Last Updated: Sun Sep 02, 2012 07:32 am (KSA) 04:32 am (GMT)

Lessons from Iraq

Joseph Sassoon

It is almost 10 years since the fall of the authoritarian regime of Saddam Hussein and his Baath Party. What can we learn from nearly a decade post an autocratic regime and what are the lessons for the countries of the Arab Revolution?

Of course, the removal of Saddam Hussein by the U.S.-led invasion is quite different from the revolutions that swept across countries such as Egypt and Tunisia. However, many of the issues Iraq is facing today were faced by many other countries after the collapse of dictatorships in their countries, be it in Eastern Europe or Latin America.

Economically, Iraq is very different from Egypt and Tunisia as it is blessed with vast oil reserves. After years of stagnation caused by the civil war that raged in the country from 2005 to 2007, and endless political gridlock, Iraq’s oil production is soaring and is expected this year to reach nearly 2.5 million barrels, exceeding Iran for the first time.

But Iraq’s dependence on oil is also its curse. More than 94 percent of the country’s revenues are from oil but the sector provides only 1 percent of employment. Agriculture, on the other hand, still employs about 20 percent of the labor force but barely contributes 4 percent to the gross domestic product.
Today, Iraq is a wealthy country, with more than US$50 billion in reserves, but, intriguingly, this has not led to a dramatic improvement in social services or infrastructure. Although Iraq witnessed some demonstrations expressing frustration and anger at the issues confronting the population, these never evolved to the same extent as other countries of the Arab Spring.

This is an outcome of the continuing traumatic violence that has enveloped the country since the US-led invasion of 2003. But Iraq, in spite of its wealth, is suffering from chronic problems similar to many other countries in the region, such as unemployment, poverty, rise of illiteracy — particularly among women — and last, but not least, corruption.

In spite of the brain drain and massive emigration that took place during and after the civil war, Iraq is still suffering from an unemployment rate of about 18 percent. As in many other countries in the region, unemployment is particularly high among young males aged between 15 and 29 (57 percent of all unemployed).

No real private sector has emerged in spite of more than nine years of neo-liberalism, and employment opportunities have become restricted to the state sector. Public sector employment has risen since 2005 and now accounts for roughly 43 percent of all workers.

Living standards continued to decline after the invasion in spite of the state’s vast reserves; 23 percent of the population is considered poor, higher than in Egypt, which lacks natural resources. In rural areas, poverty now affects more than 39 percent, and nearly the entire population receives food rations that make up about 85 percent of the minimum average calorie requirement. In 2009, a campaign called the National Strategy for Poverty Reduction was launched, but, more than two years later, there are few signs of amelioration.

The most serious challenge for Iraq and its economy today is corruption. Although violence has been reduced to a level that allows a semblance of normality, Nouri al-Maliki’s government, according to the International Crisis Group, has “allowed corruption to become entrenched and spread throughout its institutions.” The same report characterized the spread of corruption as a virus contributing to the proliferation of criminal elements and vested interests throughout the bureaucracy.

Today, corruption permeates every facet of decision making in Iraq, thus preventing the country from taking advantage of the huge oil wealth accumulated in the last few years. Corruption existed in Iraq under Saddam Hussein’s Baath Party and gained momentum during the sanctions. But at no point during the 35 years of his authoritarian regime was corruption as rampant and endemic as it is currently.

Because of the bureaucratic officialdom that has developed, corruption further aggravates the labyrinth of bureaucracy faced by citizens and makes it harder to start businesses, or to reach decisions on economic grounds rather than through favoritism.

The clear lesson for the countries of the Arab Revolution to learn from Iraq (and countries such as Russia after the collapse of the Soviet Union) is that the disappearance of authoritarian rule is no guarantee for corruption to vanish.
In both Iraq and Russia, the fear of despots evaporated, but corruption seems to have replaced Baath and Communist ideologies as the dominant political philosophy. In Iraq, one group was replaced by another and, under the pretense of encouraging entrepreneurship, corruption became entrenched.

The new regimes, whether in Egypt or Tunisia, will have to work hard to prevent major interest groups from taking root. Once this happens, these groups will begin to spread and impose, directly or indirectly, their will over the economic machine of their respective country.

Joseph Sassoon is a writer for Egypt Independent where this article was pubilshed on September 1st, 20102

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