What we’ve lost in Iraq Zaid Salah 22 - 3 - 2006 The effect of three years of war and occupation can be measured in the dire condition of Iraq’s economy and its people’s daily lives, says Zaid Salah. ------------------------------------------
This week, the third anniversary of the United States-led invasion of Iraq, senior American officials have been trying their best to paint the terrible situation that they have created in a positive light. Hence their focus on political developments in the country, which are open to conflicting interpretation, rather than on established facts that are beyond dispute. On Sunday 19 March, Donald Rumsfeld wrote in the Washington Post that "in three years Iraq has gone from enduring a brutal dictatorship to electing a provisional government to ratifying a new constitution written by Iraqis to electing a permanent government last December".
Although one can argue about whether the substance of what Rumsfeld says here is true, more objective facts, such as oil and energy production rates, unemployment and poverty are less convenient and tend to feature far less prominently in his rhetoric. Coincidentally, a series of economic data has been published on Iraq during the past ten days that does not fit well with the picture that is being painted in the US.
Zaid Salah is an attorney at the New York Bar and specialises in international commercial arbitration. He has graduated from King's College London, the Sorbonne University in Paris and Harvard Law School. He is also the editor of www.iraqieconomy.org
Also by Zaid Salah in openDemocracy:
"The day Iraqis have waited for" (December 2005)
Indeed, it was revealed on 9 March 2006 that oil production in Iraq is in fact at the lowest rate since the war. In August 2004, oil exports stood at 1.9 million barrels per day (mbd). Less than a year later, in July 2005, they had fallen to 1.42 mbd. We have now learned that in December 2005 exports fell to 1.1 mbd, their lowest rate since the war. This stands in complete contrast to the declarations made by US and Iraqi officials on the state of Iraq's oil industry. From Paul Wolfowitz, who famously declared that Iraq would be able to finance its own reconstruction, to Iraqi officials who declared in December 2004 that oil production would reach 3.5 mbd within less than twelve months: all have been involved in a huge operation of deceit.
The oil industry is crumbling, and the more it crumbles, the more we can write off any hopes for the rest of the country. This development impacts on Iraq in three ways. First, it translates into less monies available for the government's general budget (by way of example, the ministry of justice's budget for 2006 was reduced by two-thirds in comparison to 2005); second, oil shortages can be felt at petrol stations throughout the country, where average Iraqis often have to queue for days at a time in order to fill up their gas tanks.
Third, it affects electricity production, which incredibly also declined to its lowest point since the start of the war in March 2003, with the overstressed power network producing less than half the electricity needed to meet Iraqi demand. Most of Iraq's power installations run on oil, so the fuel shortages have a direct impact on electricity production throughout the country. In addition, the fact that Iraq is exporting less will necessarily mean that reconstruction of the electricity sector, and even maintenance of the inadequate supply that is currently available, will suffer as a result.
American officials have already begun winding down the funding of reconstruction, which means that Iraq will soon have to fend for itself despite all the promises of prosperity that were made. So despite the decrepit state of Iraq's electricity infrastructure, emphasis has been placed on temporary solutions such as importing energy from neighbouring countries such as Iran. It goes without saying that a country such as Iraq should not need to import energy, and should in fact be exporting.
Three further pieces of bad news released in the past few days – about unemployment, trade, and poverty – complete the picture of an economy in deep crisis. A senior Iraqi official estimates that the unemployment rate in Iraq could be as high as 50%. Abdel Basit Karim Mawloud, Iraq's trade minister, further indicated on 19 January that the government's current budget is $1bn short of what is required to pay for food imports that are to be distributed to Iraqis in the form of food rations.
Moreover, things are about to get much worse for the poor of Iraq. In implementation of the IMF's economic reform programme that has been imposed on the country, Iraq is due to increase state-controlled domestic fuel prices in 2006 by 1000%. A threefold increase in December 2005 sparked protests throughout Iraq, even in Najaf, which is the heartland of Iraq's largest political coalition. Rioters were fired upon and a number died from their wounds.
Donald Rumsfeld is not mistaken: Iraq did hold elections in 2005, and has a new constitution. Pundits have been arguing about the relative merits and shortcomings of said elections and of the constitutional process, but there is no debate about the economic situation in the country: poverty is increasing, and the provision of basic services continues to disintegrate.
In light of all of the above, one question must be addressed: where are the street protests, why have the people not taken matters into their own hands in order to improve their status and to ensure that their basic needs will be satisfied? Iraq is no stranger to protest, and Iraqis have risen up in violent protest on many occasions in the past in reaction to situations that are comparatively much less dramatic than what they are living through today. So why the relative silence?
The answer is clearly that security in the country has deteriorated to such an extent that Iraqis are too concerned about preserving their own lives to worry about issues such as electricity and employment. And to whom do you protest when all sides are fighting, when no one is in control of the situation, and when all would not hesitate to silence dissent through violence and repression? These are the things that we have lost in Iraq since 2003, which is well worth remembering in this anniversary week of the start of a war that should never have been.
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