Iraq and its people have gone through nearly four decades of outright chaos: the eight year Iraq/Iran war, Saddam invasion of Kuwait, the Gulf War, more than a dozen years of economic sanctions, the 2003 US invasion, topped off by an intense onslaught by Daesh.
Relative calm has returned to Baghdad … but one would not describe today’s conditions as normal by any standard. Travelling 20 kilometres from the airport, escorted by two armoured SUVs, my convoy went through eight fortified security checks before arriving to the infamous green zone. Understandably, the two most prevalent sights in the capital remain tall cement blocks and barbed wire.
I was invited to Baghdad to chair two plenary panels for the Iraq Energy Forum and conduct an onstage interview with Prime Minister Haider Abadi. The political landscape is complex. Abadi needs to juggle an array of variables: Iran’s influence over the country, Saudi Arabia’s gesture to support Iraq with billions of dollars of investment to counter-balance Tehran, and let’s not forget the military presence of the US.
This is a crucial, yet another potentially explosive turning point. Iraqis are preparing to go to the polls May 12, around the same time the US looks to finalise a move of its embassy from Tel Aviv to (Occupied) Jerusalem and possibly terminate its nuclear agreement with Iran.
During our interview, Abadi said the decision by Israel, supported by the Trump administration, is wrong headed and ill-timed.
“It is dangerous and it is a bad move. In my opinion it’s not looking at the facts, the history,” which he said is vital to the Arab people. He also worries that tearing up Iran’s nuclear protocol could trigger a regional arms race.
“Any agreement to open the doors to competition and the acceleration in the programmes for nuclear power is the wrong decision,” said Abadi.
While the region remains on tenterhooks, he is convinced there are no “movements towards war,” which allows him to campaign as a force against corruption in a country with a semblance of stability.
“We are fighting corruption in a fundamental way, in a very organised way. We want corrupt people to know they will be held accountable for what they are doing.”
He is aware of the need to restore domestic stability and international confidence. Iraq ranked 169 out of 180 countries surveyed in Transparency International’s Corruption Perception Index — the worst performance in the Middle East and North Africa.
Members of Iraq’s highly educated diaspora who have comeback to help support the stabilisation of their “homeland” say the society remains shell-shocked after decades of unrest and economic despair.
UN sanctions imposed on Iraq after the invasion of Kuwait led to the country’s isolation just as international funds began looking to invest in emerging markets. “Remember this whole idea of emerging market investments. It is an old idea but the accessibility of it for the regular investor in the 1980s and turbo-charged in the 90s by the internet, communications; we missed all of that,” said Shwan Taha, Chairman of Rabee Securities, Iraq’s largest brokerage and investment bank.
Taha speaks from experience as an Iraqi born young man who left the country during the Iraq-Iran war and worked both for Franklin Templeton Investments and fabled investor George Soros. He describes his return to Iraq as entering a “time-warp” because the country missed out on the globalisation wave.
Crude production volume
What Iraq lost during the technology boom could be made up for, in part, by its bounty of natural resources, especially oil and gas. The country now pumps nearly 5 million barrels of crude, the second highest level within the 14 members of Opec.
But even in the energy sector, the results have not lived up to earlier projections due to the structuring of service contracts with international oil companies, which executives say rewards production volume, not profitability.
Royal Dutch Shell decided to pull out of the giant Majnoon field in the south after years of frustration. Total, which is a partner with PetroChina and Malaysia’s Petronas, also in the south, said they have expanded output, but policy changes are needed to find better contract terms.
That is the Prime Minister’s overall pledge, to create better conditions, with reduced corruption and greater transparency to welcome investment.
His next challenge, after he fought off Daesh, is renewing his mandate to govern by securing victory in May.
— The writer is CNNMoney’s Emerging Markets Editor.