the Blog Papers of Dr. Michael Sakbani; Economics, Finance and Politics

Dr. Michael Sakbani is a professor of economics and Finance at the Geneva campus of Webster-Europe. He is a senior international consultant to the UN system, European Union and Swiss banks. His career began at the State university of NY at Stoney Brook,then the Federal Reserve Bank of New York followed by UNCTAD where he was Director of the divisions of Economic Cooperation, Poverty Alleviation, and UNCTAD`s Special Programs. Published over 100 professional papers.

Monday, August 23, 2010


Iraq: the Epilogue of a Tragic War Decision
Dr. Michael Sakbani*

And so with a whimper, not a bang, did the US end the combat in Iraq on August nineteen, 2010. Seven years and five months of a shooting war came to an end as the last combat brigade crossed to Kuwait under the cover of darkness. History will surely ask if this war was worth the sacrifices, the destruction, the treasures spent and the agonies suffered by the American and Iraqi peoples.
We do not need, however, to wait for history`s verdict; there are reasonable signposts and discernable facts to access this war after its fog has now receded.
The US lost 4419 soldiers and suffered at least fourteen thousand injuries, many of which are unrecoverable (I-, August 23,2010). This is in addition to hundreds of Americans killed and injured while working for private security firms brought to Iraq and 348 allies deaths and more than a thousand injuries (Ibid.). By the most educated guess estimates, the Iraqi people suffered 100 thousand deaths through 2006. The figure is certainly higher in August 2010, by at least 15 thousand. The injuries are upward of seven hundred thousand (John Hopkins and al Mustansarya university, 2006) . The old Iraqi state was half dismantled and replaced by an ineffective, sectarian and corrupt state set- up populated by politicians whose personal interests override anything else (Sakbani(1), 2006) . Five and a half months after the Iraqi elections of 2010, these politicians cannot agree on a government, not on account of differences in programs or positions, but on account of who would be a Prim Minister and who will hold what position. The Treasury of the Iraqi state has been swindled and sapped by the new political class who set up sectarian fiefdoms in every Ministry with a cast of beneficiaries. And the people of Iraq, after seven and half years of occupation, still have no reliable supply of electricity, its production being half the daily needs. They have no sanitary water in many localities, no steady public services

*Professor of Finance and Economics, Webster, Geneva; former Director of economic Cooperation, Poverty Alleviation and Special Programs, UNCTAD, Geneva; senior consultant to the EU, the UN system & Swiss banks.

