Efforts to address corruption must begin by comprehensively mapping the dynamics of power in Iraq – identifying not only political parties’ penetration of government ministries but also their privileged access to ‘special grades’ positions in the civil service.
The special grades scheme has become a way of corruptly channelling resources to each political party in proportion to the amount of power won at each election. The resources thus distributed vary according to each party’s ability to win seats, with the number of seats often translating into civil service appointments. Since the creation of the Iraqi Governing Council in 2003, the country has held five national elections and formed six governments of national unity. However, the evolution of the political system during this time has not reduced the grip of the dominant parties. On the contrary, the influence of party political interests over the appointment of senior civil servants has increased. This in turn has driven politicization deeper into the institutions of the Iraqi state.
Iraq has experienced considerable changes since 2003, including cycles of civil war and violent conflict, the introduction of various electoral reforms and electoral systems, the splintering of political parties, the resignation of a prime minister, and popular uprisings. Despite all these events and changes, the essential system of political corruption that underlies the elite pact has remained unchallenged. If anything, as politics in Iraq has become more fragmented (due to the proliferation of political parties, elite infighting, and protests in 2019 calling for the end of the post-2003 settlement), the politicization of state institutions has continued apace. As a result, the power of the parties over the institutions of the state has become stronger.
This system has so far proven itself capable of sidestepping reform efforts. Even pressure from the 2019 demonstrations, the largest and most sustained since 2003, failed to bring about sustainable reforms. The system’s complexity – along with the non-transparent role that special grades play in it – makes it a difficult entity to map, understand and hence reform.
Iraq has experienced considerable changes since 2003, including cycles of civil war and violent conflict, the introduction of various electoral reforms and electoral systems, the splintering of political parties, the resignation of a prime minister, and popular uprisings.
Economic pressures are adding to the reform challenges. In the last year, fluctuations in global oil prices and the influence of COVID-19 are estimated to have reduced the size of Iraq’s economy by 10 per cent, driving the government into an extended balance-of-payments crisis. As of mid-2020, government revenue was running at 3 trillion dinars (at the time, roughly $2.5 billion) a month, compared with monthly expenditure of 7 trillion dinars ($5.8 billion). This economic crisis has become the dominant issue for Kadhimi’s government. In a series of interviews with Iraqi and international media, Ali Allawi, the deputy prime minister and finance minister, made it clear that Iraq was in a dire economic situation; he warned of ‘severe security consequences’ if the economy was not ‘restructured radically’. He also made it clear that one of his first targets for reform would be the state pensions and payroll. However, a first attempt at imposing fairly minor pension reforms in June 2020 was greeted with outrage in Iraqi society and in parliament, forcing a quick government retreat. This episode highlighted the government’s vulnerability to concerted political pressure from both the elite and wider society.
In the face of low oil prices in 2020 and youth-driven social unrest, both Allawi and Kadhimi argued for radical reform and opening of the economy. However, they have continued to face opposition to any such initiative from within the ruling elite, whose members have relied on the expansion of the public payroll to bolster their political support. In 2020, Allawi and his team of reformers published a white paper that mapped out his strategy for reform and sought to justify his proposal for further domestic and international borrowing to get through the crisis. However, the white paper, like a number of previous Iraqi government strategies, was more a statement of intent than a realistic strategy for achieving meaningful reform. It was based on the assertion that the economic situation was so dire that Iraq’s ruling elite had no choice but to welcome far-reaching economic reforms. The white paper’s negative reception in parliament showed how Allawi and his team were operating according to a different logic from that of the rest of the ruling elite. The latter’s political logic, which has shaped the entire political system to date, is to continue to try to extract as much money as possible from the Iraqi state, even in times of economic crisis.
