Iraq’s Coming National Challenges - Key Issues in Shaping Iraq’s Future and a Strategic Partnership

Posted in Iraq , Democracy , Peace and Conflict | 14-Jan-11 | Source: CSIS

While it is tempting to focus on Iraq's very real political divisions -- and its ongoing, low-level insurgency - it is equally important for both Iraqis and the US to realize that they must take immediate steps to focus on the full range of issues that will define Iraq's future.

Iraq's politics will continue to present a serious risk of instability for at least the next decade, and violent terrorist groups and other factions will remain a major problem through at least 2015. Key risks like the divisions between Sunni and Shi'ite, and Arab and Kurd, remain critical issues. So do the many tensions and rivalries between leaders and factions, and the ongoing challenge from violent Sunni and Shi'ite extremists.

Shaping Iraq's Future: The Need to Look Beyond Politics and Ongoing Violence

At the same time, political and internal security challenges are only part of the story. Iraq faces a wide range of additional challenges that its government, its security forces, and its economy must meet that affect all Iraqis. These same challenges will play a major role in US efforts to create a lasting strategic partnership with Iraq, as well as in shaping Iraq's relations with all other states.

Many of the challenges are the result of some 30 years of constant crisis since the beginning of the Iran-Iraq War in 1980, and some have limited Iraq's growth and development since the power struggles that led to the violent overthrow of the Iraqi monarchy in July 1958. Others are the result of the broad failures of the US and international aid and national development programs that followed the invasion in 2003, and that have been documented in detail by the Special Inspector General for Iraqi Reconstruction (SIGIR). Every aspect of Iraqi society has been affected by the Iran-Iraq War (1980-1988), the invasion of Kuwait and Gulf War (1989-1991), sanctions and low level civil conflict (1992-2003), and invasion and civil war (2003-2010).


* Iraq must make critical decisions about the nature of its strategic partnership with the US, its relations with Iran, and how it addresses other neighboring states. It must build a stable modus vivendi with Turkey, establish a clear pattern of relations with the other Arab Gulf states and Arab world, and deal with Syria.

* Iraq must create armed forces that can both deter and defend the country in dealing with foreign threats, and deal with terrorism and insurgents within a framework that steadily converts to a rule of law dominated by police and civil courts. It must create effective manpower plans to deal with the freeze that began in 2009, and which leaves some 250,000 personnel in a force structure intended to have 322,000. In the process, it must decide on the future size of its forces - including both manpower and major equipment, the source of its arms imports, and military training and advice, and how much such efforts will be linked to a strategic partnership with the US or other states.

* Iraq must create a stable structure of police and security forces linked to a rule of law where courts and detention facilities match the role of police. It must choose between its traditional approach to justice systems and the "evidence-based" concepts its foreign trainers and advisors have advocated. It must create a Ministry of the Interior with personnel sized to Iraq's post-insurgency needs, rather than the present 464,000 plus. (There were approximately 297,000 provincial police forces (IPS and Iraqi Civil Defense Directorate), 115,000 federal forces (FP, DBE, PoED, Facilities Protection Service (FPS), and OP), and 52,000 in the Ministry Headquarters and its functional force directorates in June 2010, and plans existed to add at least another 45,000) It must decide on the future role of outside police and rule of law assistance. In the process, it must find a new balance between central and local justice/policing efforts; find ways to deal with national sectarian and ethnic divisions, establish a clear legal and functioning basis for human rights, and find ways to limit corruption and the impact of both organized crime and terrorist/insurgent threats.

* Iraq must come to grips with the structure and funding of the lower level security forces like the Oil Police (29,000 growing to 45,000), Electricity Police (18,000), and Facilities Protection Service (growing to 120,000); and the future role of private security forces. These forces involve large numbers of jobs, significant costs, and activities that are critical to both protecting Iraq's economy and attracting foreign and domestic investment. Reform plans do exist, but predate the formation of the current government and could tie large numbers of Iraqis into low grade, low productivity jobs at high cost almost indefinitely into the future.

* Iraq must find ways to deal with the prolonged budget crisis that began in 2009, and what may well be a $10 billion deficit in 2010. It must make effective tradeoffs between current to mid-term economic stability and the need for reconstruction and development. It must transition away from dependence on large-scale foreign aid while seeking what aid it can still obtain. It must create effective and realistic plans to bridge the funding gap that will exist until it can make major increase in oil imports, while accepting the risk of continued dependence on imports. It must accomplish this in ways that achieve a stable balance between competing ethnic, sectarian, and regional interests.

* Iraq must come to grips with the acute economic pressures caused by high levels of under and unemployment, the lowest per capita income in the Gulf (Iraq ranks 159th in world in per capita income vs. 87th for Iran, 60th for Saudi Arabia, 2nd for Qatar, 7th for Kuwait.) It must deal with grossly unequal income distribution driven by special interests and wartime profiteering/corruption/crime. It must do so in ways that recognize the impact of massive population growth (5.2 million total population in 1950, 29.7 million in 2010, and an estimated 40 million in 2025), an extremely young population (some 40% are 14 years of age or younger vs. 20% in the US), and the growing breakdown and decline of its education system since 1982-1984.

