BAGHDAD: Iraqi Prime Minister Haider Al-Abadi declared victory over the Islamic State (IS) group in December, attention immediately turned to how soon his government would start efforts to rebuild the Sunni-populated cities destroyed by the war against the group. These efforts are seen as vital for the stabilisation of the country and to prevent the re-emergence of the militants who have lost their Caliphate but may return to their guerrilla roots.
Much of the focus has been on how much the international community will contribute to the construction projects in order to help Iraq emerge from the rubble of the war and start building a better future for its people. But major donors led by the United States at an international reconstruction conference in Kuwait this week stunned many Iraqis by claiming that their country was rich enough to pay the cost of the war and that it should not expect a blank cheque for the rebuilding drive. The United States proposed that Iraq, which sits on the world’s third-largest oil reserves, should use its revenues from energy to finance private-sector investment. Washington argued that combined with international and regional business interests, Iraq’s own resources should be able to meet the country’s long-term reconstruction needs. While the declaration reflects US President Donald Trump’s abhorrence of the US being involved in nation-building, the strategy reflects the broader perspective of how making money and making war have long been related businesses. The move has underlined what has been known since the US-led invasion of Iraq in 2003 that the ensuing civil war has a strong commercial element from international and regional powers willing to profit from the prolonged conflict in Iraq.
With efforts to kick-start a national programme to rebuild Iraq now depending largely on investment and not donations, the question of how far geopolitical and commercial factors will affect the reconstruction process remains open. One way to understand the post-IS reconstruction is to look back at Iraq’s neo-liberal economic policies after 2003 and how far these have shaped the country’s economy, which depends mainly on its vast oil revenues. These free-trade and free-market policies were imposed by the US Occupation Authority in Iraq, and they have destroyed Iraq’s domestic production sectors and made the country depend completely on imports. The import-based economy has not only turned Iraq into a dumping ground for finished and mostly cheap consumer goods, but it has also made it a playground for competing regional and international powers for profits and markets. Even after oil prices collapsed in 2013, Iraq remained using the bulk of its petroleum revenues on imports. According to the CIA Fact Book, a summary produced by the US intelligence agency, Iraq’s imports amounted to $43.27 billion in 2016, or nearly half its oil income.
