On top of all the other things .. Iraq is heading toward a new crisis

Monday 10-08-2015 | 11:59:17

Twilight News / oil exports is even more important today in the Iraqi economy as part make up about half of the country's gross domestic product and 90% of government revenues.

Because of its dependence on oil state, which Palmsttmrben pay much attention to the conditions of the industry, and today being confused.

On the positive side, it seems that the country is pumped and exported more than expected, which is approximately four million million barrels per day, thanks to investment in production.

The government looks in Baghdad as the best with the Kurdistan relationship, a region which enjoys the semi Mata- as it maintained the agreement on the 2015 budget year terms, with pay less money than promised previously and to provide quantities of oil less than promised at a later time.

But Iraq's oil industry, and government budget, shrunk by falling oil prices.

As a result, the financial situation of the country subjected to a severe blow, it has dropped the price of oil in the market to half now and needs to be equivalent to a point, and the expansion of the budget deficit, forecasting a return to balance until the advent of Daash, a ratio of 9% of expected GDP.

In the past, Iraq's leaders had admit budgets without taking into account the serious decline in oil prices, and today forcing the acute shortage of revenue these leaders to cut new investments, and in accordance with, the Lukoil Russian and Royal Dutch Shell, EO that any Italian also included the reduction, and looks forward currently to openness and economic commentator for neighboring Iran as an environment safer investment.

Despite the improvement in the financial situation after the withdrawal of American forces in 2011, the drop in oil prices and rising fighting costs against Daash pay the Iraqi economy to the state of semi-crisis, according to the International Monetary Fund, the GDP of the country shrank by 2.7% in 2014, the rate of unemployment estimated at more than 25%.

The World Bank ranked Iraq as one of the worst places in the world to do business in 2015, Iraq came in sequence 156 of 189 countries. The government is in talks with the International Monetary Fund on a loan of up to more than $ 800 million to finance some of the budget deficit. However, the country requires further structural reforms if they are to achieve long-term economic stability.

And linked to Iraq's economic problems costly battles against increasingly Daash which controls large parts of the provinces of Anbar and Mosul, the second largest city in the country.

In order to stop the insurgency, many analysts called on the Iraqi government dominated by Shiites, to reconcile with the Sunni minority, however, the year a long list of grievances arising from atrocities committed during the civil war under US occupation sharp political conflict following the US withdrawal.

Iraqi Sunnis and claim they are being targeted by the security forces as punishment for complicity with Altmurden such as al-Qaida in Iraq and organize Daash. Perhaps the news has contributed, for detention without evidence, and the use of private de-Baathification laws in order to keep them away from lucrative government jobs, and forced eviction from their homes, the rise of organizing Daash. Many Sunnis and extremist groups seen as favorite to them on each of the Shi'ite-led government and the current security forces.

But the split between Sunnis and Shiites in Iraq is a symptom of a more fundamental problem of mismanagement. Louay Khatib was written for the Brookings Institute, explaining how it has been the concentration of power to a large extent, however, the executive branch and bureaucrats, who have a wide discretion to implement without legislative oversight or judicial policy.

The judiciary, which is already at a disadvantage after years of irrelevance in the Saddam era, today subject to pressure from the executive branch and it does not apply property rights properly, which is also where the worsening corruption after the US withdrawal in 2011.

Rather than be the cause of the ongoing violence in Iraq, poverty, today became part of the circle of weak feed the country's institutions, which he described as a Stanford economist Barry Ancast as "the trap of violence."

The main problem requires the reduction of violence in the long term to create alternative opportunities, but these opportunities tend to the need for reform that respects the rule of law under which, and the protection of property rights, and promote trade. However, these reforms are rarely absent kinds of opportunities that will reduce the violence in the first place, so the states being ruled badly like Iraq be trapped circle of violence.

It is clear long-term threat, posed by violence on the future of Iraq, through the increasing role played by Shiite militias, which often have trained and funded by Iran and that it is linked to the Iraqi government, which is fighting these militias today Daash. Our correspondent says the Financial Times Brozo Drakahi The Shiites dominate the security services "would have a profound and lasting impact on Iraq."

Sectarian depth has persuaded some analysts that the best option, or maybe not divide Iraq along ethnic or sectarian frameworks is the worst option.

The Iraqi Kurdistan is already largely self-control, and even that it plans to issue quasi-sovereign bonds to help finance the work of the development of the oil industry, as well as its fight against al Daash. He wrote David and Marina Ottaway of Forn-Pulse on the subject, describing how the Kurdish model encourages other provinces to seek more autonomy from Baghdad.

Not all agree, but most of the arguments against the division does not focus adequately on the poor governance of Iraq, in Iraq may be a partition is full or federal bad of my favorite things about the current system, despite the fact that the struggle over state finances, particularly access to natural resources would that poses enormous challenges.

The solution to the financial crisis in Iraq requires fundamental reforms on how Iraq is governed, not only defeat Daash sectarianism and reconciliation, but meager possibilities for reform from within the central government, some may pay in the vicinity of Iraq to push for more autonomy from Baghdad.

He described the Frederick Hoff, a senior fellow at the Atlantic Council, the growing movement towards self-government among the victims of the civil war in Syria, it is likely that minorities in neighboring Iraq, which got burned for years of corruption and abuse by their leaders, have the intentions similar.