In all likelihood, the ongoing clash between Allawi’s economic agenda and the elite’s political agenda will not result in reform. The Iraqi state will continue to borrow heavily, while doing little or nothing to tackle the structural problems that have dogged every post-2003 government. Allawi’s white paper set out plans for sustained cuts to government payrolls, pensions and other benefits. It also outlined an ambition to solidify and systematize Kadhimi’s attempts at tackling corruption and making the economy more attractive to foreign investment. Given the structural constraints the government faces, it is highly doubtful that the policy solutions proposed in the white paper will ever get implemented.
Concluding remarks and recommendations
In February 2019, the authors of this paper sat in the office of a senior foreign diplomat in Baghdad. After the typical diplomatic niceties, the envoy erupted into a rare and detailed monologue, born of his frustration. He had for many months worked on securing a contract in Iraq for a major company from his country. He had gone back and forth with the relevant Iraqi minister. Eventually, they had agreed on the commercial terms of the deal, and the diplomat had informed his own government of the success. Then, overnight, the agreement fell apart. He was dumbfounded. How could the Iraqi minister in question ignore the economic logic that shaped the diplomat’s understanding of the world, or jeopardize the mutual gains that the deal would deliver? The contract would supply much-needed government services, at a good price, to the Iraqi population. However, for reasons the foreign diplomat could not fathom, the Iraqi government had rejected it.
Over the course of the conversation, the authors outlined the political logic underpinning the special grades system, of which the diplomat was unaware. After explaining the system, the authors asked the diplomat if his team had mapped positions within the relevant ministry to understand how the political parties controlled the senior civil servants with whom he was negotiating? The diplomat had not done this research. His assumption was that an apparently economically logical and mutually advantageous agreement reached with the minister was sufficient to push the deal forward. In other words, he had fundamentally misread the logic of power and politics that operates at sub-ministerial level in an Iraqi government ministry.
Months later, the authors met with the diplomat again, who was obviously in a much better mood. He had just informed government colleagues in his capital that the deal with the company had finally gone through. It had progressed because he had identified the chokepoint in the system: a particular civil servant who had been acting on behalf of a political party but against his own technocratic minister and the interests of the Iraqi population.
The story of the problems encountered by this diplomat demonstrates the wider barriers to political and economic reform in Iraq. These barriers are present for the Iraqi people, foreign diplomats, international businesspeople based in Baghdad, and indeed for reformers in the government of Mustafa al-Kadhimi. Rather than seeking to understand Iraqi politics and the state in terms of hierarchical, institutional, legal and rational models, this paper has argued that efforts by international policymakers to support reform are futile without a fundamental understanding of the dynamics of power across the whole Iraqi system. To achieve this, policymakers need to map not only the positions and formal power relationships of the ministers and government leaders with whom they deal on a day-to-day basis, but also those of the senior civil servants who run the institutions of the Iraqi state. Understanding, for example, which political party a director general in a ministry is aligned to could determine the success of a particular initiative. Such understanding also offers insights when development and reform policies promoted by the international community and applied in Baghdad and Erbil fail to achieve the goals set out for them.
Having mapped the political system as indicated above, those seeking to promote reform need to ensure that accountability is established at the special grades level. The two principal institutions in Iraq charged with combating corruption are the Board of Supreme Audit and the Commission on Integrity. Although the two bodies also suffer from politicization themselves, both have roles to play in improving government transparency and accountability – for example by investigating corruption at the special grades level and identifying which appointees act with political impunity.
The process should begin with a review of all wikala and takleef appointment contracts, to see which ‘temporary’ officials are still employed and which are in positions that have not received cabinet approval. Critically, an independent investigative body should track the work of the special grades across the whole of the state to ensure that these positions fall under the rules of each ministry and that their holders operate within a civil service code. Any wholesale attempt to depoliticize the civil service would be a mammoth undertaking and in all probability politically unrealizable. The key aim in any attempt to reform the political system in Iraq, therefore, should be to bring accountability to the senior ranks of the civil service. If the appointment and actions of these officials are not subjected to extended scrutiny, then any attempt to reform the wider system will be destined to fail.