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Since assuming the Iraqi presidency in October 2022, Mohammed Shia Al-Sudani has made a veritable crusade against corruption the heart of his domestic agenda. Despite this long overdue commitment to tackling the country’s most debilitating challenge, his progress has been, to put it politely, underwhelming. Systemic corruption continues unabated under the control of an entrenched and sectarian power-sharing system.
For all its colossal oil wealth, Iraq remains stricken by inefficiency, bureaucracy, endemic kleptocracy, and sprawling patronage networks. Pilfering of public funds has more or less become a national sport, from the intensely politicized civil service, which is sinking under its own weight, to the famously crisis-hit electricity sector, which was recently awarded a whopping $13.5 billion.
The entrenched nature of the corruption, backed by various factions with vested interests in maintaining the status quo, has impeded efforts to create more accountable governance for the Iraqi people.
The roots of this corruption crisis can be traced back to decisions made during the 2003 war and subsequent US-led “reconstruction.” During this period, Washington poured unregulated and unmonitored funds into multiple projects, creating a culture of graft in nearly every echelon of Iraqi governance, exacerbating the pre-existing patterns of corruption.
Instead of being transformed into an agent of much-needed change and progress for the Iraqi people, the public sector emerged from the post-war construction epoch as a center of corruption fueled by indiscriminate spending and lackadaisical supervision. A striking example of this occurred when aid contractors, Iraqi officials and US personnel were found to have directly engaged in corruption during reconstruction projects.
The US Special Inspector General for Iraq Reconstruction estimated that at least $8 billion, about 13 percent of the total amount allocated for reconstruction, was frittered away in this way. As a result, any hopes of building a robust, efficient and corruption-free public sector were blighted, leaving ordinary Iraqis to grapple with rampant structural deficiencies, made worse by a now interminable legacy of corruption.
The issue is exacerbated by the continual influence of Iran, which uses the corrupt power-sharing system to maintain a foothold in internal Iraqi affairs. This influence, executed through pro-Iran militias, has ensured the survival of systemic corruption. The state-sanctioned Popular Mobilization Forces, a collection of pro-Iranian armed groups, is a prime example of this. They command an annual budget of $2 billion, part of which flows into largely fictional state payrolls.
The involvement of Iran in Iraq’s nexus of corruption can be seen in the tentacles Tehran extends into key state ministries, in which pro-Iran militias have been successfully institutionalized and legitimized as autonomous actors. The PMF, established in 2014, has expanded into various activities, legal and illegal. It dominates markets and oversees illegal border crossings, customs evasion, and trafficking. Iraq's porous borders mean that about $10 billion in customs revenue is diverted and lost each year.
The PMF’s power not only lies in its weaponry but also in its economic reach and Iranian patronage, which have enabled the organization to embed itself even deeper into Iraq’s political and economic affairs. This entrenchment of Iranian influence means that attempting to tackle corruption is an almost insurmountable challenge for Al-Sudani’s government. The unchecked, unassailable presence of such malign external forces within Iraq’s institutional fabric serves only to bolster the resistance to reforms and perpetuate the corrupt power-sharing system that plagues the country.
At this rate, it is highly unlikely Iraq will be able to reduce the more than $3.5 billion it spends annually on natural gas imports from Iran to fuel its power stations, which are still only able to produce a little over half of the country’s total electricity needs.
If Iraq could only harness the power generation potential of its flared gas, it could yield output equivalent to double that of the current gas imports from sanctions-hit Iran. Unfortunately, while this makes sense on paper, in terms of avoiding the expense of imported gas and the trouble of finding alternatives when dollars are hard to come by, it is unlikely the current flawed situation will change given the extent of pro-Iranian influence in Baghdad.
Is there any chance that Al-Sudani might succeed in his anti-corruption efforts? Given the entrenched and widespread nature of the corruption, he faces a Herculean task. Overturning the current state of disarray would require not only radical institutional reforms but also a sea change in the culture of governance.
Iraq’s road to reform is littered with obstacles, many of which seem nearly insurmountable under the current political order.
Hafed Al-Ghwell
Several complex and interwoven mechanisms of corruption, from informal patrimonial networks to the instruments of state capture, are entrenched deep within the Iraqi core. Al-Sudani’s job is akin to that of an arborist whose task is not merely to prune a tree's dead or diseased branches but to surgically remove the malign roots that are preventing the tree of governance from flourishing.
Futile as it may seem, the prime minister could attempt to unilaterally foster change by restructuring key institutions marred by the scourge of corruption. Enhancing the autonomy of anti-corruption bodies would be a crucial first step in this process. His administration could work toward depoliticizing these institutions with the aim of insulating them from partisan influences. Taken together, these actions would slowly start to shift the culture within the corridors of power, cultivating a growing intolerance for corruption.
This, though, would be merely the first step in a marathon. A more systemic and profound shift would require greater societal involvement. Al-Sudani’s reign will be marked not by swift victories but by a continuing and relentless effort to cleanse the state of the widely entrenched corruption.
Further, the shaky legitimacy of the current government — propelled to power despite securing fewer seats than in preceding elections — casts a long shadow over his ambitions, as the very factions that prop up his government are among the beneficiaries of the labyrinthine corruption.
Where exactly does the US figure in this chaotic landscape? Missteps of the past might have left Washington with an unenviable role in the history of Iraq’s corruption saga, but it still has some key strategic levers that continue to function despite the influence vacuum left by its disengagement from the country.
Any “new” US strategy can be easily shaped to actively support efforts to tackle corruption and implement reforms, chiefly through Washington’s capacity to impose sanctions, lend money, and mediate. It could wield this influence by lending support to honest brokers within Iraq’s public institutions, thereby encouraging the development of oases of integrity that resist the tide of corruption. In doing so, the US would be throwing its weight behind those seeking to enact legislative change, strengthen judicial independence, and enhance institutional transparency.
Washington could further manage the narrative by shining a spotlight on corruption. By highlighting the thefts, the culture of patronage and systemic abuses in a high-profile manner, it might galvanize public opinion and encourage greater support for reform-focused candidates in future elections.
In addition, the US could maintain the economic pressure on corrupt entities through the judicious use of sanctions, ensuring that corruption is an unprofitable enterprise. At the same time, Washington and its international allies could bolster efforts to seize and refund illicitly acquired Iraqi wealth that is squirreled away abroad. Enhanced coordination with global watchdogs could also help ensure that aid and bilateral cooperation is contingent on the achievement of clear anti-corruption benchmarks.
Nurturing a robust civil society in Iraq to supplement Al-Sudani’s efforts could be another area in which the US might play an instrumental role. Nonetheless, the creation of a few oases of integrity will not be a panacea for the deep-seated and systemic corruption Iraq currently faces, nor is some clever maneuvering by Al-Sudani’s government likely to be enough.
However, the maneuvering could serve as a moral and functional counterexample, proof that there is sufficient will to make sure Iraqi public institutions operate with integrity and efficiency, even amid a sea of malfeasance.
That being said, Al-Sudani’s road to reform is littered with obstacles, many of which seem nearly insurmountable under the current political order. If a more accountable, democratic Iraq is the objective, the US strategy for achieving this needs a fundamental reset, one that shifts its role from that of passive observer to an active catalyst of change. Politics is, after all, the art of the possible.
• Hafed Al-Ghwell is a senior fellow and executive director of the North Africa Initiative at the Foreign Policy Institute of the Johns Hopkins University School of Advanced International Studies in Washington, DC, and the former adviser to the dean of the board of executive directors of the World Bank Group. Twitter: @HafedAlGhwell