MILNET Brief
 Update:  State of Affairs in Iraq, July, 2004

"The law ... is really designed to protect lives in Iraq, whether these lives are Iraqis or friends of Iraq who are operating here in Iraq..."

- Prime Minister of the Iraqi Interim Government, Iyad Allwai, July 7, 2004.

As part of a regular update on the region, MILNET presents a brief summary of the "State of Affairs" in Iraq.  Why is it necessary with all the media coverage?  Simply put, MILNET feels it is necessary because the mainstream media is supplying so much conflicting data and the focus appears to be on the day-to-day street violence where the terrorists are continuing to try to derail the emerging government from succeeding at producing another free nation in the Middle East.  This report will include a summary of the terrorist activities, but also look at the rest of the country where slow and steady progress promises a vibrant new economy for the people of Iraq.  However, we will not attempt to imply the situation is all rosy in Iraq. The violence is critical and its effects are clearly what the insurgents want -- slow the pace or totally destroy any recovery, and hinder the ability or totally prevent the creation of a new and better nation that does not cater to extremism and despots is under great stress.  Unlike many media outlets, MILNET does congratulate the nations of Iraq and indeed the U.S. led Coalition on the slow , if not entirely steady, progress.

The analysis will include the following five sections:
  1. Government
  2. Terrorist Activity
  3. Recovery/Rebuilding
  4. Changes to Daily Life
  5. National Economy
  6. Needs for Progress
  7. Conclusion







Government

The government of Iraq today is officially the Interim Government of Nation of Iraq.  It consists of a five member leadership and the interim constitution drafted by the Iraqi Governing Council that provided guidance to the U.S. Led Coalition while the Coalition Authority maintained control of Iraq following the ouster of the Baathist party and Saddam Hussein.  The five leaders represent the Presidential Council.  The Council is made up of a president, who is a Sunni Arab, and two vice presidents — a Kurd and a Shiite. Shiites, Sunnis and Kurds are the three main groups in Iraq.

Some of the members of the government are:
The 30+ officials seem to be a fair mix of Sunni, Shia, and Kurdish officials, with perhaps only the Kurds being slightly under represented.  The majority are highly educated with advance degrees and a significant portion are former exiles living in the United Kingdom, Saudi Arabai, Jordan, or the U.S. prior to the drafting of the Iraqi Governing Council.  Note most of the holders of posts in the new government have been transferred from the Iraqi Governing Council.

There are two significant actions from the government of interest.  The first is a security measure giving Allawi immense power to surveil, arrest or seize assets  -- a declaration of Martial Law, which the Presidential Council must approve before he is granted the powers (In progress).  The second is a proposed amnesty for certain members of violent Iraqi insurgents which has been delayed, presumably, pending some last minute language being negotiated behind the scenes.  The second measure is intended to end the majority of violence in Iraq so that the government can go about the business of preparing for elections in October of 2004.

The elections are a crucial step and there is a great deal of angst amongst all concerned.  For the U.S. led coalition, there is concern that perhaps the elections will bring a radical Muslim influence into power and thus stifle the desired democratic nation they so hope for.  On the other hand, many Muslim leaders in the Middle East are grumbling that the current government is a simply a puppet of the infidels and must be overthrown.  All this increases the tension and when the election draws near, look for it to be a contentious event.







Terrorist Activity

An unceasing measure of violence jumped in April when Shia activist Sadr announced his followers would lead a force to push the U.S. "occupiers" out of Iraq.  The Coalition response was fierce and several large and bloody battles have occurred.  Violence in the streets have continued to occur in the major cities almost on a daily basis.  However, the Sadr led insurgents are mostly in the south, while former Baathists and a large share of foreign sourced terrorists battle in pockets which have not yet stabilized from the war -- mostly in the North.  Baghdad, naturally, is the scene of strings of bombings as insurgents try to assassinate and influence the new government.

The major terrorist groups thought to be driving the violence are:








Recovery/Rebuilding

According to former leader of the U.S. Coalition, former Ambassador Paul Bremer, much improvement has occurred in Iraq.  He stated
in an interview that more than $5.0 billion dollars has been allocated to projects to improve the infrastructure of the country.  The U.S. GAO says much of that goes un-spent, however Bremer blames some of this on projects begun, money promised, but exchange of monies not occurring until milestones are accomplished or sub-projects completed.

A large number of the projects are smaller projects that are aimed at qualify of life at the local levels throughout smaller areas of Iraq, areas not torn by war and violence.  Examples are schools, hospitals, modest quarters for new local governments, repair of wells, agricultural stabilization such as repair of fences, corrals, etc.

Aid in form of food and water is also a primary focus and Bremer states the aid is confirmed to be reaching those in need. 

