It was meant to be the icing on the cake. The crowning of Iraq as champions of the Arabian Gulf was supposed to bring to a conclusion a tournament that had welcomed Iraq back into the international scene.
Celebrations, however, were overshadowed by the reported deaths of at least four from a stampede which also injured dozens of others ahead of the tournament’s final on January 19. Poor crowd control, awful security protocols and mismanagement resulted in the fatal chaos.

Instead of the focus being placed on sport, the failure of the security forces and resulting tragedy at the final became a metaphor for the gross ineptitude of the Iraqi government and burst the bubble of the two-week high that had been the Arabian Gulf Cup.
With hours to go before kick-off it was clear Iraqi government officials were not in control of the tens of thousands of fans who had descended on Basra’s ‘Palm Trunk’ stadium. Government officials quickly began discussing the possibilities of postponing the final of the tournament or even having it transferred to another neutral country as news of causalities began to spread.
Yet the government should have anticipated such crowds and been much better prepared. It was known the match was sold out and it was expected that those without tickets would attempt to crash the match.
Just two weeks earlier, after having attended the opening ceremony in Basra myself, I had written about how badly organised the crowd control was. It was a disaster waiting to happen as tens of thousands were shepherded through bottlenecked gates.

The failures of the government to prepare for the chaos is akin to the patchwork solutions they have implemented to combat years of malignant corruption and collapsing public services.
Even the infrastructure for the football facilities highlighted how jerry-built the rest of the preparation was. Iraq did invest in constructing a stunning 65,000-seater stadium in Basra, but what about the surrounding infrastructure? Dirt tracks lead up to the stadium. A lack of public transport facilities means that cars must rush towards the stadium down single-lane roads, alongside pedestrians. And on January 19, an inadequate number of turnstiles and riot police contributed to the deaths of excited spectators. The government must be held to account.
But as is usually the case with Iraq, the government – in a press release by the prime minister – chose to brush over the failures and instead praise the security forces. “We are also saddened by the unfortunate incidents that took place” is all Prime Minister Mohammed Al-Sudani said, opting to not address the deaths directly. Instead, his statement — which thanked teams and fans for participating in the tournament — had a self-congratulatory feel to it and referred to the prime minister’s “feelings of hope and pride”.
Iraqi fans of course used the occasion to remind the government of their grievances, as the final was due to kick off, by unfurling a banner of Omar Sadoun, a young protestor who was killed by the country’s security forces during a wave of anti-governmental protests in 2021. In all, around 600 Iraqis had died in the crackdown on those protests.

This is all money which could have been used to bolster Iraq’s failing public services, including crowd control in Basra.
In Basra, for example, more than 100,000 people were hospitalised in 2018 because of a lack of access to clean water. Last summer Basra also suffered from consecutive days without any electricity, despite soaring temperatures, once again sending people to hospital as a result of heatstroke and severe dehydration. This even impacted football matches leading up to the Arabian Gulf Cup as electricity cuts switched off the floodlights during matches.
The corruption can be found in each corner of Iraq’s government, including the health sector. After decades of underfunding, hospitals struggle to care for patients in dire need of treatment. Drugs destined for public consumption often get sold to private businesses with officials pocketing the profits.
Even the sports sector has been impacted by corruption and incompetence. The Basra International Stadium was first opened in 2013. That surrounding roads, turnstiles and access into the stadium have still not been developed a decade later is directly related to the preventable deaths at last week’s final.
What was meant to be a joyous occasion has sadly been shadowed by the unnecessary loss of life.
Iraqis should be proud of the success of their team at the Arabian Gulf Cup. Their government, though, has no reason to feel proud of itself. The stampede in Basra should serve as a reminder to the government that fighting corruption and supporting public services must now become a priority for Iraq to truly progress.
Without that, every win for Iraq will be accompanied by an own-goal.

