Iraq’s New Administration and the Looming Budget Debate

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Iraq’s new Prime Minister, Adil Abdul Mahdi, has been referred to as a “gift to all” and the “ultimate compromise” for a deeply divided but steadfast Iraq.1.“Iraq’s new prime minister, Adil Abdul-Mahdi, is the ultimate compromise” : The Washington Examiner His election, which came on the heels of numerous electoral controversies and public calls for unification and compromise, is good news for a beleaguered country in the post-Islamic State era. However, Abdul Mahdi’s administration faces a vast array of challenges that, while not insurmountable, will prove difficult and potentially costly to deal with.

Foremost among the issues facing Abdul Mahdi and President Barham Salih is Iraq’s 2019 budget, a pressing problem considering the deficits faced in numerous sectors and the cost of reparations from conflict against the Islamic State. While previous budget debates in Iraq have also been wracked with strife, tensions are rising further following unrest across the country and a sharp divide between Baghdad and the Kurdistan Regional Government (KRG). Abdul Mahdi and Salih’s propositions are constantly marred by contention from all directions, with numerous actors striving to gain more out of the federal budget and many citizens claiming that they are underrepresented by their government. This article will focus on how three subsections of Iraq have reacted to the proposed 2019 budget, and what conditions on the ground have driven these reactions and demands.

The Proposed Budget

The proposed 2019 budget bill, drafted by MPs from several different political blocs including al-Nasr and al-Fatah, outlines national expenditures totaling $111.19 billion (~132 trillion Iraqi dinars), with a deficit of $22.6 billion.2.“Iraq proposes major spending hike under 2019 draft budget” : Iraq Oil Report The proposed budget encompasses $24 billion in spending increases compared to the previously controversial 2018 budget, and according to several MPs speaking anonymously it includes significant earmarks for military spending and reconstruction funding.3.“Iraq proposes major spending hike under 2019 draft budget” : Iraq Oil Report While the budget is substantial, the contents of the draft bill have come under fire from multiple fronts, and many claim that their interests will be underrepresented or not represented at all by the bill. While the bill’s language is not yet fully public, many are already concerned that it will continue historical trends of underrepresentation and misspending. The following analysis will look at how the regions of Basra/Dhi Qar, Anbar/Ninawa, and the KRG have reacted to the draft and what underlying causes prompted their reactions.

Basra and Dhi Qar

Iraq’s south is dominated by Shi’a, with small scattered enclaves of Sunnis and Assyrian Christians throughout. Though the provinces of Basra and Dhi Qar have been considered very stable and have provided a continuous stream of recruits and materials for the war against IS, federal neglect has become a central issue for many in that region. Since the withdrawal of the US-led Coalition from a ground role in Iraq, Basra and Dhi Qar have both seen rising poverty rates, rising unemployment, and consistently poor access to both clean water and electricity.4.U.N. Joint Analysis Unit report on Basra. Significant segments of the population consistently reported poor access to healthcare, daily blackouts, and lack of access to jobs and education, particularly among youth.5.U.N. Joint Analysis Unit report on Basra. In spite of promises from the federal government to alleviate these issues, little change was seen on the ground, and Basrawi locals began demonstrating in late 2017 after a blisteringly hot summer and troubles with the city’s electrical infrastructure.

Following months of small-scale demonstrations that seemed to have little effect, Basra erupted. Continuous blackouts shut off air conditioning and aggravated the summer heat, causing thousands of Basrawis, many unemployed young men, to take to the streets. Political offices were torched, the headquarters of a few Hash’d al-Shaabi regiments were assaulted and vandalized, and police and rioters clashed in the streets.6.“Mass protests sweep Iraq, target pro-Iran militias and parties” : Jerusalem Post7.“إطلاق 8 متهمين بآثار أعمال شغب في مظاهرات البصرة” : Asharq al-Awsat Demonstrators were killed by security forces, bodies appeared in drainage ditches, and the U.S. Consulate was damaged by rockets from an unknown source, further contributing to the chaos.8.“One Killed as Iraqi Protests Rage on” : Asharq al-Awsat9.“Seven dead, more than 30 wounded in southern Iraq’s rally” : Yeni Safak Local tribes in Dhi Qar vocally supported the protests, and government officials in both Basra and Baghdad rushed to put out the flames before they blossomed into a problem that was beyond their capabilities to solve. Calm prevailed only after then-PM Haidar al-Abadi visited Basra, spoke with protest leaders from Basra and Dhi Qar, and increased security patrols in the city.10.Facebook post of PM Haidar al-Abadi.11.“لدخول المركبات إلى شركة نفط   معتصمون يغلقون الطريق المؤدي” : Erem Diwar