* Iraq must decide on how to deal with its obsolete and grossly inefficient state industries, and the collapse of its large state military industry sector. It must decide how much of its economy will shift to the private sector, and be open to foreign investment. It must establish clear structures for taxation, property rights, investment laws, business-oriented rule of law, and the protection of business operations from insurgents, terrorists and criminals. These reforms must shape both the future of its industrial and its service sectors.

* Iraq must focus on its petroleum sector as its key near to mid term source of operating and investment capital, and reach clear decisions as to whether to continue to seek outside investment, and how to develop the role of the state in managing petroleum investment and development. It must decide how to allocate petroleum revenues in ways that encourage ethnic, sectarian, and regional stability. It must seek more efficient and secure ways of distributing and exporting petroleum, and eliminate dependence on product imports and shift towards product exports.

* Iraq must simultaneously deal with a major crisis in agriculture and water, driven by a complex mix of inefficient domestic agricultural economics/infrastructure/water use; the impact of drought that may be climate change related; and increase upstream use of water by Syria and Turkey. It must create a new level of efficiency and price structures competitive to Iran and Turkey.

* Iraq must accomplish all of these activities while creating a new structure of governance that develops the level of expertise and competence necessary to deal with the impact of more than 30 years of constant crisis while finding a new balance between central, provincial, and local government. This new structure of governance must achieve a new level of ethnic, sectarian, and regional stability. It must also create solutions to the crisis in governance that cripples the education and health sectors, and that has created government structures that are often corrupt, dominated by power brokers, and tied to grey economic activity and organized crime. It must deal with the acute problems in the Iraqi constitution, and the failure to create an effective and workable mix of executive and legislative power and electoral systems that are perceived to be fair and avoid both future paralysis of the government and the risk of strong men and coups.

* In the course of meeting these challenges, Iraq must find a new balance of government services that do not favor any given faction, meet essential human needs, and encourage the development of the private sector rather than reliance on the state. This means key changes in the role of the central, provincial and local governments. It also means a change from a focus on security and stability to one on service. There are no clear measures of the gaps in key services today, but it is clear that key sectors like education and health are at the crisis level.

It is difficult to quantify many of these challenges. Decades of crisis and war have focused on other priorities, and Iraqi figures are often partial or lack credibility. Similarly, the USD often failed to develop credible plans and data under the pressure of dealing with an ongoing insurgency and implementing aid programs under wartime conditions.

Detailed US reporting has also virtually ended at the unclassified level. The last Department of Defense quarterly report was issued in June 2010, and this reporting seems to have ended with the formal end of the US combat mission in Iraq. The Special Inspector General for Iraqi Reconstruction issued its most recent report in October 2010, and it is not clear what level of reporting it will issue in the future. The State Department has a quarterly report of its own but it is not tailored to deal with these challenges, and its efforts to create a Stability Model that could address them seems to have an uncertain future.

Moreover, virtually all US unclassified reporting to date has looked backwards without any meaningful effort to examine the future. With the exception of some SIGIR reporting, the only US attempts to look forward have consisted largely of programmatic budget requests - none of which address requirements, action plans, and measures of effectiveness in any meaningful way.

Nevertheless, there are some are important indicators of how serious the challenges are. These indicators are summarized in five reports which presents key data, trend charts, maps and other information drawn from a range of US official sources:

1. The first briefing provides an overview of key trends and is entitled Iraq's Coming National Challenges: Transition Amid Uncertainty. It is available on the CSIS web site at It provides a summary picture of Iraq's security challenges and internal divisions, but it also shows the seriousness of Iraq demographic challenges, how far short its per capita income falls relative to other Gulf states, the real world limits to its oil wealth, the impact of its current budget crisis, and how far it is from having the kind of security forces that can defend it against outside threats.
2. The second provides focuses on the fact the US may have formally halted combat operations, but the insurgency is scarcely over. It is entitled Iraq's Coming National Challenges: The Course of the Fighting and Continuing Security Threats, and is available on the CSIS web site at On the one hand, it shows how critical it is for the US to provide an effective military train in g mission and arms transfer effort after 2011, and how critical; the State Department's propose INL police development effort will be. On the other hand, it is clear that security and stability will not be possible without far more effective Iraqi governance and economic development, and efforts that fairly meet the needs of all Iraqis and not given ethnic and sectarian elements.
3. The third focuses on the scale of Iraq's economic challenges. It provides data that show just how serious Iraq's structural economic and budget problems are, although key data are not available on income distribution nationally and by region, on under and unemployment, on the sectoral problems in Iraq's agriculture and industry, and many other key aspects of Iraq's future development. It is entitled Iraq's Coming National Challenges:
Economy, Demographics, Budget, and Trade, and is available on the CSIS web site at
4. The fourth report is entitled Iraq's Coming National Challenges:
Developing the Petroleum Sector, and is available at This report shows the continued level of US and global dependence on Iraqi energy, and how critical Iraqi and other Gulf energy security problems now are. It also provides a series of realistic estimates of how long it will take Iraq to develop its petroleum exports to the point where they will allow Iraq to fund both its urgent immediate economic needs and its economic development and security forces.
5. The fifth report is entitled Iraq's Coming National Challenges:
The Past and Future Role of U.S. Aid, and is available on the CSIS web site at This report is largely historical and shows how important US aid has been in the past, and the critical role it played in supporting Iraq governance, rule of law, economic development, and security during the long period of internal co0nflict between 2003 and 2010. As is discussed below, similar are not available on future US plans for a strategic partnership, and the role the US will play after US combat forces withdraw in 2011.