The present political system in Iraq is enshrined in the constitution enacted in a hurry in 2005 under American occupation and with strong input by American-supplied experts. The constitution calls for a parliamentary system. Voters elect the parliament, which in turn elects the president and the speaker of the parliament and designates the prime minister that will form the government.
Not written in the constitution but solidly enshrined in the political praxis is the requirement that the president be a Kurd, the speaker a Sunni, and the prime minister a Shia. In addition, it is also understood by all that cabinet posts must be distributed among all groups in a way that reflects their political weight and creates a balance acceptable to the main players. Since all ethnic and sectarian communities are deeply divided into factions represented by a plethora of political parties, the process of selecting the leadership after the elections is always difficult and protracted.
The delay after the 2021 election was extreme, but it is normal for the process of government formation to last five or six months. As a result, the connection between voters’ choices and the government is rather distant. In the United States, the connection between the vote and the outcome is filtered by the Electoral College. In Iraq, it is filtered by months of bickering and bargaining among political factions and their foreign supporters. The delay alters the balance of power among them by the time the government is formed.

From a strictly technical point of view, Iraq’s formal democratic system worked reasonably well since 2005. The country held elections for a transitional parliament to write the constitution in January 2005, then parliamentary elections in December 2005, March 2010, April 2014, May 2018, and October 2021 (the latter elections were anticipated because of the unrest sweeping the country).

Politically, the functioning of the democratic system was more problematic. Each election saw the participation of far too many parties for any of them to receive a majority. Instead, the vote splintered, first along sectarian and ethnic lines, then along political rivalries within each group. This required the formation of alliances representing major sectors, with each group demanding ministerial posts. The formation of a government required almost 6 months after the December 2005 election and over 9 months after the March 2010 election. In 2014, and again in 2018, about five months separated the elections and the choice of a prime minister.

The formation of the current government was the most difficult and dysfunctional. Negotiations among the parties stretched for almost a year until October 2022, and the parliament that finally voted for the prime minister was not the one elected a year earlier. By that time, the Sadrist movement, which had won the plurality of the vote in 2021, had withdrawn all its representatives from the parliament, Moqtada al-Sadr had declared, not for the first time, that he was withdrawing from politics, and the vacancies left by the anti-Iran Sadrists were filled by members of a pro-Iranian Shia alliance called the Coordination Framework. The parliament that approved the new cabinet, in other words, was quite different from the one elected one year earlier. 

The election-based political process the United States imposed on Iraq after the occupation has not resulted in democracy. It has not resulted in governments that reflect the choices made by voters. It has not led to the formation of governments capable of even beginning to tackle the problems the country faces. I am not talking about the truly daunting, perhaps intractable problem of building some sense of common identity and purpose in the deeply divided country. I am talking of something much more banal, like restoring reliable electricity in a country rich in energy sources and with rapidly growing revenue from its oil exports. The system is too bogged down in the politics of balancing the factions to address policies that would improve the lives of Iraqis.

So-called democracy has failed to bring about either social peace or solutions to concrete, non-political problems. The population is dissatisfied and the newly formed government is fragile. Some have even called for early elections in the hope a new cabinet would be more representative—a singularly bad idea likely to lead to more months of stagnation under an acting prime minister.

​The United States has bequeathed Iraq not democracy but a system of ethnic and religious representation unlike any Iraq had before. I am not arguing of course that before the US occupation ethnic and sectarian tensions did not exist in Iraq. With few exceptions among parties on the left, political organizations identified with a sect or ethnicity. What the United States did, however, is make ethnic and sectarian identity the backbone of the political system, just as it did in other deeply divided societies where it had a voice in the matter.

US intervention in the wars that followed the disintegration of Yugoslavia in the 1990s resulted in the formations of political systems that enshrined religion and ethnicity as determining factors. The Dayton Accord mediated by Ambassador Richard Holbrooke on behalf the United States resulted in a seemingly clever, but in reality grotesque, creation in Bosnia that includes a federal system, one component of which is also a federation, and a collective presidency which requires constant international supervision to function even minimally.

