Can Iraq’s new government reform the corrupt system?

Prime Minister Mohammed Shia’ al-Sudani must address politically sanctioned corruption head-on, or he risks falling into the same trap as his predecessors.

Expert comment Published 30 November 2022 3 minute READ

Dr Renad Mansour

Senior Research Fellow, Middle East and North Africa Programme; Project Director, Iraq Initiative

Hayder Al-Shakeri

Research Fellow, Middle East and North Africa Programme

After nearly a year of political gridlock and violence, Iraq has a new government and a new prime minister, Mohammed Shia’ al-Sudani. Sudani has made several reform pledges, including creating tens of thousands of new jobs and tackling rampant corruption. His predecessors all made similar promises, but ultimately failed to deliver. Can Sudani chart a different path, or will he repeat their mistakes?

He takes office at a time when many Iraqis feel disenfranchised. In the almost 20 years since regime change, Iraq’s elite have steadily lost economic and ideological power. The country’s economic decline and a growing youth population have put a strain on the system. It is increasingly hard for new leaders to claim to be genuine reformists when, over the past two decades, the political elite have presided over immense wealth (with annual budgets of around $100 billion) but have failed to deliver basic services, such as electricity and water.  

Weeks into his term, Sudani was faced with a major corruption scandal, which Iraqis have called ‘the heist of the century’. According to reports, officials in the former government of Mustafa al-Kadhimi stole $2.5 billion from Iraq’s state-owned al-Rafidaen bank. Sudani subsequently appeared on television surrounded by $100 million in cash to announce he was in the process of returning the money.

While returning stolen state funds may be a quick win, the problem has deeper roots. Many of the parties involved in the fraud are still in positions of power, and also back Sudani’s government. While the prime minister’s anti-corruption drive may target some low-hanging fruit, the state’s real power brokers will retain impunity. Unless politically sanctioned corruption is addressed head-on, Sudani risks falling into the same trap as his predecessors who promised reform but instead fuelled corruption.

So, what is Sudani promising – and can he deliver?

Creating public sector jobs

In the past, Iraq’s vast oil wealth has made it possible for its leaders to gain support through public sector job creation. The most successful at this was former prime minister Nouri al-Maliki, who created more than 600,000 jobs. Sudani wants to follow in his footsteps by announcing the creation of tens of thousands of new jobs.

However, Maliki did this at a time when oil prices were high and both the working age population and the public sector were smaller. Today, more than 60 per cent of Iraq’s population are under the age of 25 and around 700,000 people enter the job market annually, compared to 450,000 in 2009. A more realistic comparison for Sudani might be former prime minister Adel Abdul Mahdi, who in 2019 tried to create 200,000 jobs in a demographic context similar to today’s Iraq. However, his plans were scuppered by budgetary constraints that prevented salary payments.

While Sudani’s anti-corruption drive may target some low-hanging fruit, the state’s real power brokers will retain impunity.

Although oil prices are currently high, Iraq’s public sector is also much larger today. The minister for industry and minerals recently stated the ministry has to borrow money to pay 40,000 unnecessary and unproductive staff on its payroll, a legacy of government policies that have increased public sector jobs ninefold since 2005 and led to an employee productivity rate of 17 minutes per day.

Offering jobs may appear a quick fix to a new government’s legitimacy crisis, but such tactics have consistently failed to address Iraq’s underlying structural problems or improve living standards. Most Iraqis continue to suffer from a lack of basic services, despite the country’s immense oil wealth.

Fighting corruption

In an effort to regain legitimacy and public trust, Sudani has also promised to fight corruption, particularly in service delivery. He has established The Supreme Commission for Combatting Corruption, tasked with pursuing major corruption cases with the support of the Ministry of Interior.

But Sudani is not the first Iraqi prime minister to attempt this. Maliki created the Joint Coordinating Council for Anti-Corruption, Abadi established the Supreme Council for Combatting Corruption – later restructured by his successor Abdul Mahdi – and Kadhimi established the Supreme Anti-Corruption Committee, which was later suspended by Iraq’s supreme court for violation of the constitution.
 

These initiatives did little to fight corruption. Instead, they were used to target political opponents, and some are even accused of human rights violations.

Ultimately, these prime ministers all failed because they were backed by the ruling elites responsible for the corruption they purportedly wanted to stamp out. In this respect, Sudani is no different.

Avoiding past failures

To pursue reform, Sudani will need to build a coalition of reformists from within the state and wider society.

Despite Sudani’s resignation from the Da’wa party, which he accused of corruption, his government still depends on the support of Da’wa and other ruling parties of the post-2003 system. The compromise he has struck to gain office limits his ability to pursue reform and forces him to repeat the same policies as his predecessors – all of whom were beholden to the same ruling parties.

To pursue genuine reform, Sudani will need a new constituency that is removed from his political backers. He will need to build a coalition of reformists from within the state and wider society, who are currently isolated and unable to enact change on their own. Together they could be a force for change that Sudani can use as leverage against his political backers. This is a tall order, but if Sudani does not rise to the challenge, he is unlikely to deliver the reform Iraq so desperately needs.
 

This article is part of a series from Chatham House that provides in-depth insights into the inner-workings of Iraq’s government and evaluate what recent developments – both public and behind the scenes – reveal about prospects for a more a stable, accountable, and prosperous Iraqi state.

This series is part of the workstream on the political economy of reform, under the Middle East and North Africa programme’s Iraq Initiative led by project director Dr Renad Mansour.