Although the rioting ceased, civil disobedience movements have not lost momentum. Recent peaceful demonstrations in Basra city, often led by locals without the involvement of political figures, have consistently demanded increased representation in the new administration and have begun escalating as their issues remain unsolved.12.“تظاهرة سلمية في البصرة للمطالبة بجعل المحافظة اقليماً” : Iraq Akhbar Locals demand an increase in federal spending on their city and province, citing numerous infrastructure problems and a continuing energy crisis as the main drivers of their demonstrations. Parliamentary representatives, meanwhile, have jointly promised to abstain from voting on the 2019 budget should their demands for an increased share of federal spending for the province be ignored.13.“Basra MPs demand more money from budget” : Rudaw The prominent demand is that Baghdad allow more of the revenue generated from Basra governorate, which comes primarily from the oil and gas industry, to flow back into the province.14.“Basra MPs demand more money from budget” : Rudaw Other demands include the renovation of water treatment facilities, benefits and support for the unemployed, and various anti-corruption programs to treat rampant corruption and nepotism throughout the province.15.“تظاهرة سلمية في البصرة للمطالبة بجعل المحافظة اقليماً” : Iraq Akhbar

Dhi Qar Governorate has seen fewer acts of violence, but is nevertheless restless after months of ongoing infrastructure issues. High unemployment combined with barriers to access in several major labor fields has led to unrest among youth populations, particularly in the city of Nasiriyah, which saw some clashes between protestors and police in July.16.“‘’مجلس ذي قار ينتقد عادل عبد المهدي ويصف حكومته بـ “الحزبية”” : The Baghdad Post17.“Tribal head: Iraqi gov’t not serious in meeting protesters’ demands” : Rudaw Local governance councils in the region, meanwhile, have consistently called for support in their battles against water and electricity shortages.18.“ذي قار تطالب بدعم اممي لمواجهة تحديات نزوح شح المياه” : Nasiriyah Post Such shortages have become so disruptive that local elements have begun to call upon international aid groups to provide assistance to families forced to displace themselves due to water access issues.19.“ذي قار تطالب بدعم اممي لمواجهة تحديات نزوح شح المياه” : Nasiriyah Post20.Drought-stricken Iraq pleads for more water from upstream neighbors” : The National At the same time, an aging electricity grid and lack of funds for repairs means that blackouts, previously common in the area, have worsened as of late.21.“كهرباء ذي قار تصلح 30 محولة تعطلت نتيجة المطر في الناصرية” : Nasiriyah Post Poorly maintained generators have consistently failed as stress on the electrical grid remains high, leading to severe blackouts that can last days for some. In light of these unresolved issues, the Dhi Qar Governorate has criticized Baghdad for its apparent unwillingness to act, and publicly stated that it “expects the government to fail to provide services to its citizens”.22.“‘’مجلس ذي قار ينتقد عادل عبد المهدي ويصف حكومته بـ “الحزبية”” : The Baghdad Post PM Abdul Mahdi has yet to comment on these citations of his new administration but may soon have his hand forced as the people of both Basra and Dhi Qar continue to chafe against what they perceive as utter incompetence and negligence in Baghdad.

Anbar and Ninawa

Iraq’s restive western provinces, the vast and sparsely populated Anbar and the dry, war-torn Ninawa, remain a challenge to the new administration as they were to the previous one. A low-level conflict continues even though open warfare between the Iraqi government and IS militants is over, and much of the territory is garrisoned by Hash’d al-Shaabi forces and various tribal militias.23.“Iraq’s Anbar province: Still the playground of international forces” : Middle East Eye According to anonymous sources reporting to the Middle East Eye network, international Coalition forces also have a small but significant presence in the Anbar region, occupying local bases and working with upper-level Iraqi command to continue combating IS insurgency.24.“Iraq’s Anbar province: Still the playground of international forces” : Middle East Eye Though Anbar remains relatively quiet with the exception of sporadic IS attacks on various targets, instability remains an issue.

Anbar’s ex-governor Mohammed al-Halbusi, now the Speaker of Iraq’s Council of Representatives and close to President Barham Salih, has spoken out numerous times about Anbar’s status and potential resolutions. al-Halbusi’s experience with the ongoing reconstruction, brief but full of engagement, has brought him to call for several steps that are necessary for an effective reconstruction timeline.25.“ينبغي الاسراع باتخاذ خطوات حقيقية لايقاف الخروقات المتكررة” : al-Sumaria al-Halbusi has stated that a reduction of military forces and an increase in police recruiting programs is an important step, along with the redistribution of reconstruction aid to allow for fair delivery of money to the province.26.“Anbar governor wants police boosted and military back on bases” : al-Monitor27.“ينبغي الاسراع باتخاذ خطوات حقيقية لايقاف الخروقات المتكررة” : al-Sumaria He has not openly criticised any of Baghdad’s platforms or programs, but has made it clear that Anbar will be requiring more attention sooner, rather than later.