The tragedy of systems based on ethnic and sectarian representation is that they offer a short-term solution for a country in crisis, but at a staggering long-term price. Such systems perpetuate and deepen social cleavages, resulting in lasting instability. Lebanon, with a confessional system dating back to the 1940s, is as divided and conflict-ridden as ever and essentially no longer functions as one country. Every election cycle brings new promises of reform, with analysts proclaiming that the younger generation has turned its back on sectarianism, but in reality, nothing changes. Ethiopia managed to avoid a break down in 1992 by instituting a system of ethnic federalism, but now it is back at war with itself, with ethnic identities stronger than ever.
There is no country where ethnic- and sectarian-based governments have brought peace. To the best of my knowledge, there is no country that has been able to free itself from such a system once adopted. In the name of democracy promotion, the United States has put Iraq on the way to long-term institutionalized strife.

​

MARINA OTTAWAY
Former Senior Research Associate and Head of the Middle East Program, Carnegie Endowment for International Peace

Iraq is facing a deepening hole in its public finances because of a crackdown on corruption and dollar smuggling by the US Federal Reserve since the “theft of the century”, Iraqi officials have told Middle East Eye.

The crisis, which is expected to worsen in the next few weeks, has been caused by a collapse in the daily trade in dollars through a currency auction run by the Central Bank of Iraq.
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The Iraqi government depends on the auction to convert dollars, which it earns through oil revenues, into Iraqi dinars. Last year, about $200m per day on average was being sold through the auction to private banks and companies.
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But that figure dropped sharply in the final two months of the year, falling to a daily average of $56m by late December, according to data reviewed by MEE.

Now the government is facing a shortage of dinars, which has left it struggling to pay public sector salaries and meet its other monthly obligations.
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A senior official at the Central Bank of Iraq, who spoke on condition of anonymity, told MEE: “The problem we are facing now in Iraq is the scarcity of the Iraqi dinar, not the dollar.”
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Neighbouring countries, which depend heavily on the official foreign currency exchange markets in Iraq to obtain dollars, are also facing a liquidity crisis with Iran, Turkey and Syria all affected, according to officials in Baghdad.

The crisis has affected the wider economy, with the dollar exchange rate on unofficial markets rising from 148 dinars to 163 dinars since late November.

The price of consumer goods has increased. This week, the price of rice rose to 2,350 dinars per kilo (about $1.57), up from 1,850 dinars per kilo (about $1.25), while the cost of cooking oil has more than doubled, from 1,250 dinars per litre (about $0.85) to 3,000 dinars (about $2).

The Iraqi officials whom MEE spoke to denied any direct connection between the current crisis and the so-called “theft of the century”, in which about $2.5bn was stolen from Iraq’s tax authority through a state-owned bank between September 2021 and August 2022.
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But they conceded that the US Federal Reserve had imposed more stringent checks on private banks buying dollars through the auction two months ago, just weeks after details of the theft were disclosed by the Iraqi Ministry of Finance on 10 October.
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Iraqi Prime Minister Mohammed Shia al-Sudani said in October that most of the stolen money was believed to have been smuggled out of Iraq.
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In November, Judge Haider Hanoun, head of the Federal Commission of Integrity (FCI), Iraq’s anti-corruption watchdog, said Iraq had sought help from friendly governments, international organisations and the United Nations to recover the stolen money.

One of Sudani's advisers, who spoke to MEE on condition of anonymity, said the Federal Reserve had started checking external financial transfers in November in an attempt to trace the stolen funds.

This had caused delays in the release of transfers and led to a reduction in dollar sales through the auction, the adviser said.
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The Federal Reserve also introduced checks on the source of funds held by private banks participating in the auction, prompting many of them to withdraw and increasing the unofficial exchange rate, the adviser said.
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Crisis meeting

Late in December, the Coordination Framework, the largest political coalition backing the government, held a meeting in Baghdad to discuss the rising cost of the dollar and the crisis in the Iraqi markets.

The meeting was limited to senior leaders in the coalition, Sudani and Mustafa Ghaleb, the governor of the Central Bank.

