August is still a week away but July has already become the bloodiest month in Iraq so far this year. Yesterday brought at least14 more deaths to add to the toll, including nine officers killed when insurgents attacked a police station near Mosul.

Meanwhile, the mass breakout from Abu Ghraib and Taji prisons – for which al-Qaeda in Iraq has claimed responsibility – has raised fears that hundreds of previously captive fighters will become active again.

Amid political turmoil in Egypt and seemingly endless slaughter in Syria, the deteriorating situation in Iraq is largely ignored by the rest of the world. 

Only a handful of journalists from the international media remain based in Baghdad and the security situation restricts their ability to travel around the country. Media coverage, such as it is, relates mainly to the growing violence but, because of events in neighbouring Syria, even this month’s death toll of well over 600 in Iraq has caused less alarm than it should.

Although this is still well below the peaks reached by the insurgency in 2006-2007, there was a period around 2009 when Iraq’s future looked relatively hopeful. Not any more. “All the trajectories are moving in the opposite direction,” Prashant Rao, AFP’s Baghdad bureau chief, said yesterday during a visit to London.

The problem is not only what’s happening but also what isn’thappening. The parliamentary election of 2010 left both of the leading contenders well short of an overall majority. Prime minister Nuri al-Maliki’s State of Law coalition found itself in second place with 89 seats – slightly behind Iyad Allawi’s Iraqiyya coalition which won 91 seats. Maliki’s group also had a slightly smaller share of the popular vote.

Post-election wrangling continued for months. Toby Dodge, an Iraq expert at the London School of Economics, writes:

“When the new government finally coalesced, it constituted a political triumph for al-Maliki. In spite of coming second in the elections he retained the premiership, skilfully escaped all attempts to constrain his power and inserted a number of loyalists to important cabinet positions. 

“He consistently outmanoeuvred Allawi and Iraqiyya, who failed to secure the prime ministership, the presidency or any of the top positions in the three security ministries – interior, defence or national security – which Maliki either runs himself or has given to loyalists.”

Thus Maliki not only clung on to power but consolidated it. Iraq has paid a price for this in the shape of legislative paralysis. There has been “no real legislation” since the 2010 election, Rao said, and everything is now on hold until the 2014 election. Whether that will resolve matters remains to be seen.

In the meantime corruption flourishes and Iraq has been without a fully-fledged defence minister or interior minister since 2010 (Maliki himself has taken on the interior minister role).

Maliki, who mastered the art of self-preservation – and self-promotion – during his years as an opponent of Saddam Hussein is sometimes accused of adopting Saddam’s ways (a recent profile of the prime minister by Ned Parker and Raheem Salman gives some useful insights into his character) but, even now, he does not have overall control. There are too many competing centres of power, Rao said.

The security situation has brought new restrictions on people’s freedom of movement, even in Baghdad. This is a source of irritation for many but some also argue that the resulting sectarian segregation is fuelling religious tensions rather than alleviating them.

Writing for the Niqash website, Mustafa Habib says:

“Today locals [in Baghdad] are not always able to move freely from one area to another. To enter neighbourhoods that are not necessarily their own, they have to show a special card verifying their place of residency, be accompanied by someone from that neighbourhood with such a card or take an oath at a security checkpoint promising that this is indeed where they live and that they are not a terrorist ...

“Many people in Baghdad believe the new security measures are only adding to the conflict, causing further divisions between various sections of the city and fuelling feelings of sectarian conflict.”

One of the few bright spots is oil, which brings in money but, unfortunately, does little to ease unemployment. Only about 1% of Iraqis work in the oil industry, Rao said. 

Unemployment levels are currently between 17% and 30%, depending on whose figures you believe.

A key factor hampering development in the private sector is 
the state of Iraq’s banking system:

Diplomats and analysts have pointed to a number of key difficulties, including a lack of modern regulations to give Iraqis confidence in finance.

The fact also remains that the two state-owned banks, Al-Rashid Bank and Al-Rafidain Bank, dwarf the competition and have little incentive to innovate.

The tiny minority of Iraqis who do have bank accounts have limited access to ATM machines, online banking, or even an ability to access their account from different branches of the same bank.

And while some credit cards are issued, virtually no shops accept them.

"The conditions are not here for you to engage in retail banking," the Western diplomat said.

Local businesses meanwhile often complain that banks are unwilling to lend or demand unreasonably high levels of collateral.

Yesterday, Rao gave the example of one businessman seeking a $200,000 loan who was asked to provide $500,000 collateral. The businessman replied that if he had $500,000 collateral he wouldn’t have been asking for a $200,000 loan in the first place.
In the absence of much job creation in the private sector the unemployed naturally aspire to government jobs – and in the time-honoured Arab tradition the route to a government job is through corruption or political connections.

The picture is somewhat brighter in the semi-autonomous Kurdish region – it’s safer and the economy is doing better – even if there are doubts about where democracy is heading. The extension of Barzani’s presidency by a further two years is one worrying sign.

In the light of all these problems I asked Rao if Iraqis believe they were liberated by the overthrow of Saddam. Yes, he said, many of them genuinely do. Devout Shia, for example, point out that they can now legally take part in the annual Ashura commemoration, which is something they value.

Others, though, make cynical jokes about their predicament: “We had one dictator before but now we have 100” or “Under Saddam I couldn’t speak. Now I can speak but nobody listens.”

  
Posted by Brian Whitaker
Thursday, 25 July 2013