In Ninawa Governorate, which is also recovering from the destruction and destabilisation caused by the war, many local groups feel that Baghdad continues to ignore their plight. At the vanguard of these complaints is Atheel al-Nujaifi, one of the province’s most prominent political figures and also one of the most controversial. A member of the Muttahidoon bloc and brother of ex-Vice President Osama al-Nujaifi, Atheel al-Nujaifi has consistently claimed that Baghdad’s proposed budget is “insufficient for reconstruction” and will leave predominantly Sunni areas devoid of material and financial support.28.النجيفي: نسبة نينوى بموازنة 2019 فرصة جديدة للتطرف والجهل ولن” : Iraq Akhbar

In an interview with Iraqi media group Asharq al-Awsat, Atheel al-Nujaifi declared that “Ninawa’s budget cannot sustain the services in the province as well as reconstruction”, and accused Baghdad of withholding funds from the provincial authorities.29.“موازنة العراق لعام 2019 تفجّر أزمة سياسية مبكرة” : Asharq al-Awsat Osama al-Nujaifi has promised to take a stand for Ninawa province, echoing his brother’s sentiment and accusing Baghdad of denying Ninawa justice and the ability to rebuild.30.“موازنة العراق لعام 2019 تفجّر أزمة سياسية مبكرة” : Asharq al-Awsat Much like Anbar, Ninawa is a Sunni-majority province, with a number of tribes dispersed in its rural interior.

Erbil and Sulaymaniyah

Iraqi Kurds and Baghdad have had a long history fraught with strife and trouble, much of it owed to the destructive policies of the Hussein regime throughout the 1970s and 80s. While this article will not provide a comprehensive history of this relationship, some background may be useful.

Kurdish groups struggled throughout the 20th century to form their own independent state, with conflict erupting in the 1960s and the 1970s with no victory for the Kurdish people.31.Harris, G.S. “Ethnic Conflict and the Kurds”. Annals of the American Academy of Political and Social Science, 433(1), 1977. The Ba’ath government established by Saddam Hussein continued and accelerated a campaign of ethnic cleansing against the Kurds, killing hundreds of thousands throughout the 1980s in the brutal “Anfal” campaigns.32.“The Crimes of Saddam Hussein” : PBS Frontline The campaign committed against the Kurds was, arguably, a protracted one of ethnic cleansing designed to bring the restive Kurds to heel with everything from bullets to banned chemical weapons. Throughout the 1990s Kurdish resistance faltered as the Kurdish majority parties KDP and PUK fought a civil war, but when the Hussein regime was overthrown Kurdish forces reunited and rallied and gained autonomy and strength in the new Iraq. The KDP and PUK set aside their differences for a time and united to cooperate with American and Coalition forces, whose campaign against the Ba’ath was welcome. Since then, however, dreams of independence and power have often been subverted by the gnawing reality of a divided, uncertain Iraq.

The KRG and Baghdad have battled over the budget and political disagreements before, with arguments becoming particularly acrimonious following the federal government’s seizure of Kirkuk in October 2017.33.“Kurdistan and Baghdad: A Tangled Web Over Oil and Budgets” : United States Institute of Peace publication. Baghdad previously allotted 17% of the national budget to the KRG, following the settlement of a dispute between Erbil and Baghdad in 2004 by the mediation of the outgoing Coalition Provisional Authority (CPA).34.IMF Country Report No. 05/294, August 2005. However, following years of insurgency and the costly conflict against IS, ex-PM Haidar al-Abadi reportedly slashed the KRG’s budget share heavily in 2018, down to 12.67% of the total national budget.35.“Abadi: ‘I won’t allow the KRG to receive 17% budget share’” : Rudaw Abadi justified this decision as based upon the population ratio of the KRG to the entire country, but came under fire from Kurdistan’s lawmakers, who declared the change unjust.36.“Abadi: ‘I won’t allow the KRG to receive 17% budget share’” : Rudaw Kurdish lawmakers and politicians battled fiercely to restore the 17% annual share, even as PM Abadi left office following the election. Kurdish political blocs united over the issue, bringing it forward to the new debate over the 2019 budget in the hopes of receiving a satisfactory conclusion to their argument.

