Thursday,19 October, 2017
Current issue | Issue 1291, (14 - 20 April 2016)
Thursday,19 October, 2017
Issue 1291, (14 - 20 April 2016)

Ahram Weekly

Can Iraqi corruption be cured?

Iraq is floundering amid conflict and corruption. Can the international community help to fix it, asks Salah Nasrawi

Al-Ahram Weekly

In Iceland, Prime Minister Sigmundur Davíð Gunnlaugsson stepped down last week, a day after thousands of protesters gathered in front of the parliament’s office in Reykjavík after newly revealed documents linked him to an offshore account.

On Tuesday, Prime Minister Arseniy Yatsenuk of Ukraine also quit after Ukrainian President Petro Poroshenko was named in the scandal.

In Britain, critics called for Prime Minister David Cameron to resign after he admitted he had had a stake in his father’s offshore fund which was unveiled in the revelations.

The documents in what has become known as the “Panama Papers,” which were leaked to the German daily Suddeutche Zeitung, disclosed a network of secret offshore deals by thousands of politicians and celebrities worldwide, including world leaders, which continues to create upheaval around the world.

The revelations implicated 12 heads of states and a number of other politicians, their family members and close associates, including friends of Russian President Vladimir Putin.

Only a few days before that a Fairfax Media and Huffington Post investigation in the US had uncovered an extraordinary case of bribery and corruption in the Iraqi oil industry, centred on Monaco-based company Unaoil.

The disclosure comes at a time when Iraq is embroiled in a government crisis triggered by the failure of its ruling oligarchies to meet demands for reform by anti-corruption protesters.

It also comes as Iraq braces itself for an international drive for the reconstruction of towns destroyed in the war against the Islamic State (IS) terror group which many fear could also be prone to corruption.    

Though the names of several Iraqi officials have surfaced in the Unaoil scandal, including one prominent Shia leader and Minister of Higher Education Hussein Shahrastani, no tangible steps have been taken except a request by Prime Minister Haider Al-Abadi for the country’s discredited integrity body to open an investigation.

Shahrastani, a Canadian-educated nuclear scientist who was oil minister and deputy prime minister for energy at the time of the scandal, denied the allegations and scorned the revelations as a “foreign conspiracy.”

Other officials mentioned in the leaks also remained defiant. The anti-corruption watch dog, however, said it could not find an address for Unaoil in Iraq to make its investigation.

Yet, the Unaoil leaks seem undeniable. After many months of digging and trips abroad, the reporters involved uncovered a treasure trove of emails and memos that involved Unaoil’s bosses, a middleman and multinational companies.

They suggest that for years top officials in Iraq’s oil industry, including the oil minister and deputy prime minister at the time, had been corrupted with impunity under the noses of the Iraqi, British, European and US authorities.

They also show a British-based Iraqi businessman had been hired to influence powerful men in Iraq on behalf of Unaoil, which had agreed to pay bribes of up to $40 million.

The revelations have caused uproar in Iraq, where activists on social media have demanded serious action.

Corruption has become deeply entrenched in the bureaucratic and political system of the country, and few Iraqis believe their political leaders are capable or willing to tackle the endemic problem.

Most of Iraq’s political elites are believed to be involved in one type of corruption or another, manipulating the country’s rich resources in order to create rents they can use to secure control of the government.

Corruption in Iraq in all its forms, bribery, embezzlement, extortion, patronage, cronyism, fraud, legal plunder, nepotism and plutocracy, has become systematic and institutionalised.

It has benefited the ruling political groups, their cronies and their allies in business and hurt ordinary Iraqis. Out of the nearly trillion dollars Iraq has made in oil sales since 2003, just a small fraction has gone to development or reached the country’s public services.

The rest has been lost to local patronage politics.

Corruption is at the root of Iraq’s problems. Together with political turmoil, it has squandered the country’s potential and was a key reason for Iraq turning into a failed state.

Since 2004, the international NGO Transparency International has put Iraq among the most corrupt countries in the world out of the nearly 200 surveyed.

As the Unaoil and Panama Papers have demonstrated, corruption in Iraq is not only a national problem, but is rather interconnected with international graft, implying that it needs to be tackled on a global basis.

The files have confirmed what many had already suspected about the international oil companies, which have been buying off Iraqi officials and rigging oil contracts.

Even before the Unaoil and the Panama Papers disclosure, many Iraqis agreed that corruption in Iraq had a global nature and had been calling for coordinated international efforts to fight it.

Iraqis, especially those in anti-corruption movements, are now acknowledging the contributions of transnational corporations to the problem.

The impacts of corruption bypass by far the crimes of tax evasion, money-trafficking and money laundering. One of its most dangerous consequences is terrorism.

While the global war on terrorism has affirmed the implications of corruption for international security, the rise of IS terrorists and their outreach worldwide has made it clear to what extent terrorists have suborned government officials.

IS militants could not have made their advances and seized nearly one third of Iraq’s territory in summer 2014 without widespread corruption within the Iraqi security forces and among top government officials.

An official report by a parliamentary committee probing the fall of Mosul to IS had determined that corruption and incompetence were largely to blame for the defeat of the security forces and the advances made by IS.

In capturing vast territories in Iraq and neighbouring Syria, IS has triggered a mass exodus of displaced people in the two countries, who later turned into one of the most significant movements of migrants and refugees in world history.

While the correlation between terrorism in Iraq and Syria and the refugees problem is now well-established, the Unaoil and Panama Papers revelations show the negative effect of graft in Iraq on the world economy and finance.

All of this makes corruption in Iraq an international issue that needs an international response.

International cooperation to fight corruption in Iraq is, therefore, indispensable. Practically speaking, fighting corruption in Iraq should become a significant component of the US-led international military coalition that is fighting terrorism.

Fighting money-trafficking and money-laundering resulting from corruption in Iraq should be part of the activities of the Counter-IS Finance Group (CIFG) that was established to coordinate efforts to combat IS financial activities.

It is probably imperative that while the United States is helping Iraqis to resolve the political crisis that it also tell Iraqi factions squabbling over forming a new government that they have to bring honest ministers into the new cabinet.

It should also make clearing their names and stopping using public office to make money a precondition for the support it gives to the Iraqi government in the war against IS.

But in order to uproot corruption in Iraq the international community should also become more serious about removing the opportunities for shady money to be transferred from Iraq.

The US, the world powers and Iraq’s neighbours have known for years that corrupt Iraqi officials have been making illegal transaction to banking and business hubs in the region and abroad.

That should not only be stopped, but efforts should also be made to return all stolen funds to Iraq, a country whose economy has been depleted by corruption and the stealing of public money.

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