How were Iraq’s oil revenues robbed in the name of religion?

Adnan Hussein

Published: Updated:

Many people are surprised how Iraq, the second-largest oil producer after Saudi Arabia in OPEC and the fourth-largest international energy producer, cannot generate enough electricity for its own consumption. Instead, the country is currently facing a severe shortage as the national grid for electricity cannot supply power for more than eight hours a day during the hot months of the Iraqi summer.

What’s even more surprising is that the Iraqis are also suffering from a severe shortage of water for drinking and irrigation purposes, despite the fact that the country has two large rivers, the Tigris and the Euphrates, and which were the reason of the rise of three of the greatest civilizations in human history, the Sumerian, Babylonian and the Abbasid civilizations.

The ‘loot’ of government revenues

Unlike others, the Iraqis are not surprised at all as they can see with their eyes how billions of dollars from monthly oil revenues, millions of dollars in taxes and customs fees and others sources of government revenue have vanished from the state treasury.

The misfortune of Iraq which has been aggravating for over a decade and a half is not limited to electricity and water shortages. The public services system (healthcare, education, housing, transportation, sanitation, etc.) is almost completely collapsed while the poverty rate is over 30% and unemployment is at 20%. All of this has pushed the Iraqis to hold angry protests like what’s currently happening.

During the popular protests, the slogan of "combating administrative and financial corruption" has been the foremost among all public demands which have now raised the ceiling to calling for radical political and administrative change to ensure that the state and its federal and local apparatuses are led by competent and impartial figures who know how to invest in Iraq's great financial resources for the development and welfare of the community and that do not loot public funds.

The current damage is due to looting public funds quite smoothly without any fear of being punished. Those looting this money are leaders and cadres in ruling parties (mostly Islamic) who are protected and whose leaders are aware of their corruption.

Diverting public funds to parties

In a number of hearings held to question ministers and other senior executives at the Parliament, which term ended around five weeks ago, the existence of a number of "economic committees" came into public eye. These bodies were responsible for the loot of public money and were formed by influential parties in the state to work with ministers, heads of institutions, general managers of state departments, governors and provincial councils. It is well known that these executive posts are divided among these parties according to the quota system, which offers each party a number of positions in line with the size of its representation in the federal Parliament, the Kurdistan Regional Parliament and the provincial councils.

People holding these positions have a duty towards their parties and which is to provide money these “economic committees” and which is taken in the form of bribes (commissions) paid by companies and contractors who were given public project contracts. Usually, these large commissions (worth millions of dollars) are often transferred to personal accounts or to fictitious companies outside of Iraq.

Most of these officials receive bribes and have become millionaires who possess plenty of property within a few years. Heinous and shocking details have been revealed in this context through periodic reports of the Integrity Commission and the parliamentary Integrity and Finance Committees. Political parties have provided protection to these corrupt people and safeguarded them from punishment and accountability. As a result, hundreds of important development projects have been adversely affected. The people who give and receive bribes, often divide the financial allocations for these projects, leaving mere pennies for the execution of the projects.

The money acquired by this method is used by the parties to reinforce their influence in the state by gaining more members, supporters and by winning votes in parliamentary and local elections. This has in fact been a major looting operation that’s popularly known as “Farhud”. It has now been established that there are hundreds of billions of dollars looted from state revenues that are still missing. Before his death in late 2015, head of the former parliamentary finance committee MP Ahmad Jalabi announced that funds unaccounted for are over $300 billion, whereas other sources estimated the funds at $500 billion.

According to other data, some of these funds have been transferred to Iran which was in desperate need of foreign money after economic sanctions were imposed by the United States and other countries.

A dismal situation

Last month, the Central Bank of Iraq (CBE) announced in a report that the total revenue in foreign currency over the years 2005- 2017 reached $706.23 billion. A few days later, a member of the Finance Committee in the former parliament Magda Tamimi said that the revenues of Iraq since 2004 until mid-2018 amounted to 1,032 trillion and 207 billion dinars ($900 billion). These two astronomical figures did not positively impact the Iraqis. Critics of the current and former governments always criticize them by arguing that they did not build any factories and dams or developed agricultural projects, let alone a major freeway or a new international airport (apart from the Najaf airport which is controlled by five Islamic parties that dominate the provincial council of Najaf and which the Baghdad government has not been able to control until after protestors stormed it last month demanding to change its corrupt partisan administration, and this is what happened).

One of the greatest ironies is that all major economic projects and plans related to services are the work of previous regimes. As a matter of fact the post 2003-governments have not even been able to repair these projects.

This is the tip of the iceberg of the shocking conditions facing Iraq and angering the people against the powerful political class and the entire political process. The public outrage also extends to the Unites States and Britain which led the process of arranging this political process and handed it over to Islamist groups which protestors are speaking out against and chanting: “In the name of religion, the looters have robbed us.”

This article is also available in Arabic.

Adnan Hussein is the executive editor-in-chief of Al-Mada newspaper and head of the National Union of Iraqi journalists. Previously, he has held the position of Managing Editor in Asharq al-Awsat newspaper. He tweets under the handle @adnanhussein

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