Ghaleb told the meeting that the Federal Reserve had “serious indications” of dollar-smuggling operations to neighbouring countries, according to one leader who attended the meeting.

Ghaleb named two Egyptian banks based in Dubai to whom most of the dollars bought in the auction had been transferred in the period being investigated, the leader said. The dollars had then been transferred on to Oman and then to Iran.

​Four private Iraqi banks which had transferred the bulk of the money to the two Egyptian banks had been ordered by the Central Bank of Iraq to stop dealing with them in November, following a directive from the Federal Reserve, the leader said.

According to a document seen by MEE, the Central Bank also ordered banks and other financial institutions to stop dealing in dollars with the four banks “for audit purposes” on 6 November.

This was challenged in lawsuits brought against the Central Bank by all four banks - Al-Ansari Islamic Bank for Investment and Finance, Al-Qabidh Islamic Bank for Finance and Investment, Asia Al Iraq Islamic Bank for Investment and Finance, and the Iraqi Middle East Investment Bank.

But their cases were rejected this week by the Financial Services Court, which affirmed the right of the Federal Reserve to prohibit them from dealing in dollars.

A financial adviser involved in the “theft of the century” investigation told MEE that the episode had furnished the Federal Reserve with “conclusive evidence of the theft of government funds that were taken out with government instruments.

“They could not turn a blind eye to it,” said the adviser. “It provided the required motivation for the Federal Reserve to impose its procedures on private banks and the Central Bank of Iraq.

"They [the Americans] have been looking for this opportunity since 2014 to pounce on foreign currency auction sales, but former prime ministers have always obtained exceptions under the pretext of buying electricity, fuel and other things from Iran.

“But this time the story is different."

MEE contacted the Federal Reserve for comment but had not received a response by the time of publication.

Oil sales revenue

The Iraqi government needs at least eight trillion dinars (about $5.5bn) per month to pay the salaries of government employees, retirees, beneficiaries of social welfare, victims of terrorism and others, and this is secured largely through the currency auction.

Most of this comes from Iraq’s oil revenue, which since 2003 has been paid in dollars into an account held by the Federal Reserve Bank in New York.

The US Treasury transfers $10bn annually to the Central Bank of Iraq from the proceeds of oil sales, in order to strengthen its foreign currency balance.

This amount is delivered in cash in four instalments. All dollars are new and have serial numbers registered with the Federal Reserve for easy tracking, officials said.

The Central Bank of Iraq then sells the dollars through the foreign currency auction and other channels to obtain dinars for the Ministry of Finance.

Now the decline in dollar sales has caused a shortage of dinars for the Central Bank of Iraq. Even at its peak, the auction does not usually raise enough to meet the $275m which the government needs each day. 

This shortfall is usually covered from currency stocks held by the Central Bank, through internal loans between the bank and the government, by printing more currency, or by other financial activities.

Foreign currency auction data for the past four years reviewed by MEE shows that the amount of dollars traded remained stable, at an average of about $200m per day during 2019 and 2020, despite the decline in oil prices, the Covid pandemic and a recession.

In the first three months of 2021, the amount traded in the auction dropped to historic lows, with just $3m traded on some days.

But in the second week of April, the daily amount jumped suddenly, with an average of $190m traded every day until the end of the year.

In 2022, dollar sales did not fall below an average of $200m per day for the first 10 months of the year.

Two financial advisers who spoke to MEE said the increase from April 2021 was likely linked to the “theft of the century” plot. 

They said the figures aroused suspicion that the theft had started earlier than September 2021, as preliminary investigations had suggested, although they offered no further information to back up this claim.

'Options are limited'

Since the collapse in auction revenues, the Central Bank has opened new outlets selling dollars directly to citizens through the currency auction system, in an effort to raise more dinars.

But data showing foreign currency sales for the past few weeks show that the bank is still selling an average of less than $90m a day.

Iraqi officials expect the situation to deteriorate further over the next few weeks, after the Central Bank launched a new electronic platform for the currency auction earlier this month.