The oil industry is in deep trouble. Constant attacks by terrorists have ensured the pipelines are damaged and oil does not flow regularly or in any large volume long enough. However, over time, the revenue has grown slow but consistently.  It is estimated that the country is at less than 30% of its total capacity (if that much), and if Allwai can manage to end the violence, it is expected there will be a huge jump in revenue from oil.

However, attacks continue to focus on oil employees, with major effects on the indigenous knowledge workers that, if not curtailed will require outside employees to be brought in to run the business.  The terrorists kill the locals, the local oil companies will have to bring in foreigners, and the terrorists will undoubtedly claim foreign "raping" of Iraqi oil. 

It is pretty clear the terrorists are winning in this regard, they are severely impacting oil revenues.






Changes to Daily Life


Larger infrastructure such as electricity and fuel in the modern cities is still not at 100%, and some people still have to travel outward from the city centers to find every food or grocery item they need.  The rural settings are still relying, to a significant degree on aid supplied food, but wells and pumped water is increasingly available. Like might be expected, there are interruptions in all supplies and the people must cope with these interruptions, sometimes for up to several hours. 

Unemployment in the rural areas or the cities is dismal.  While there are funds to create jobs available, the violence continues to interrupt the ability to mount the projects that would create the employment. 

MILNET's sources indicate that once again, the Terrorists and insurgents are winning in that regard, they are applying extreme stress on the ability to create jobs.  Again, if Allawi can end the major pockets of violence, the projects will start or resume, and the employment situation should improve.

MILNET's analysis is that the insurgents wish to continue to disrupt the employment situation, making the Iraqi people in the population centers especially, angry and desperate, perhaps enough to lash out at the government.  Also, attacks on terrorist hideouts nearly always result in collateral damage, with innocents being killed.  This also feeds the hatred and again, the terrorists are winning in this respect. It is odd, but our sources indicate one rarely hears mourners chastising the terrorists for hiding out in an apartment complex, focusing on their destruction by the hands of Iraqi or coalition forces.  It is as if there is a broken connection in the minds of the Iraqi people between cause and effect.  This is a dangerous situation -- the Iraqi government needs to impress upon its people that the terrorists are hiding amongst them and that is why innocents are getting killed.

A factor that is favor of the Iraqi government, is that the terrorists have turned to targeting Iraqi citizens who are working in positions for the government or on coalition projects.  While the targeting is logical for the insurgents, there are signs it is backfiring.  When the so called "street" sees the target of an insurgents attack is clearly a Muslim, it weakens the insurgents position considerably despite the rhetoric.







National Economy

The Iraqi Economy is nearly non-existent. Oil revenues are obviously going to be critical. However, the Iraqi economy has many other exports to rely upon, and as these exports improve, the country should see a modest gain in GNP.  Unfortunately it is difficult to foresee when any appreciable gains.

Violence may have some impact on foreign investment and indeed on foreign workers in place.  The recent spate of kidnappings and beheadings is not helping, and once again the violence is doing what it intends -- slowing the pace of recovery and damaging the nation's economy.

We are waiting for figures from the turnover from the U.S. led Coalition Authority and will publish when those figures arrive.





Needs for Progress

The earlier sections have pointed out several needs which we will summarize here:

  1. Infrastructure improvements must continue and at a faster pace
  2. The violence must stop so that improvements in both repair, new building can take place and thus  jobs can be created.
  3. The Iraqi government needs to look at ways to improve rural living -- not assuming 21st century lifestyles, but improving basic living conditions and consistency of quality of life
  4. Political stability is a key issue, obviously.  There is a segment of the population which is torn between believing the terrorist rhetoric and celebration of the release from the old Iraqi regime.  Until that dichotomy is removed, there is a major danger of continued indigenous civil unrest.





Conclusion

Looking at news reports, one is led to believe is not a nice place to live.  While this is true in some part, it also untrue that the entire nation is under siege or that millions are starving.  The reality is that life in most places is tolerable and improving. The violence is certainly a huge issue that must be addressed, but taking that away will highlight the real problems the country faces, problems typical of an emerging third world country, but one with huge revenue and growth potential.  The biggest problems in the cities is stable employment, and in the rural areas the standard of living must improve.

The next largest problem is education.  The country is easily divided into two groups, educated technocrats and uneducated agrarians.  Since agricultural is a very tough proposition in a country with huge deserts, the rural communities must be better educated and efforts made to perhaps move light industry into areas outside the cities to provide places for newly educated young people to seek prosperity without committing to urban centers where competition is so fierce and life so much different.  This is a major undertaking, and it may take much time for the government to get a handle on, clearly well beyond the first election in October.






-  Copyright ©, 2004, Michael G. Crawford