Meeting Iraq's National Challenges

These briefings has their limits, but they show all to clearly Iraqis, and Iraq's new government, that must now make hard choices necessary to deal with each set of challenges. Iraqis must now assume full responsibility for every important aspect of their future, and it is clear that they will have to make difficult trade-offs between conflicting interests and priorities, and in allocating scarce resources.

They show that some of these challenges will take at least a decade to resolve, while others will put a strain on Iraq indefinitely into the future. These are no stable solutions to many of these forces; they will require constant adjustment and pose a challenge to Iraq's government and society that has no real end.

Iraq's future will depend on how well Iraq's new and future governments focus on these challenges rather than political infighting and self-interest, or are paralyzed by Iraq's factional divisions, and Iraq's internal violence. Much will depend on the level of realism with which Iraqis face the seriousness of these issues, and understand that they must find solutions and not export blame, wait for outside help, or defer effective action. If these challenges are not addressed it could paralyze or cripple Iraq's progress as a national for years to come. Far too many other nations in the MENA region, and the world, have failed to address such issues and fallen far short of their potential to develop and compete on a global level.

Iraq does not yet have all of the abilities it needs to determine the scale of many of these problems, prioritize solutions, formulate realistic plans, and the manage their implementation. Iraqis sometimes seem to be in near denial of the scale of some challenges. In other cases, they formulate plans that are clearly too ambitious to function and fund. Politics create further problems because of tensions within and between ministries and between them and the Prime Minister's office. This often leads to long delays as technocrats, and officials wait for decisions at the top; to conceptual plans that are not implemented; or to factional infighting at a wide range of levels.

Implementing the Strategic Partnership Agreement

Iraq will need continued outside aid at many levels to analyze its future requirements, develop effective plans to deal with each challenge, and actually fund and implement them. The US can provide much of the aid Iraq needs in terms of specialized advisory and planning skills, civil and military training, and the much more limited aid Iraq will need to bridge the period between its present budget crisis and the time its oil revenues can give Iraq the funding it needs to fully finance its security and economic development.

Such aid will be critical if the US is ever to claim any real "victory" in Iraq; and the US must be realistic in addressing how serious Iraq's broader problems are, its own responsibility in making some worse, and the need for programs for the continued aid programs proposed by the State Department and the Department of the Defense.

The US cannot build a nation - it has shown this all too clearly in both Afghanistan and Iraq. It can, however, help a nation build itself. If it is to serve its own strategic interests in the Gulf, the Middle East, and ensuring the security of the global economy, it too must face the seriousness of these issues, and understand that its role in Iraq may be far more limited, but must be strong and effective enough to help Iraq move forward.

The State Department and Department of Defense have created the broad structure that would keep advisory missions in Iraq, and which could address both Iraq's need for security assistance and its need for in improving its governance, economy, police and rule of law. If properly funded, these plans would give Iraq a strong US Embassy in Baghdad, Consulate Generals in Basrah and Erbil, and Embassy Branch Offices in Mosul and Kirkuk.

They would create a strong US Military training Mission, and lay the groundwork for the creation of military forces that could deter and defend against potential threats like Iran through US military assistance and foreign military sales. US experts estimate that Iraq will need such aid through 2020, although the scale would diminish steadily with time.

The State Department would assume responsibility for help Iraq develop police forces tailored to its needs and justice system by taking over responsibility for such training from the Department of Defense on October 1, 2011, and give it to a Police Development Program (PDP) led by the Bureau of International Narcotics and Law Enforcement Affairs (INL), and based in Baghdad, Erbil and Basrah. This program is anticipated to be a robust program for the next three to five years to bridge the gap until the Iraqi Police Service is self-reliant. After that time, the PDP will reduce in size and scope to a more centralized advising program commensurate with Iraqi needs.

Such aid will be expensive - costing some $7 to 9 billion a year in the initial years following the withdrawal of US forces by the end of 2011. At the same time, it will be a fraction of the costs during 2003-2011, and, it will be far less costly than dealing with an unstable and weak Iraqi, or one that comes under Iranian influence. It is also a vital step forward in showing that the US can develop effective efforts to give the wars it fights grand strategic value, rather than waste military victories be failing to give them lasting meaning.