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With EU support, Iraq is slowly advancing on anti-corruption




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Since the US-led invasion to oust long-time dictator Saddam Hussein in 2003, corruption has become Iraq’s unshakable scourge, with successive governments trying and failing to tackle the problem. Now, however, the publication of the country’s Anti-Corruption Strategy for 2021-24, which was prepared by the Iraq Integrity Authority (IIA) and approved by President Barham Salih, is hoped to provide a renewed push for concerted anti-corruption action in Iraq.

The document comes mere weeks after the EU, UN and Iraq launched a partnership to suppress corruption in the country. The €15 million project seeks to “revise Iraq’s anti-corruption laws, training investigators and judges, and working to boost the role of civil society”, improving the justice system being the final objective.  In light of the new project – along with a new anti-graft draft law currently being discussed that aims to recover stolen funds and hold the perpetrators accountable – Iraq’s own Anti-Corruption Strategy comes at a time when international cooperation to curb illegal activities is at a new high.

Going after businessmen and judges

These initiatives are part of a wider EU-supported push by Prime Minister Mustafa al-Kadhimi’s, whose aggressive anti-corruption drive is targeting crooked government and judiciary officials in a bid to stop the massive budgetary losses that result from criminal activities. After all, al-Kadhimi came to power after public protests against the incompetence and immorality of the prior government in October 2019. The demonstrations prompted a shake-up in the Iraqi parliament, with al-Kadhimi promising to take a hard line on corruption upon his ascension to the hotseat.

Al-Kadhimi can already claim a clutch of high-profile arrests, including several prominent politicians, a well-connected businessman and a retired judge. In August 2020, he set up a special committee tasked with targeting high-profile individuals guilty of graft, with the first arrests of two officials and one businessman following the month after. The head of the national Retirement Fund and the chief of the Investment commission were the two civil servants apprehended, but it’s the businessman – Bahaa Abdulhussein, the CEO of electronic payment firm Qi Card – who perhaps represents the biggest fish, since his ample friends in high places demonstrate that even well-connected fraudsters no longer are safe from the law.

The biggest case so far this year is that of retired judge Jafar al Khazraji, who recently was handed a sentence of “severe imprisonment” for the illegal inflation of his spouse’s wealth by some $17 million in undeclared assets. According to the IIA, Khazraji was not only ordered to repay the sum in full, but was additionally slapped with an $8 million fine. The case is a landmark one given that it represents the first time that the judiciary has prosecuted an individual under a law against illicit gain of material wealth at the expense of the Iraqi people.

The reclamation of $17 million is certainly a positive development, but represents a mere drop in the ocean when compared to the $1 trillion which al-Kadhimi estimates Iraq has lost to corruption in the last 18 years. However, the precedent-setting nature of the sentence could be more valuable in stamping out malfeasance and encouraging the FDI that Iraq so desperately needs to rebuild its crumbling infrastructure.


Iraq’s economy on the line

Indeed, the prosecution of al Khazraji is significant for another reason. The judge had ruled against international companies Orange and Agility in their case against the Iraqi telecommunications firm Korek. The two foreign interests alleged that Korek had expropriated their investments without due recourse to the law, a stance which was refuted first by al Khazraji and then confirmed by the World Bank’s International Center for the Settlement of Investment Disputes (ICSID).

The ICSID verdict has been severely criticized as “fundamentally flawed” by Agility, because the ICSID essentially handed corrupt officials in the country carte blanche to do what they like with investors’ money, thus sending out sizable red flags to the overseas investment community. This is a development of which the EU has certainly taken note, even if the arrest of a judge implicated in the case may go some way towards restoring that fading faith in Iraqi justice.

European support on Iraq’s long road ahead

Such restoration is sorely needed, not least to rekindle the economy, which shrank by 10.4% in 2020, the largest contraction since the days of Saddam Hussein. Iraq’s GDP-to-debt ratio is expected to remain high, while inflation could reach 8.5% this year. Al-Kadhimi is certainly up against quite the challenge, with even his own party members stating that 17 years of entrenched corruption will need to be swept away in order to give the country a fresh start.

These are just the first steps on a long road to bring Iraq back from the brink, and the fact that every successive government since Hussein’s deposition has launched its own anti-corruption initiatives – and then failed to follow through on them – may make Iraqis wary of getting their hopes up. However, the initial arrests of prominent individuals, alongside the publication of an official Strategy aimed at unpicking the knotty tangle of corruption in the country’s higher echelons, are, at least on a technical level, encouraging indicators that the government’s efforts are standing on solid ground.

The EU’s role is now in helping the government maintain the positive momentum. Brussels has done well to remain in intimate contact with key figures in order to ensure the implementation of the IIA’s Anti-Corruption Strategy. Although it’s evident that a steep hill remains to be climbed, if even a few suggested reforms are realised – including a transition to e-governance, or an increase in the participation and collaboration of civil society groups – the government may edge forward in doing what none of its predecessors have managed.

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