The Problem Of Institutionalized Corruption In Iraq

July 8, 2013 at 6:57 am | Posted in Turkmens | Leave a comment
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Wednesday, July 3, 2013

The Problem Of Institutionalized Corruption In Iraq

Tsparency International is a global organization committed to fighting corruption. In April 2013 it released a report looking at the problem in Iraq, and its attempt to deal with it. Like many that have researched the issue, Transparency International did not find a pretty picture. It found that corruption wasn’t just at the bottom where bribes for example are commonplace amongst the police and bureaucrats. The real theft came at the top where all the political parties were involved in skimming money off of contracts, the oil industry, and the budget. It’s for that reason that Baghdad shows no real interest in dealing with the matter even though there are plenty of offices, laws, and agreements to prevent it from happening. It’s this institutionalization of corruption that will continuously plague the country, and prevent it from reaching its huge potential.

(Iraq Business News)

Every group that looks at corruption in Iraq finds a bleak situation. Corruption was widespread under Saddam Hussein, especially when sanctions cut off much of the country’s money. Almost everyone believes that it got worse after his overthrow in 2003. Transparency International in its annual report on corruption has consistently ranked Iraq one of the worst in the world. In 2012 for instance, it was 169 out of 175 countries with a score of 18 out of 100. The World Bank put Iraq at the bottom 10 percentile of nations trying to control corruption in 2011. The 2010 Global Corruption Barometer found that 77% of Iraqis surveyed believed that corruption had gotten worse in the previous three years with only 4% saying it had decreased. A poll conducted the next year by the World Bank found that 62% of companies said that corruption was a major obstacle to doing business in Iraq. This has all cost the nation tremendously. There’s no way to know exactly how much it has lost, because of theft, fraud, and embezzlement, but there have been several estimates. Judge Radhi Hamza Radhi, the former head of Iraq’s main anti-corruption agency the Integrity Commission said that from 2003-2008 $18 billion was lost. A study funded by the International Monetary Fund and World Bank estimated that $65 billion was smuggled out of the country from 2001-2010. In 2013, the Board of Supreme Audit, which is in charge of checking Baghdad’s finances, believed that $40 billion in illicit funds left the country each year. Those are staggering figures for a country that is trying to pull itself out of wars and sanctions. Losing that much money is simply robbing the future from the nation, and severely handicapping its development.

Corruption is an everyday occurrence in Iraq. One of the most common forms it takes is bribes. According to the Integrity Commission, the police, customs, and the judiciary asked for bribes the most. A poll by Transparency International conducted in 2011 found that 64% of Iraqis said they paid a bribe to the police. That was the worst institution in the survey. Paying money is also expected to get jobs in the police and army as well. This also has an affect upon the economy. The World Bank’s enterprise survey reported that bribes were asked for 33.8% of times in business transactions with the government. This rate varied across the country with some of the province at the high-end being Baghdad, 70%, Karbala, 89%, and Basra at the top at 100%. It was also different based upon the size of the company. For instance, 64% of medium sized firms said they were expected to pay up to get a government contract. At the bottom end, the citizenry to get better services or speed up the bureaucracy usually pays some money. The fact that this goes all the way up to winning tenders with the authorities shows the extent to which corruption is part of the governance of the country. Officials expect kickbacks in most transactions whether it is to get papers filed or to build a power plant. It is because this problem extends all the way to the top that it is such a dilemma for state building.

One cause of this rampant corruption is nepotism and clientelism. Every Iraqi government since 2005 has been a national unity one meaning that every party that wins a seat in parliament gets its own ministry and office. These officials then fill the government with their family members, followers, and tribesmen.

In 2012, the Bertelsmann Transformation Index reported that this kind of clientelism led to massive hiring of unqualified people into the public sector. For example, in 2011 the Integrity Commission stated that there were around 20,000 government workers with fake degrees. The Justice Ministry thought the problem was even worse at 50,000 employees. This extends to politicians themselves. In the 2009 provincial elections, 352 candidates had fake credentials and degrees, and 102 candidates in the 2010 parliamentary vote had them as well. Government offices continuously talk about dismissing all these people, but it either never happens or the ones who replace them are using fake papers as well. Without educated people and technocrats Baghdad can’t hope to carry out the planning and execution of the projects needed to reconstruct the country. What’s more important is maintaining the patronage networks the parties use to stay in power.

This also points to the high-level corruption, which is at the root of the problem in Iraq. In 2009 the Integrity Commission issued 152 arrest warrants for director generals or above, including eight ministers. Former Integrity Commission head Judge Rahim al-Ogaili was forced to resign in September 2011 after he discovered a network of shell companies stealing government funds, which was run by high level officials including some in Prime Minister Nouri al-Maliki’s office. Ogaili went on to say that the Baghdad had no interest in fighting corruption, and just wanted to protect itself from prosecution. In late 2012, the President of the Board of Supreme Audit told the Special Inspector General for Iraq Reconstruction that high-level theft and fraud had become institutionalized. It’s because all of the country’s political parties and their ministries are involved in the systematic theft of government funds that Iraq consistently ranks as one of the most corrupt in the world. It’s one thing for a policeman to take a bribe to look the other way and ignore a crime. It’s quite another for ministers to steal billions, and then have his party block him from going to court for his offense. It’s because those at the top are acting criminally that all those below them are following suit. It’s also the reason why the nation has done nothing about the problem. If all the parties are involved there’s no reason to go after offenders, because it would implicate them all.

