Corruption in Iraq

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Corruption is pervasive at all levels of government in Iraq. In 2021, President Barham Salih stated that US$150 billion of oil money had been stolen and smuggled out of Iraq in corrupt deals since the 2003 U.S. invasion. [1] Endemic corruption pervades Iraq's oil and gas sectors, which still accounts for more than 99 percent of the country’s exports and 85 percent of the government’s budget. [2] The Iraqi economy is predominantly a cash economy, making it almost impossible to trace the amount or the path the money follows. [3]

Contents

Transparency International's Corruption Perceptions Index scores 180 countries on a scale from 0 ("highly corrupt") to 100 ("very clean") and then ranks the countries by their score; the country ranked first is perceived to have the most honest public sector. [4] From 2013 to 2023, the Corruption Perceptions Index indicated that the Iraqi public sector was seriously corrupt but improving: Iraq's score remained constant or rose every year, rising from 16 to 23 over the eleven years. Its 2023 score of 23 ranked it 154th of 180 countries. For comparison with worldwide scores, the best 2023 score was 90 (ranked 1), the average score was 43, and the worst score was 11 (ranked 180). [5] For comparison with regional scores, the average score among Middle Eastern and North African countries [Note 1] was 34. The highest score among Middle Eastern and North African countries was 68 and the lowest score was 13. [6]

Dynamics

Political parties and public servants are considered corrupt, and petty corruption is highly institutionalized in Iraqi society. [7]

Corruption is considered an obstacle for doing business in Iraq, and red tape and inefficiency continue to persist. Government contracting is an area reported to be affected by high-levels of illicit activity, and public contracts are often awarded to companies connected to political leaders. Investors may come under pressure to take on well-connected local partners to avoid bureaucratic hurdles. [8]

Corruption in Iraq is endemic, systemic, and the main threat to Iraq's stability after the defeat of ISIS. [9]

In an Al Jazeera investigation, residents of Harthiya, a neighborhood in Baghdad alleged severe corruption in the construction sector. The neighborhood has experienced a construction boom since the 2003 invasion. Despite the many construction infractions, only a fraction of the revenue from government fines reaches the state treasury. Iraqi civil servants go around the neighborhood to inspect construction sites. When they spot wrongdoings, such as an extra floor in a building, an agreement is struck with the developer. The public official takes a bribe and in return, the state employee reduces the fine. The contractor pays the ticket and continues the project. Even if the builder pays in full, the fines are too small to deter construction companies when compared to the lucrative construction sector. [10]

In the summer of 2022, an Iraqi anti-corruption commission uncovered a massive corruption scandal where US$700 million had been stolen from Iraqi state banks. The fraud resulted in a state of chaos and instability in government banking systems. [11] [12]

In October 2022, Iraq’s acting finance minister Ihsan Jabbar shocked the nation by announcing an investigation into US$2.5 billion that had gone missing from Iraq’s General Commission for Taxes, a department in the Ministry of Finance. It was described as "the heist of the century". [13]

In March 2023, Iraq's former Prime Minister, Mustafa Al-Kadhimi claimed in an interview that corruption cost the country US$600 billion between 2003 and mid-2020. [14] [15]

Protests and political impacts

In 2015, mass protests against corruption were observed in the capital Baghdad and in main large cities. [16] Protesters were denouncing the low quality of public services as well as the regular power cuts the population suffers. [17] They called for the authorities to take action, denouncing them as "corrupt" and "thiefs". [18] The higher Shiite leader at the time, Grand Ayatollah Ali al-Sistani, even called for the Prime Minister Haider al-Abadi to take a strong stance against corruption. [17] These protests became occasional and were organized from time to time from 2015 until 2018.

Iraqi dissatisfaction with corruption boiled over with large protests in 2018, and again in 2019 as part of ongoing protests, of which corruption in Iraq is one of the main causes, among several. [19]

Corruption in Iraq and subsequent ongoing protests of 2018 and 2019 resulted in then resignation of Prime Minister Adil Abdul Mahdi on November 30, 2019. [20] He was replaced by Mustafa Al-Kadhimi in May 2020.

A 2013 survey by Transparency International indicated that a majority of Iraqis were dissatisfied with the government's efforts in fighting corruption. [7] In 2019, over 80% of Iraqis were concerned about worsening corruption at the highest levels of government. [9]

Anti-corruption governmental entities

In August 2020, the Iraqi Prime Minister, Mustafa Al-Kadhimi, announced the formation of a supreme investigation committee called Committee 29 or "Abu Ragheef Committee" (Court order No. 29) to deal with major corruption and criminal offenses. [21] The special commission was placed under the authority of the Office of the Commander-in-Chief of the Armed Forces, and headed by Lieutenant General Ahmed Taha Abu Ragheef.

The Commission of Integrity is an independent entity in charge of investigating cases of corruption committed at every levels of the State. It was created in 2004 by the Iraqi Governing Council. The Commission had several changes following the replacement of its director in November 2022: Judge Alaa Jawad Al-Saadi resigned as he considered he could not properly pursue his mission at the head of the entity after the commission was subject to campaigns of "distortion" and "defamation". [22] The Iraqi Prime Minister accepted the resignation and nominated Judge Haider Hanoun Zayer to head the commission.

