Iraq goes the way of its Gulf neighbors

Among those who supported the invasion of Iraq in 2003, a primary hope was that the overthrow of Saddam Hussein’s regime would give rise, in President George W. Bush’s words, to a “free … stable … and prosperous” liberal democracy. This Western-style Iraqi democracy, it was expected, would serve as a model of freedom for other countries in the Middle East.

However, actual events over the past eight years have given rise to a very different picture. It is somewhat ironic that, far from moving away from its Persian Gulf neighbors in terms of its economic and social conduct, Iraq now has a much closer affinity to them, and this on account of two major trends.

First, consider the petroleum industry. Since the U.S. invasion, dependency on oil exports has increased dramatically, such that the industry now accounts for around 70 percent of GDP and 90 percent of government revenues. Similarly, in neighboring Kuwait, for instance, the petroleum sector provided 50 percent of GDP and 95 percent of government revenues.

Gone are the days before the Gulf war of 1991 when Iraq had a more diversified economy, so that the country was responsible for roughly 80 percent of the global trade in dates. At present, agriculture only comprises some 10 percent of GDP. Despite an $80 million plan by the Agriculture Ministry to revitalize date production, efforts have gone nowhere. Successive droughts, poor water quality, and the rising costs of fertilizers and pest control mean that output has decreased to 50 kilograms per date palm, compared with 150-200 kilograms in 1990.

Moreover, with global oil prices undoubtedly set to rise over the coming decade, the Iraqi government does not seem poised to branch out from the lucrative petroleum industry, which is still predominantly state-run. Young Iraqis consequently see no future in agriculture and are looking toward jobs in the energy sector and the state bureaucracy, where salaries are higher.

Second, there is a problem of Iraqi reliance on foreign labor in construction and in the performance of menial tasks. A U.S. State Department report on human trafficking around the world has highlighted the problem. As in Dubai and other countries in the Persian Gulf, Iraq has an endemic problem of employing illegal, forced labor. The migrant workers come from a wide variety of locations, including Bangladesh, Pakistan, Ethiopia, the Philippines, Nepal and Thailand.

A damaging feature of this development has been the deceptive practices of labor agencies that entice recruits with promises of good salaries and attractive working hours, often not telling them that their destination will be Iraq. Once these individuals find themselves in the country, their passports are confiscated and the laborers are compelled to endure long working hours and very poor working and living conditions, usually without pay.

The State Department report faults the Iraqi government for doing nothing to punish human traffickers, failing to collect data on the problem, and not investigating officials who might be involved in the trafficking, which is prohibited by the Iraqi Constitution. At best, Baghdad has planned to enact a draft law whose clauses hark back to the days of Saddam. The legislation forbids the use of illegal workers and entails the deportation of forced laborers and the fining of companies exploiting them.

However, the draft law cannot be approved while Iraq’s politicians continue to engage in personal power struggles, so that the government that emerged from the elections of March 2010 is still not fully formed. Hence, it is not surprising that the State Department has concluded that Iraq has a “negligible law enforcement effort” to combat human trafficking.

Curiously, however, the addiction to foreign labor has not featured among the declared grievances of protestors who continue to gather (admittedly in smaller numbers) in Baghdad’s Tahrir Square every Friday. In contrast, protests in Oman this year brought the problem of dependency on foreign workers to the forefront of issues that the sultanate must address.

Dependency on the energy sector means that Iraq is still stuck with a state-run economy it inherited from the days of Saddam Hussein. Iraqi politicians have talked for years about advancing economic liberalization and cutting down on the state bureaucracy. However, the growing income from oil exports explains why the government is not implementing reform.

If anything, Baghdad has only added to the public bureaucracy by creating more government jobs to compensate for the fact that the petroleum industry is not labor intensive.

This development, in turn, has impeded reconstruction efforts and increased corruption. Likewise, the great reliance on oil exports and the importation of foreign labor have only aggravated the problem of unemployment among the Iraqi people.

If Iraqi politicians, detached as they already are from the concerns of their people, wish to avoid sparking further civil and political unrest in the country, they will have to soon address over-reliance on oil revenues and the illegal use of foreign labor. Otherwise, they risk destroying the population’s trust in democracy, founded on a resentment of the decades of repression under the old Baathist regime.