Putting Iraq Back Together

The war against ISIS has wrought intense devastation across Iraq. How can the Iraqi government, with international assistance, overcome financial restrictions to reconstruct the country?

This article was originally published at the Education for Peace in Iraq Center (EPIC), as part of a weekly column discussing security and humanitarian developments in Iraq. 

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The war against ISIS has etched new scars into Iraq’s terrain, brutal illustrations of the latest conflict in a country that has not been at peace for nearly 36 years. Aside from the social and political costs of the ISIS incursion, intense damage wrought on cities, villages, and their hinterland over the past two years leaves the Iraqi people and their government with the massive task of infrastructure reconstruction.

The reconstruction process presents an opportunity to bolster Iraq’s existing civil society, empower local populations, and foster new relationships between policymakers and their constituencies. Yet, serious challenges – including economic crisis and government inefficiency – could handicap this effort. Only with serious international engagement in a post-ISIS Iraq, both in terms of humanitarian funding and political guidance, can these obstacles be overcome.

The country needs a coherent strategy for restoring its ravaged cities, infrastructure, and service provision to create an environment in which vital reconciliation and governance development processes can advance.

Scorched Earth Policy

The fight to liberate ISIS-held areas is often waged in urban or semi-urban settings where combat is vicious, intimate, and intensely destructive. The so-called Islamic State’s scorched earth policy, as well as the actions of non-state militia groups in cleared areas, compound the impact of battle in contested zones.

When the Iraqi Army pushed ISIS from Qayarrah, 60 km south of Mosul, on 28 August 2016, retreating militants ignited the 19 oil fields along the town’s outskirts. On 23 October, they set fire to the Mishraq sulfur plant to the north, spreading a 5 km toxic cloud and forcing over 200 families to evacuate their homes. Today, an acrid stench of sulfur and poisonous fumes permeate the city, even as civilians return to their homes from displacement camps and informal settlements. Fire crews have thus far been unable to extinguish the fires, and civilians are left to choke on the thick smoke that, as Al Jazeera reports, “spread[s] at the mercy of the wind.”

The apocalyptic fires, burning for over three months, have coated everything – trees, animals, buildings, and children – in dull gray. Across this important agricultural region (farming is the region’s most important source of income), oily residue has killed crops or rendered large swathes of farmland unusable. Noxious gases have sickened the town’s children, and caused at least two deaths. Local clinics, operating without electricity, clean water or oxygen, can do little other than distribute breathing masks to Qayarrah’s residents; over 1,000 people reportedly have fallen ill over the past two weeks. Although military officials repeatedly promise to provide desperately-needed medical supplies, the Iraqi Army is too overstretched across northern Iraq to fulfill its commitments quickly, or to provide sufficient aid to treat the influx of sickened residents.

The country needs a coherent strategy for restoring its ravaged cities, infrastructure, and service provision to create an environment in which vital reconciliation and governance development processes can advance.

Qayarrah is only the most recent scene of devastation in territory cleared of ISIS. Most strikingly, in Ramadi, liberation in February 2016 came at a staggering cost. A United Nations assessment concluded that the city’s devastation “was worse than anywhere else in Iraq.” In December 2015, a spokesman for the Anbar Provincial Council said that over 80 percent of the provincial capital had been destroyed in the battle between Iraq’s army and ISIS. All water, electricity, medical, and sewage systems suffered moderate-to-severe damage, along with the city’s bridges, government buildings, schools, and hospitals.

Since mid-2014, over 5,700 buildings in Ramadi and its outskirts have been damaged – one out of every three structures – with 2,000 completely destroyed.  Other estimates from the Ramadi district council reported that nearly 3,000 civilian homes were lost in the fighting. When they withdrew, ISIS militants left behind a dense web of improvised explosive devices (IED) and booby traps. Aid organizations estimate that, with a completely resourced and manned mine disposal team working full time – which is unlikely given current funding and capacity levels – it will take decades to clear this ordinance. In the meantime, accidental injuries and deaths among returning civilians will likely increase.

Battle with ISIS, however, is not the only source of infrastructure damage – destruction of civilian homes and local services has become a weapon of revenge for some members of the powerful Iran-backed Popular Mobilization Units (PMU) and other tribal militias. In Tikrit, for example, Human Rights Watch reported that PMUs deliberately destroyed several hundred civilian buildings after ISIS’s withdrawal. The local tribal council in al-Alam (which is Sunni), in a public declaration, stated: “The sons of al-Alam themselves carried out the destruction of houses” of people suspected of collaboration with ISIS. In the nearby villages of al-Dur and al-Alam, satellite imagery showed large swathes of liberated neighborhoods destroyed by marauding militia groups; in al-Dur, local policeman reported that 600 homes had been torched or brought down with explosives.

Obstacles to Reconstruction

Gripped by ongoing financial crisis, the Iraqi government does not have the resources to support reconstruction. The precarious drop in global oil prices below $50 per barrel in mid-2015, down from over $100 per barrel a year earlier, seriously impacted the Iraqi economy. Profit from petroleum export constitutes 43 percent of the country’s GDP, 99 percent of its exports, 90 percent of its government revenue, and 80 percent of its foreign exchange earnings. By late 2015, oil’s market price was only half that needed for the Iraqi budget to break even.

The oil crisis exacerbated deeper flaws in the Iraqi political economy. In August 2015, Prime Minister Haidar al-Abadi enacted a series of reforms to reduce government waste and bloat. His policy aimed to address reckless civil sector growth, fueled by a general increase in oil prices over the past decade. Despite the 2008 global economic downturn, Iraq’s government has steadily expanded due to unnecessary hiring. Between 2004 and 2015, the national budget increased by 500 percent. When the country experienced twin economic shocks in 2014 – the rise of ISIS and drop in oil price – the government was forced to severely cut back new investments and scramble to keep companies like Russia’s Lukoil, Royal Dutch Shell, and Italy’s ENI from moving their operations to a more secure market.