The Central Bank said in a statement that it had launched the platform "in coordination with international bodies for the purpose of ruling and organising window operations for buying and selling foreign currency and ensuring effective control over it”.

The new platform links all banks with the Central Bank and requires banks to disclose information about their customers requesting financial transfers, beneficiaries, correspondent banks and other details.

"The new platform has complicated things more. The actual owners of the money do not want to reveal their identity or the source of their money, so we don’t expect the auction sales to improve soon," one of Sudani's advisers told MEE.

"The pressures are increasing and the situation will get worse if the government does not take decisive measures to contain the crisis. The problem is that the options available are very limited and need time," he said.

The Iraqi parliament has not yet approved the annual budget for 2023, but the amounts allocated for salaries and compensation in the proposed budget, which must be paid in local currency, amount to about 100 trillion dinars ($68bn).

The senior official at the Central Bank told MEE that the bank currently holds about 83 trillion dinars ($56bn), and that quick solutions were needed.

“This does not bode well, and we cannot relax," he said.

“The foreign currency auction window is our primary means to call up the Iraqi currency, so if auction sales remain low, the Central Bank will have to issue a new edition of the local currency."
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​Devaluation risk

Issuing a new edition of the currency would reduce the value of the dinar and further raise the rate of inflation, officials told MEE.

During their meeting with Sudani and Ghaleb, the leaders of the Coordination Framework rejected the governor’s proposal to issue a new edition of the dinar "as it is a risk that will add new burdens on the shoulders of the government and the citizen", one of the attendees told MEE.

Instead, they urged Sudani and Ghaleb to go to Washington to seek to negotiate a six-month grace period before new measures are brought into force, to allow the government and the Central Bank “to be prepared”.

They also called for audits imposed by the Federal Reserve to be relaxed, for procedures for external money transfers to be quicker, for an increase in the number of official dollar sale outlets, and for tighter controls on dollar smuggling through the Kurdish autonomous region of northern Iraq.

"We know that the new measures strengthen the Iraqi economy despite the great pressure it places on everyone, but this will not last for a long time and they will limit corruption in the currency auction," the leader told MEE. 

"The leaders know that private banks and the foreign currency auction represent the infrastructure of major corruption networks in Iraq, so they agreed that fighting corruption will only be achieved by addressing this issue.”

The Iraqi economy is suffering from the US dollar's rise as a result of smuggling dollars outside of Iraq.

As Prime Minister Muhammad Shia al-Sudani entered Basra Stadium on Thursday to attend the final game of the 25th Arabian Gulf Cup, hundreds of Iraqis chanted, “Bring the dollar price down.” 
The exchange rate of the US dollar to the Iraqi dinar reached 1:1,659 Friday, the highest price since 2004. 
The rise in the dollar price began shortly after the new government came to office in late October of last year, During the previous government, the rate was stable at between 1,450 to 1,470 dinars to the dollar.  

​Several reports attribute the rise to the "smuggling" of US dollars — or illegal transfers — from Iraq to Iran during the term of the new government, which was formed by a majority of militias and political groups close to Iran.

An Iraqi source told Al-Monitor that US officials have brought this issue up several times with Prime Minister Sudani, most recently by White House Coordinator for the Middle East and North Africa Brett McGurk last Monday.  

The US Ambassador to Iraq, Alina Romanowski, has been in close contact with the prime minister, holding more than a dozen meetings since the government came to power, and the exchange rate was always at the top of her list.  

In order to address the issue, the Iraqi central bank banned four Iraqi banks from using US dollars: Al-Ansari Islamic Bank for Investment and Finance, Al-Qadhaf Islamic Bank for Finance and Investment, Asia Iraq Islamic Bank for Investment and Finance, and the Iraqi Middle East Investment Bank. 

The central bank also announced that it is auditing several other banks and financial organizations in an attempt to stop the illegal use of dollars in Iraq.  

Iran is facing a severe economic crisis due to sanctions, with the US dollar's value against the Iranian rial reaching a peak recently of 43,000 rials to the dollar, the highest rate in history. 