In November 2022, the new Iraqi Prime Minister Al-Sudani, who expressed his will to make the fight against corruption one of his top priority, announced the creation of a Supreme Anti-Corruption Commission [23] to accelerate the investigation of major corruption files and the recovery of those wanted. [24]

Recent scandals

In October 2022, the Federal Commission of Integrity announced it started an investigation on a theft of 3.7 trillion Iraqi dinars ($2.5 billion). Those funds were allegedly stolen from the Tax Authority account. [25] According to several publications based on the declaration of the Iraqi Finance Ministry, the money was reportedly transferred from the account of a governmental agency held by the Rafidain Bank to 5 companies in 2021 and 2022. [26]

Later in November 2022, the Prime Minister Al-Sudani announced that Iraq recovered a part of the money stolen. [27] According to him, one of the businessmen involved in the scandal Nour Zouhair Jassem, who admitted received a part of the funds, gave back around US$125 million.

Notes

  1. ↑ Algeria, Bahrain, Comoros, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates, and Yemen

See also

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References

  1. ↑ Tawfeeq, Mohammed (23 May 2021). "Iraq estimates that $150 billion of its oil money has been stolen from the country since the US-led invasion of 2003". CNN. Archived from the original on 2021-05-23. Retrieved 2021-05-23.
  2. ↑ Watkins, Simon (11 April 2023). "TotalEnergies Pushes Ahead With Iraq Megadeal Despite Huge Risks". Oilprice.com.
  3. ↑ "Iran's Trail Of Political And Economic Chaos: Part I – The Iraqi Experience". MEMRI. September 1, 2020.
  4. ↑ "The ABCs of the CPI: How the Corruption Perceptions Index is calculated". Transparency.org. 20 December 2021. Retrieved 25 March 2024.
  5. ↑ "Corruption Perceptions Index 2023: Iraq". Transparency.org. 30 January 2024. Retrieved 25 March 2024.
  6. ↑ "CPI 2023 for Middle East & North Africa: Dysfunctional approach to fighting corruption undermines progress". Transparency.org. 30 January 2024. Retrieved 25 March 2024.
  7. 1 2 "Global Corruption Barometer 2013". Transparency International. Retrieved 25 February 2014.
  8. ↑ "Iraq Country Profile". Business Anti-Corruption Portal. Archived from the original on 14 July 2015. Retrieved 14 July 2015.
  9. 1 2 "Corruption Continues to Destabilize Iraq". Chatham House. 1 October 2019. Archived from the original on 2020-03-28. Retrieved 2019-11-04.
  10. ↑ "Iraq: The changing face of Baghdad's historic neighbourhoods". Al Jazeera. September 9, 2020.
  11. ↑ "Iraqi Banks Misappropriated $700 Million in Public Funds". OCCRP. 10 June 2022.
  12. ↑ "Nearly $700 million stolen from Iraq state banks: Anti-corruption commission". Al-Arabiya. 9 June 2022.
  13. ↑ Foltyn, Simona (20 November 2022). "'Heist of the century': how $2.5bn was plundered from Iraqi state funds". The Guardian.
  14. ↑ "Former Iraq PM Al-Kadhimi says corruption cost country $600 billion". The New Arab. 13 March 2023.
  15. ↑ "مصطفى الكاظمي: الفساد في العراق التهم 600 مليار دولار". emaratalyoum.com. 14 March 2023.
  16. ↑ "Irak : des milliers de manifestants contre la corruption". L'Orient-Le Jour. 2015-08-07. Retrieved 2023-02-23.
  17. 1 2 "Thousands of Iraqis protest against corruption and power cuts". The Guardian. Agence France-Presse. 2015-08-07. ISSN   0261-3077 . Retrieved 2023-02-23.
  18. ↑ "Manifestation contre la corruption en Irak". Le Devoir (in French). Agence France-Presse. 2015-08-08. Retrieved 2023-02-23.
  19. ↑ "Protesters block roads to Iraqi port, demand end to foreign meddling". Reuters. 2019-11-03. Retrieved 2019-11-04.
  20. ↑ Rubin, Alissa J.; Hassan, Falih (2019-11-30). "Iraqi Prime Minister Resigns in Deepening Political Crisis". The New York Times. ISSN   0362-4331 . Retrieved 2019-12-21.
  21. ↑ "المحكمة الاتحادية تلغي لجنة أبو رغيف المختصة بقضايا الفساد". Rudaw Media Network (in Arabic). 2022-02-03. Retrieved 2023-04-16.
  22. ↑ "Head of Iraq's Integrity Commission Resigns | Iraq Business News". 2022-11-15. Retrieved 2023-02-15.
  23. ↑ "Iraqi PM tries to assure skeptics of anti-corruption initiative - Al-Monitor: Independent, trusted coverage of the Middle East". www.al-monitor.com. Retrieved 2023-02-15.
  24. ↑ "السوداني يوجه بتشكيل الهيئة العليا لمكافحة الفساد - شفق نيوز". السوداني يوجه بتشكيل الهيئة العليا لمكافحة الفساد - شفق نيوز. Retrieved 2023-02-28.
  25. ↑ "$2.5bn Tax Fraud Uncovered in Iraq | Iraq Business News". 2022-10-17. Retrieved 2023-02-15.
  26. ↑ Naar, Ismaeel; Mahmoud, Sinan (2022-10-16). "Iraq PM-elect Al Sudani vows to curb corruption after $2.5bn embezzlement case". The National. Retrieved 2023-02-15.
  27. ↑ "L'Irak annonce avoir récupéré une fraction des 2,5 milliards de dollars volés au fisc, après un scandale de corruption". Franceinfo (in French). 2022-11-27. Retrieved 2023-02-23.
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