Since mid-2015, Iraq’s non-oil sector contracted by nine percent, following an 8.8 percent fall in 2014. Petroleum export rose in the same period, to 3.5 million barrels per day, but low prices continued to damage any economic recovery. By January 2016, the country’s fiscal deficit widened to 14.5 percent – due primarily to the oil’s market value and steadily increasing humanitarian and security expenditure in the fight against ISIS.

The World Bank predicts that Iraq’s economy will grow at sustained 7.2 percent in 2016 – hovering at around five percent in 2017-2020 – mainly due to ramped-up oil production, structural reforms, and the implementation of a $5.34 billion loan from the International Monetary Fund (IMF) to ensure debt sustainability. However, the volatile nature of the ISIS insurgency, the need to protect, shelter, and feed 3.5 million displaced civilians, and factional domestic politics could hinder this fragile recovery. This year, Iraq’s budget deficit is expected to be around $20 billion.

As operations against the militants climax in northern Iraq, the government must meet a rising need for both emergency aid and longer-term reconstruction funding. It has not demonstrated an ability to overcome this daunting challenge. Following victory in Ramadi, Baghdad asked international donors to provide funding for reconstruction and mine clearing – estimated at around $10 billion. In September, the deputy governor of Anbar Province declared that the overall sum needed to reconstruct post-ISIS will be $22 billion. As the UN’s humanitarian coordinator in Iraq, Lise Grande, declared in February, “We know that the government has its back against the wall fiscally. In order to stabilize areas and to help displaced families go back, we’ve got to do more.”

And that is just one province. Mosul, a city three times as large as Ramadi, will likely suffer the same level of destruction – and reconstruction costs will rise into the tens of billions of dollars. Neither Baghdad nor Washington has a clear idea of where that money will be found. In July, US Secretary of State John Kerry convened a conference that raised $2.1 billion in pledges – 75 percent of which will go to “demining and stabilization efforts.” While a step in the right direction, such sums are far too little to restore an acceptable level of safety and services to a war-ravaged population.

As operations against the militants climax in northern Iraq, the government must meet a rising need for both emergency aid and longer-term reconstruction funding.

As long as the Iraqi government stands on fragile financial ground, sources of funding will remain limited. International companies that could directly invest in infrastructure may be wary unless they can be assured of payment, sound governance, and security. On 26 October, the Oil Ministry opened 12 fields for development and investment in central and southern provinces. This is an encouraging step, but more needs to be done to assuage investor fears. Greater US and international involvement with fighting corruption and improving governance, a stronger investment in civil society, and financial support from western countries remain viable options – although in the latter case, many western countries have shown donor fatigue.

Empowering Local Actors to Rebuild Iraq

Iraq and the international community must not only think about the “day after ISIS,” but rather consider six months, one year, and one decade beyond. Confronting the physical destruction wrought on the country and its people in recent years is a critical element of this planning process.

As the Iraqi government and international community look beyond the current crisis, they must identify partners with which to develop reconstruction plans. Large aid organizations, including the Mercy Corps, International Rescue Committee, Norwegian Refugee Council, International Committee of the Red Cross, as well as the UN, have vital roles to play. However, smaller, local non-governmental organizations can respond much faster and more flexibly than their international counterparts.

These groups are better equipped to identify local needs within distinct communities, and respond through networks of volunteers with knowledge of on-the-ground realities. In many instances, these smaller organizations are able to distribute much-needed aid in areas that larger operations consider too dangerous. For example, in September 2016 the Iraq Health Action Organization (IHAO), a small NGO that operates across the country, was able to reach displaced civilians at a checkpoint outside Qayarrah only days after the town was liberated, while the UN and other large organizations were unable to operate due to security concerns.

As Iraq looks beyond the immediate humanitarian needs of its population and rebuild damaged cities, these small organizations can take a leading role. Local populations are best equipped and motivated to rebuild their cities, and groups like IHAO can help accurately target resources to areas with greatest need. The Iraqi government should focus on providing a secure environment in which these groups can operate, a mission the international community should both encourage and support. Funding from external institutions and countries can be leveraged to bolster such local reconstruction efforts.

Faced with daunting financial challenges, Baghdad can more efficiently mobilize the resources at its disposal by liaising with civil society groups across the country – in turn empowering local populations and fostering a national dialogue. This effort is critical. In post-ISIS Iraq, Baghdad must restore confidence in its ability to represent and care for the country’s liberated populations, and assuage the anger that drove some to align with anti-government insurgency. Failure to support infrastructure development, clear IEDs, and rebuild homes in cleared areas could breed new resentment at perceived government neglect. Sluggish reconstruction will also leave some urban areas and buildings empty, creating spaces from which insurgents can hide and operate. The Iraqi government must work with actors that can provide such services quickly, efficiently, and in a way that also enfranchises local populations in shaping the country’s future.

Three years ago, a professor from Baghdad explained his country’s war-weariness, remembering how “We have been carved by suffering and gouged by resignation.” The last two years have only deepened this sentiment. Iraq deserves, and with sustained support and cooperation between various elements of society, can achieve a far more sustainable future. Confronting the economic and governmental obstacles to reconstruction, and restoring infrastructure to support 33.4 million Iraqis, is a crucial step in the process. The international community must not forget this need after ISIS is pushed from its urban strongholds, lest the professor’s memories become prophecy.

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