The blocs are now pushing for a lump sum of $10 billion (~12 trillion Iraqi dinars), smaller than their 17% demand but more than the 12.67% allotted in the draft.37.“MP reveals Kurdistan considering $10 billion share of Iraqi budget in 2019” : Rudaw A number of Kurdish lawmakers claim that the new allotment of $10 billion lump sum is a fair compromise, given the economic problems that the KRG currently faces. There is also a growing outcry over Baghdad’s resistance towards dividing the Sulaymaniyah governorate and establishing a new province in Halabja, which has given some Kurdish politicians grief towards the federal government.38.“KIU won’t support Iraq’s 2019 draft budget omitting Halabja as a province” : Rudaw Normally at odds over various issues, the KDP and the PUK have both found common ground over the budget debate and have dispatched lawmakers to Baghdad to bring their issue to various MPs and representatives of the Ministry of Finance.39.“MP reveals Kurdistan considering $10 billion share of Iraqi budget in 2019” : Rudaw The budget debate presents an opportunity for a united front for interests in both Erbil and Sulaymaniyah, and Kurdish parties are wasting no time in devoting resources to the issue in hopes of securing more funding for their beleaguered regions. The KDP and PUK, in particular, can find common ground here given its extreme relevance to both parties, and their mutual opposition towards many of the stances that Baghdad has taken towards KRG platforms. The disputes over the appointments to the positions of Defense Minister and Interior Minister, a whole other controversy that remains at the fore of current Council debates, only compounds these issues. 

So where does this leave Baghdad? In a troubling spot, for sure, but the current situation is the first chance since the unsettled Maliki administration for Iraq to see security and stability, or at least some relative form of it. With IS reduced to a restless insurgency and investors ready to return to Iraq’s oil, gas, and mining sectors, Baghdad has a chance to compromise with a plethora of surrounding actors and profit. Only time can tell what President Salih and PM Abdul-Mahdi will end up doing with regards to the ongoing issues facing their administration, but Iraq’s future is brighter than it was four years ago, and may continue to brighten if the right men make the right decisions. 

Trent Schoenborn

Trent is an analyst and contributor who has worked with the IR since its inception. He specializes in Iraqi politics and the civil war in Syria, and has been studying the latter conflict since it began. He has previously worked on Syrian Civil War Map as well as some academic research projects related to the region. He can be contacted directly at tschoenborn.00@gmail.com.

References   [ + ]

1. “Iraq’s new prime minister, Adil Abdul-Mahdi, is the ultimate compromise” : The Washington Examiner
2, 3. “Iraq proposes major spending hike under 2019 draft budget” : Iraq Oil Report
4, 5. U.N. Joint Analysis Unit report on Basra.
6. “Mass protests sweep Iraq, target pro-Iran militias and parties” : Jerusalem Post
7. “إطلاق 8 متهمين بآثار أعمال شغب في مظاهرات البصرة” : Asharq al-Awsat
8. “One Killed as Iraqi Protests Rage on” : Asharq al-Awsat
9. “Seven dead, more than 30 wounded in southern Iraq’s rally” : Yeni Safak
10. Facebook post of PM Haidar al-Abadi.
11. “لدخول المركبات إلى شركة نفط   معتصمون يغلقون الطريق المؤدي” : Erem Diwar
12, 15. “تظاهرة سلمية في البصرة للمطالبة بجعل المحافظة اقليماً” : Iraq Akhbar
13, 14. “Basra MPs demand more money from budget” : Rudaw
16, 22. “‘’مجلس ذي قار ينتقد عادل عبد المهدي ويصف حكومته بـ “الحزبية”” : The Baghdad Post
17. “Tribal head: Iraqi gov’t not serious in meeting protesters’ demands” : Rudaw
18, 19. “ذي قار تطالب بدعم اممي لمواجهة تحديات نزوح شح المياه” : Nasiriyah Post
20. Drought-stricken Iraq pleads for more water from upstream neighbors” : The National
21. “كهرباء ذي قار تصلح 30 محولة تعطلت نتيجة المطر في الناصرية” : Nasiriyah Post
23, 24. “Iraq’s Anbar province: Still the playground of international forces” : Middle East Eye
25, 27. “ينبغي الاسراع باتخاذ خطوات حقيقية لايقاف الخروقات المتكررة” : al-Sumaria
26. “Anbar governor wants police boosted and military back on bases” : al-Monitor
28. النجيفي: نسبة نينوى بموازنة 2019 فرصة جديدة للتطرف والجهل ولن” : Iraq Akhbar
29, 30. “موازنة العراق لعام 2019 تفجّر أزمة سياسية مبكرة” : Asharq al-Awsat
31. Harris, G.S. “Ethnic Conflict and the Kurds”. Annals of the American Academy of Political and Social Science, 433(1), 1977.
32. “The Crimes of Saddam Hussein” : PBS Frontline
33. “Kurdistan and Baghdad: A Tangled Web Over Oil and Budgets” : United States Institute of Peace publication.
34. IMF Country Report No. 05/294, August 2005.
35, 36. “Abadi: ‘I won’t allow the KRG to receive 17% budget share’” : Rudaw
37, 39. “MP reveals Kurdistan considering $10 billion share of Iraqi budget in 2019” : Rudaw
38. “KIU won’t support Iraq’s 2019 draft budget omitting Halabja as a province” : Rudaw