and no security in the streets. The new Iraqi security forces are infiltrated by militias loyal to the politicians who put them in place. They seem unable to cope with terrorist attacks which still take place almost on a daily basis anywhere. They have been unable to protect even government buildings, including the Ministries of defense and interior. According to the Chief of staff of the new Iraqi army, it is incapable of defending Iraqi territory: it has no air force, no modern air defense, no credible armored force, no electronic weaponry and no semblance of a qualified cadre for a military institution (Huffington- Post, August 13,2010) .
The Iraqi economy still wrestles with double-digit unemployment but that is a far cry from the catastrophic 40 to 30 percent registered in 2005 and 2006 (Sakbani(1), 2006). The GDP, which deteriorated in 2005 and 2006, has strongly recovered in 2007-2009, registering growth between 4.2 and 9.1 according to IMF statistics (Economy Watch, 2010) . This was largely due to the recovery of oil prices and their rhythm. There are, however, only faint signs of growth due to reconstruction. Per capita, real income has therefore fluctuated throughout the period. Given Iraq`s oil wealth and reconstruction needs, growth should run high, even double-digit, rates. The problem of slow reconstruction is due to delinquencies, theft, and inefficient execution. Iraq`s oil production hovers around 2.4 million barrels a day, not much above the rate during the UN blockade. This is due to slowness in repairing the oil sector and lack of investment up till 2010, not a rosy picture for the country with the second-largest reserves in the world.
After these seven years, Iraq is a place where Iran exerts the greatest influence and where regional contestants settle their differences. At the peak of the sectarian violence, four million Iraqis had left their country and two more millions left their homes to other more secure abodes. Today, the number of emigrants still stands at 2 million and there are tens of thousands of homes illegally occupied.
This unenviable situation has cost the USA upward of $1.2 trillion in direct and indirect costs paid in small part by the tax-payers and in large part by borrowing against future generations (Congressional Research Service,2010) . Is this what the US wanted to achieve there?
To be sure, Saddam Husain and his one-party dictatorial, repressive and lawless regime are no more. The Middle East is safer and more stable without him. Iraqis are today freer than before and the body politic more pluralistic and representative. And there is a political process, which while still not functioning properly, is at least there for all Iraqi political groups to eventually join. But Iraq is still not really democratic, not a country enjoying the rule of law and not a state which respects human rights and affords its citizens the equality of citizenry. There are still many disfranchised political groups and excluded individuals. In the overall balance of things, this is indeed a poor result bought at an exorbitant price.
When asked about what was accomplished, US officials say that the US has afforded Iraqis an opportunity to build a democratic, prosperous future. Naturally, none mentions the WMD`s or installing democracy anymore. From where the Iraqis are now to exploiting the opportunity, the road seems to be a long and arduous climb. This so-called “opportunity” is fraught with problems, some of which were created by the US.
At the top of the list is the sectarian apportionment introduced by the US governor of Iraq, Mr. L.P.Bremer, carrying out the instructions of Secretaries Rumsfeld and Wolfowitz (Sakbani(1), 2005). The sectarian mosaic existed in Iraq before the invasion, but it was a phenomenon of sociological development and communal authority. The Iraqi state, despite the over presence of the 27 % Arab Sunni minority in its leadership was not sectarian. The social relationships were without tension and the opportunity to advance was dependent on political rather than sectarian affiliation (Sakbani(2), 2005) . The US, with Israeli inspiration, sought to secure Shia domination in Iraq to somewhat cut it off from the predominantly Sunni Arab World and raise sectarian divisions among Israel neighbors. This has been a long term goal of Israeli policies. Thus under the rubrique of "de-Baathafication", instead of purging the leadership of the Baath responsible for the regime crimes, the US ended up marginalizing the Sunni Arabs who had been the back bone of the middle class and the Iraqi state. The sectarian apportionment has crippled the political process, blocked national reconciliation, and turned the Iraqi state into a pork-barrel operation for sectarian beneficiaries.
The occupation of Iraq brought in a political class of exiles and opportunists, who for the most part had no local organized existence and lacked local popular bases. Since they had neither a common national compact nor programs for building or running the state, the new class found in sectarian politics a context to introduce them to power in the political wasteland left by the Baath; the regime had cleansed Iraq of all political parties, of civil society organizations and any other organized groupings.
The 2006 Iraqi elections, conducted through a system of closed lists, faced the voters, who were elected for the first time in a generation, with the choice among lists whose candidates were invisible and unknown to them. In the absence of organized political choice, the only guidance was offered by religious leaders, local notables, clan chiefs and moneyed beneficiaries. Thus, Iraq was introduced to the politics of the sect, the clan, the family and the associate beneficiary. The new political cast had many who helped themselves to Iraq `s riches and exploited for personal gain the newfound opportunities. By 2006, Iraq attained the dubious distinction of being the world's second most corrupt state (Transparency International, September 2006) .
The heterogeneity of the new political class enforced by their exile and lack of any common political experience brought about a dysfunctioning leadership. They included Kurds, who basically seek independence, but who realize that the regional circumstances would not permit it. Thus, they want in the meantime to extract out of the Iraqi state in the prevailing chaos and vacuum, all the concessions and resources they could capture. There were the political Islamists with loyalty to Iran and, not lesser, their personal interests, and other groups with their own special agendas. Under Prime Minister Nouri al Maliki, these politicians achieved in four years little of national consequence and arrived at nothing in common. The elections of 2010, changed many faces but kept the same types heading the winning blocs. The political captains seem to want to continue in the same business: dividing the spoils and government positions to maintain the sectarian or ethnic bases. The elections did nonetheless; produce a new coalition striding sectarian lines, the Iraqi list (Iraqi), which is raising for the first time the issues of reestablishing the institutions of the Iraqi state and evolving a national program for a secular Iraq with no exclusions. However, the elections did not produce a clear majority. Four blocs account for 90 % of the seats but fall short of a majority for anyone. Even though the Iraqi, with the strong support of the Sunni Arabs, was the top winner, it could not form a government on its own and further, has been blocked from doing so by the two sectarian Shià blocs under pressure from Iran to keep the government in their hands. The two blocs announced a coalition, which turned out to disagree on many things, in particular, the crucial question of who will be the Prime Minister. For his part, Mr. Maliki, the head of the larger of the two Shia blocs, is still refusing to relinquish the Prime Ministership. He challenged the results of the elections he conducted, but failed to change them, and yet, he does not want, come what may, to leave his post; his bloc would only negotiate a future government if he is the Prime Minister. The Kurds, the fourth and smallest bloc, have their own particular nationalist demands which do not sit well with anybody. Except for Mr. Maliki`s bloc, no group wants him as Prime Minister, preferring instead one of their own. Five months after the elections, the impasse remains complete.
The US under Rumsfeld`s Pentagon management, worked hard to dissolve the institutions of the Iraqi state. When Mr. Bremer left, the apparatus of the Iraqi state was in tatters. The constitution which was drafted in five weeks on the basis of a US draft, in an Assembly dominated by the Kurds and sectarian politicians and boycotted by the Arab Sunnis, consecrated the feebleness of the central government and left in dispute many critical issues of sovereign control (Sakbani(2), 2006) . There is a common agreement that the disappearance of the Iraqi state with its accumulated experience and professional cadres is a prime reason for the chaotic state of Iraq. Iraqi Ministries are now staffed at high levels by newcomers, often lacking educational attainments or specialized knowledge. Ministerial decision making has been dominated by foreign advisers and senior political appointees drawn from the family, the clan or the sectarian affiliation. Such a system of none merit lends itself to protecting the vested interests of groups rather than running the affairs of the people. It is difficult to see how such a state can exploit the “opportunity” created by the US and right up the destruction of the war.
In the wreck left in Iraq, are the educational system and the Iraqi cadres of experts and professionals. Under the guise of purging the Baath (de-baathafication), tens of thousands of middle-class professionals in all walks of life were expelled from their jobs, left the country or simply were physically liquidated by the armed militias under the eyes of the US authorities. Those qualified people are not all Baathists, but they did not belong in the new sectarian order. Iraq, which has one of the best-educated elites in the area, is now largely bereft of experts who can be found scattered all over the world. The Universities, the Ministries, the Army, hospitals, schools at all levels, businesses and public institutions are all short on staff, expertise, and resources. Of the school-age children, 26 % are not attending schools (NationMaster, 2010).
How can the country recover from this state of wreck and dysfunctionality?
In our opinion, four things have to guide the program of any national salvation government and anchor an Iraqi National Compact. The first is building a strictly secular state with no room for religious or sectarian politics. Even, the sectarian politicians agree to this in theory. The second is cutting off and refusing all regional intervention in Iraqi domestic politics, in particular, that of Iran. Iran has cynically manipulated its local supporters to serve its own national interests and has dealt on Iraqi soil with its disputes with the US. It has aimed at using Iraq as a springboard for it regional ambitions.
The third thing is dealing with the separatist demands of the Kurds and their particularistic approach to Iraqi affairs. Historical experience shows that it is in the interest of Iraq to have a federal structure in which the Kurds have a wide administrative, but not political, autonomy. There should be no barrier to any Kurd being in any position in the new state. However, that does not mean allowing the Kurds to exploit the situation to annex to the Kurdish region the so-called ”disputed area” where they are neither in the majority nor wanted to dominate by the locals; there is nothing wrong or unusual for Kurds to be minorities in certain provinces as long as they are Iraqis like everybody else. That implies that the Kurdish region should be the three provinces demarcated by the structure of the Iraqi state. It also implies that the Federal government writ should run unhampered in Kurdistan and that the Kurdish militias, the Peshmerga, be totally dissolved in the new Iraqi army. Many Iraqis seem prepared to let the Kurds secede their three provinces if they reject a unified Iraq with 83% Arab majority (al Mustakila, the Democratic forum on Iraq) . There is no reason that a pluralistic Iraqi society is not good and viable for the Kurds. In the final analysis, the strong regional neighbors, Turkey, Syria and Iran will never allow a gathering of a National Kurdish state. Iraq has given the Kurds what no other neighbor can ever contemplate: a wide autonomy, a share in national resources, including budgetary funds, well in excess of their weight in the population -16.7 %- and no less, the Presidency, the command of the new army and about a fifth of the cabinet. What can Kurdish nationalism give the average Kurd more than that? Kurdish nationalism is really an old song in contemporary times.
Finally, the central Iraqi state must be rebuilt on the basis of a unified federated structure controlled by the center in foreign affairs, defense, national resources and macroeconomic policies. The new Iraq has to be Democratic and pluralistic, where every Iraqi has all the freedoms, rights, and protections afforded to any other.
This is not a utopia; Iraq has all the resources and talents to bring this vision into reality if its political leaders can think of national interest and the welfare of their fellow citizens. If the last elections showed anything, it did reveal that the people reject sectarianism and its associated old political faces and want a strong central state.
Geneva, 23 August, 2010.