Iraq imports gas and electricity from Iran regularly, which is exempt from US sanctions. However, Iraq is not allowed to transfer money to Iran. Thus, Iraq transfers the gas and electricity payments in Iraqi dinars to accounts in Iraqi banks owned by Iranians.  

Yet given the current circumstances, Iran needs US dollars to control rising price and stabilize the economy. 

The smuggling of US dollars, however, is not limited to Iran. Iraqi militias are reportedly smuggling currency as well to Syria and Turkey.  

​Three years ago, the vast marshlands of southern Iraq’s Dhi Qar province were flourishing. Fishermen glided in punts across swathes of still water between vast reed beds, while buffalo bathed amid green vegetation. But today those wetlands, part of the vast Mesopotamian Marshes, have shriveled to narrow channels of polluted water bordered by cracked and salty earth. Hundreds of desiccated fish dot stream banks, along with the carcasses of water buffalo poisoned by saline water. Drought has parched tens of thousands of hectares of fields and orchards, and villages are emptying as farmers abandon their land.

For their biodiversity and cultural significance, the United Nations in 2016 named the Mesopotamian Marshes — which historically stretched between 15,000 and 20,000 square kilometers in the floodplain of the Tigris and Euphrates rivers — a UNESCO World Heritage Site. The marshes comprised one of the world’s largest inland delta systems, a startling oasis in an extremely hot and arid environment, home to 22 globally endangered species and 66 at-risk bird species.

But now this ecosystem — which includes alluvial salt marshes, swamps, and freshwater lakes — is collapsing due to a combination of factors meteorological, hydrological, and political. Rivers are rapidly shrinking, and agricultural soil that once grew bounties of barley and wheat, pomegranates, and dates is blowing away. The environmental disaster is harming wildlife and driving tens of thousands of Marsh Arabs, who have occupied this area for 5,000 years, to seek livelihoods elsewhere.

​​Experts warn that unless radical action is taken to ensure the region receives adequate water — and better manages what remains — southern Iraq’s marshlands will disappear, with sweeping consequences for the entire nation as farmers and pastoralists abandon their land for already crowded urban areas and loss of production leads to rising food prices.

The Mesopotamian marshlands are often referred to as the cradle of civilization, as anthropologists believe that this is where humankind, some 12,000 years ago, started its wide-scale transition from a lifestyle of hunting and gathering to one of agriculture and settlement. Encompassing four separate marshes, the region has historically been home to a unique range of fish and birdlife, serving as winter habitat for migratory birds and sustaining a productive shrimp and finfish fishery.

​​But in the early 1990s, Saddam Hussein began systematically destroying the marshes — bombing and draining them to evict and punish Marsh Arabs for participating in uprisings against his regime. Ultimately, the Iraqi president’s campaign reduced marsh water levels by 90 percent. After the Iraq War, the new government and Marsh Arabs began to dismantle embankments and drainage works; a subsequent U.N.-implemented rehydration project reported restoring surface water and vegetation to 58 percent of the marsh’s original size by 2006. Wildlife began reappearing, and by 2020, when the post-Saddam recovery was at its peak, around 250,000 Marsh Arabs had returned to their homeland to resume harvesting reeds, cultivating crops, herding water buffalo, and fishing.

The marshlands and their surrounding buffer zones currently cover roughly 4,000 square kilometers, but recent environmental gains are newly jeopardized as Iraq enters its fourth year of drought. Upstream, in both Turkey and Iran, new dams and diversions continue to proliferate, without coordination or international cooperation, on the rivers that supply almost all of Iraq’s water.

Last July, the Iraqi government said that its water reserves had dropped by 60 percent since the previous year. The low water flows have left huge swathes of marshland completely dry. Without water for irrigation, farmers don’t plant. Without roots to hold soil, desertification looms.

