fifth-Round licensing contracts that was delayed for four years, and the launch of the Development Road project that will tie the region together. Progress at last!
The situation is by no means perfect – Iraq is facing tough political, socio-economic and security challenges. But it is enjoying political and security stability that has not been seen for the past two decades. Rather than judging the new reality on the ground, many Iraq observers continue to see the country through the lens of the past, cast a shadow of doubt over developments, and regard the current tangible progress, under Prime Minister Mohammed Shi Al-Sudani’s Administration, as temporary. However, a fresh look at the evidence, and hard data, suggests otherwise.
Employment versus instability
The new Government faced a harsh reality in the form of hundreds of thousands of unemployed Iraqis, entitled according to the 2021 budget law and previous government orders to be employed. Failing to deliver on these promises can provoke anger and violent protest among the youth and threaten the country's stability, particularly if exploited politically. On the other hand, employing large numbers of people will significantly burden public expenditure.
Substantial debates took place as to what could be done within the boundaries of the law. The Government finally chose to honor its legal obligations and employ these people while placing a freeze on further public employment for the next three years.
The new 2023 Budget Law will add 729,000 employees to the public sector. However, 655,000 of these jobs (to the value of 7.3 trillion IQD) were imposed by binding decisions and laws passed over the past three years.
Among them 400,000 temporary contracts turned permanent by 2021 budget law. Some 71,000 University graduates and 39,000 healthcare professionals for year 2022. Some 35,000 members of the Popular Mobilization Force (PMF) "nullified contracts" were paid until December 31, 2022, under the Emergency Law for Food Security and Development and the Ministry of Finance order 14713 (dated June 15, 2022).
An additional 104,000 employees on "nullified contracts" returned to work by a government order signed on October 24 2022, only three days before the new Government was sworn in. They include the Ministries of Defense (37,588) and Interior (29,808), and the PMF (31,875).
Reforming the security sector
Prime Minister Al-Sudani announced on May 26 that "the time has come for us to reconsider reforming the security institutions." This is what his government is doing.
Such reforms include the long-awaited rebuilding of the capabilities of Iraq's regular armies. For the first time since 2017, $1 billion is allocated to the MoD budget, and 10,000 soldiers will be joining the ranks of the Iraqi Army. The Ministry of Interior will recruit 37,000 new police among the youth, while the Counter Terrorism Service is allocated 3,500 fighters and 1,500 police recruitment in Sinjar.
To bolster the image of stability and security, the Government is working on moving all military bases outside of Iraq's cities. It has allocated enough funds in the 2023 budget for the PMF, the MoD and other security forces to build these bases.
Applying rule of law is priority and the Government is taking strong and swift measures against all displays of arms among civilians. The fight against organized crime is priority, such as drug trafficking and oil smuggling. The dismantling of the largest smuggling racket in the south in November 2022 is an excellent example of cutting the funds to rogue groups.
Fighting corruption
Corruption is one of the most challenging fights the current Government faces, and taken critical actions against corrupt officials and institutions.
According to an internal report issued by the Integrity Commission (IC), thousands of public sector employees have already been referred to courts for prosecution; including high-ranking officials, such as members of parliament and former ministers.
In the past six months alone, 4,518 summons have been issued, including 32 ministers and 160 director generals and higher. Also, 1,702 arrest warrants were issued, among them 93 high-ranking officials. IC officials conducted 495 operations that resulted in 285 arrests of public sector employees. A total of 1,658 cases were referred to the courts. The IC states that 3.1 trillion IQD have been protected. Progress has been made on the "Heist of the Century" too. Part of the funds have been recovered, while the pressure is mounting on those accused and wanted by the judiciary.
Economy is key
Large-scale state employment is not sustainable, and the country's focus must shift to economic development and job creation through the active participation of the private sector.
Its Private Sector Social Security Law was endorsed by the parliament on May 17, entitling private sector employees to pensions. In parallel, the 2023 Budget Law includes $36 billion for projects in all sectors. The Development Road project will add billions of dollars to the Iraqi economy and offer more than 100,000 jobs. Establishing industrial zones on the borders with Iraq's neighbors and boosting manufacturing are a few other examples that illustrate how the economy will be strengthened and diversified. The announcement of the sixth licensing round will bring in more investment and develop the gas sector.
The road ahead
The Government is under no illusion that the challenges facing Iraq are immense. However, it is driven by a vision for a better Iraq and has the will to make tough decisions.
Over the past two decades, Iraq has been seen as an arena of conflict and a place to settle scores among adversaries. The Iraqi people no longer want to be part of this equation; they want to be like all other nations, enjoying the immense fortunes the country offers.
Through "productive diplomacy", the Government is working hard to link the region's interests together and turn Iraq into a big workplace where businesses can thrive, the private sector can flourish, and youths can find employment and a better future.
The thousand-mile journey starts with a single step. This Government has made strides and taken many steps and now needs to pick up the pace and continue in the right direction to rebuild the country as the Iraqi people desire.
Iraq and its new Government should be given more than just the benefit of the doubt. They deserve the opportunity and the full support of the international community.