This theft affects every aspect of the government. The budget for instance, is non-transparent. The Open Budget Survey gave Iraq a score of 4 out of 100 in 2012, which means hardly any information is made public. That means the people can’t hold officials accountable for what they do with the funds, and they in turn can do what they like without any scrutiny. Oil is Iraq’s most important industry, and brings in billions each month, which offers a huge source of money to steal. Oil smuggling for instance, is still going on from everything from local pipeline tapping to large-scale fraud. This all goes to financing political parties, individual politicians, gangs, and insurgents. Oil smuggling is estimated to have cost $7 billion from 2005-2008. In 2013, a strike amongst oil workers in Basra complained that their management was involved in stealing oil. The government has also failed to install meters upon the entire industry, probably because it would interfere with their nefarious activities. Finally, contracts with the security ministries have repeatedly been found to include kickbacks and other illegal activities. In 2008, former Integrity Commission head Judge Radhi claimed that $4 billion was lost in corruption in the Defense Ministry and $2 billion in the Interior. The fake bomb detectors are a perfect example. Jim McCormick who made and sold the devices was recently convicted of fraud in England, yet Prime Minister Maliki claimed that Iraq had taken care of the issue a long time ago, and that some of the detectors actually worked. To admit to wrongdoing would be to admit that the entire deal was corrupt from the beginning, and included the premier’s office. Instead, the fake devices are still being used throughout Iraq. At the end of 2012, an Iraqi delegation went to Russia to finalize an arms deal for the Defense Ministry, which involved huge kickbacks as high as $500 million allegedly going to the Defense Minister Sadound Dulaimi, former government spokesman Ali Dabbagh, the prime minister’s media adviser Ali Musawi, and various generals and others officers in the Iraqi military. It’s this illegality at the top that makes the situation in Iraq so bad. Iraqi officials seem to think that it is their right to steal the country’s resources and money at every turn. Governance is taking a backseat to greed, negatively affecting daily life and the future.

If the government wanted to it has the tools and resources to combat corruption. In 2007 it adopted the United Nations’ Convention Against Corruption. It went on to develop an anti-corruption strategy with the help of the international organization. It repealed Article 136b of the Criminal Code that allowed ministers to stop investigations and protect their officials. Baghdad has signed onto the Extractive Industries Transparency Initiative, which covers the oil and natural gas fields. It has the judiciary, parliament’s integrity committee, the Integrity Commission and Inspector Generals in each ministry and office to look into corruption, the Board of Supreme Audit to go through public finances, and the Anti-Corruption Committee to coordinate all this work. The problem is there is no will to implement these laws and initiatives or to support these various offices. Instead the heads of the Integrity Commission have routinely been dismissed, and the prime minister attempted to disband the Inspector Generals. The courts are supposed to be independent, but have continuously come under pressure from the government and other forces, which prevents it from convicting anyone but the lowliest officials of corruption. That doesn’t stop Maliki from talking about taking up the fight against this issue every year, but those are just empty words. His State of Law list and all the others are up to their necks in robbing the government till, and therefore has no reason to push the matter. Instead he has stood in the way of investigations, and helped get rid of several Integrity Commission heads.

In its overview of corruption Transparency International pointed out why it is such a pressing issue in Iraq, and why it will not be solved. Everyone from the clerk at a government office to top ministers are stealing billions of dollars each year. Most government contracts involve bribes and kickbacks, while oil is being smuggled and funds stolen. The agencies tasked with fighting this problem have been made ineffective by the leadership who are partaking in this theft. The result is that Iraq is one of the most corrupt countries in the world with no end in sight. As long as everyone in the government feels that they can take a piece of the pie there is no incentive to stop the practice, and it becomes institutionalized as part of running the country.

SOURCES

Aswat al-Iraq, “Ministries of Defense, Trade, Health, Municipalities, electricity – the most corrupt ministries in Iraq, Parliament official says,” 7/19/11

Dagher, Sam, “Iraqi Report on Corruption Cites Prosecutors’ Barriers,” New York Times, 5/6/09

Al-Rafiydan, Al-Zaman, “Iraqi Integrity Authority Identifies $49M In Corruption, But Recoups Only A Fraction,” MEMRI Blog, 6/15/11

Ramzi, Kholoud, “iraq gets tough on fake qualifications, up to 50,000 jobs at risk,” Niqash, 4/18/11

Shafaq News, “Integrity Commission announces names of wanted in the Russian arms deal investigation,” 11/29/12

Sowell, Kirk, “Inside Iraqi Politics No. 50,” 11/21/12

Transparency International, “Iraq: overview of corruption and anti-corruption,” April 2013

 Posted by  Joel Wing    Musings on Iraq

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