“The situation in the marshes now is worse than when Saddam was trying to destroy them,” says Dr. Hayder A. Al Thamiry, a professor of water resources engineering at the University of Baghdad who works for the government’s Centre for Restoration of Iraqi Marshes and Wetlands (CRIMW). That’s because water at that time still flowed from Iran into eastern Iraq’s Huwaizah Marshes, keeping at least that portion of the system alive. But ever since Iran, in 2009, completed construction of a 56-kilometer-long weir along its border with Iraq, water no longer flows into the Huwaizah during periods of drought. Now all the marshes, says Al Thamiry, “are suffering very badly.”
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Low river flows have knock-on effects on the quality of what water remains. Today, sea water intrudes as far as 189 kilometers upstream from the Persian Gulf and has destroyed more than 24,000 hectares of agricultural land and 30,000 trees. Without inundations of fresh water, pollutants from agriculture, the oil and gas industry, and sewage have become more concentrated.
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​Climate change is, of course, making matters worse — diminishing rainfall (Iraq has seen record low rainfall in recent years) and increasing temperatures, which accelerate evaporation from reservoirs and streams. According to the U.N. Environment Programme, Iraq is the fifth-most vulnerable country to the impacts of climate change. “Over the last couple of years there has been consistently less rain, less water, less productivity from the land, and an increasing number of dust storms,” said Dr. Salah El Hajj Hassan, the UN’s Food and Agriculture Organization representative in Iraq.

Mismanagement takes a toll as well. Iraq’s water infrastructure hasn’t been sufficiently maintained or modernized; unlined ditches and canals leak water into the soil; and power cuts hinder water pumping and storage. Often, farmers flood their fields to irrigate, rather than using more parsimonious, targeted ways of watering, and villagers dig illegal wells and divert water from shared rivers.

The dropping water levels have caused extensive crop losses, making it increasingly difficult for millions of Iraqis to feed their families. According to a survey of households in Anbar, Basra, Dohuk, Kirkuk, and Ninewa provinces conducted by the nonprofit Norwegian Refugee Council (NRC) last summer, one quarter of respondents — in the marshlands and beyond — experienced upward of 90 percent wheat crop failure due to lack of water. One in three households surveyed reduced the area of land they cultivated, and 42 percent of households stated that their production of barley, fruit, and vegetables declined in comparison with the previous cropping season.

​From the start of last summer until late October, more than 2,000 families were forced to abandon their homes due to the retreating marshlands, according to the FAO’s El-Hajj Hassan. Some of the displaced have moved to areas of marshland that still have water, while others have abandoned their traditional way of life and moved to cities like Basra or Baghdad.

Tensions among those who remain in the marshes are rising, and security consultants believe that water scarcity, and specifically the disappearance of the marshlands, could affect national security. According to Eimear Hennessy, a former risk analyst for G4S Consulting, “The thousands of people that have been uprooted and impoverished by the ongoing crisis in the Mesopotamian Marshes are likely to be more susceptible to recruitment by non-state actors” — militias and terrorist groups — “that make promises of an attractive future.”

According to Nature Iraq, the recent drying of the marshes has triggered a collapse in wildlife diversity, with populations of Binni, a brownish-gold fish highly prized by Marsh Arabs, plummeting. “Two thousand officially registered fishermen have lost their source of income and are now unemployed,” Saleh Hadi, the Dhi Qar agriculture directorate, stated in October.

​Before the drought, the Marbled teal duck, listed as near threatened by the International Union for Conservation of Nature, appeared to be thriving in the marshes, as was the endangered Basra Reed-warbler and the native Iraq Babbler. But with water levels dropping, Nature Iraq said, these birds are far less frequently seen.

Livestock are suffering too. Water buffalo, who graze in the rivers, now have a hard time finding clean water and sufficient food; thousands have died due to disease and malnutrition. “The lower water levels are having a devastating impact on the buffalo farmers,” said Samah Hadid, a spokesperson for the NRC. “The buffalo breeders that we are talking to are becoming increasingly desperate.”