1. This is the number on AUGUST 23,2010. See,the tables in, August 23, 2010.


3.A Mortality Study, 2002-2006. Bloomberg School of Public Health. Johns Hopkins University. Baltimore, Maryland. School of Medicine; Al Mustansiriya University, John Daly, “Iraqi Civilian Casualties,” July 12, 2005.

4.Michael Sakbani(1), “The genesis of the US problems in Iraq”, in, May 2006.

5.General Babaker Zibari, as reported by CNN, the Washington Post and the Huffington Post, August,11, 13 and 14, 2010.

6.Sakbani, Op.Cit, 2006, see the analysis of the Iraqi economy and its unemployment figures in the section on the cost of the war and its aftermath.

7.See for Iraq oil production,, August 2010.

8.For US statistics, see www.CRS.GOV, RL33110,CRS Report to US Congress, August 2010.

9.Michael Sakbani(2)“The New US foreign Policy; the case of Iraq”,, September, 2005, section entitled the Iraqi Mosaic.

10.Ibid., p.

11. Mr. Alexander Croft, the head of International Transparency, UK, said on Aljazeera TV on September 19, 2005, that Iraq is now ranked by his Agency as number one in corruption.

12. See the discussion of these Issues in the discussion of the constitution in Sakbani, op.cit, 2006, the section entitled Issues that cannot be ignored.

13. Statistics on Iraqi students and schools in, WWW.NationMaster.COM, august 2010.

14. For example, scores of Iraqi participants in al Mustakila`s “the Democratic forum on Iraq”, have expressed readiness to let the Kurds have their independence within their region. Al Mustakila is a TV station broadcasting out of London.