As the outlook worsens for communities that live in Iraq’s marshlands, NGOs are promoting actions that could reduce the impact of drought, including investment in water filtering and treatment systems for areas with high salination levels. They are pushing Iraqi authorities, at the national and regional level, to collect more data on water flows and on the impacts of scarcity, and to improve the regulation of aquifers to prevent over-pumping, which diminishes groundwater quantity and quality.

​The Iraqi government is providing some grain farmers with salt-tolerant wheat; breeders are working on drought-tolerant sugar beets; and academics are advocating for programs that offer conflict-management training to communities that are struggling to equitably share water resources.

For years, Iraq has been negotiating with its upstream neighbors to allow more water to flow across its border, but the situation has not improved. In January of 2022, Iraq announced it would sue Iran in the International Court of Justice for cutting its water access, but the case has not progressed. Last July, Iraq asked Turkey to increase the amount of water that flows south into Iraq. Both sides agreed that an Iraqi “technical delegation” would visit Turkey to evaluate water levels behind Turkish dams, but Turkey did not accept responsibility for Iraq’s water shortages. Instead, Turkey’s ambassador to Iraq, Ali Riza Güney, accused Iraqis of “squandering” their water resources and called on the nation to reduce water waste and modernize its irrigation systems.

The new year is expected to bring below-average rainfall to the region, according to the UN’s World Food Programme and the FAO. With worsening climate-change impacts and no foreseeable improvement in water management, the outlook for Iraq’s Mesopotamian Marshes and the communities that rely on them looks bleak.

​A quarter of Iraq's population lives below the poverty line, despite the estimated $100 billion reserves at the Central Bank of Iraq, the largest in the country's modern history, according to bank sources.


Economists and finance experts believed Iraq's problem was not related to its wealth but to lousy management and unfair distribution.


Last week, the Central Bank announced that its foreign cash reserves exceeded $99 billion, an unparalleled record since 1960.


According to the predictions of the Ministry of Planning, the poverty rate in the country has risen to 25 percent, an increase of about three percent from 2019.


The Ministry's spokesman Abdul-Zahra al-Hindawi said the last data of poverty rates stood approximately 22.5 percent in 2019, before the pandemic.


Hindawi added that the high poverty rate is due to several reasons, including the repercussions of the coronavirus pandemic in 2020 and 2021 and the economic crisis that resulted from the drop in oil prices.

Considering the numbers of the Ministry, there are more than ten million poor people in the country, with a total population of 42 million people in 2022.


Early in 2022, the former Minister of Planning, Khaled Battal al-Najm, said the repercussions of the pandemic increased the number of the poor in Iraq, reaching 11.4 million individuals, and the poverty rate rose to 31.7 percent from 20 percent in 2018.


The new predictions did not refer to the regions and governorates with the highest poverty rates.

Previous data showed that half of the population in the southern governorates of Muthanna, Diwaniyah, Dhi Qar, and Maysan were at poverty levels. The ratio was about ten percent in the northern and western governorates.


Financial experts predicted that the ongoing fluctuation in the exchange rate would increase the suffering of low-income families, given the rise in the prices of goods.


The exchange rate went as far as 1,600 dinars per dollar during the week in the local markets, while the official exchange rate stands at 1,446 dinars.

The high poverty rate was often linked to the lack of job opportunities, the high cost of living, and the rise in the price of properties, prompting many low-income families to live in agricultural and state-owned lands, known as "slums."


Experts estimate that the country needs at least two million new housing units to overcome the housing crisis that burdens citizens.


The parliamentary investment committee says the solution lies in building large housing complexes to absorb overpopulation in areas that lack housing units.


The committee said the housing crisis and projects extend to all governorates.


However, experts believe the crisis is solely linked to bad management.


The northern Kurdistan governorates do not suffer from a housing crisis like the central and southern areas.

The United States has imposed sanctions on 15 banks affiliated with the Iranian Revolutionary Guard Corps (IRGC) in Iraq, Report informs, citing the French newspaper Le Figaro.
These banks smuggle over a hundred million dollars of financial resources to Iraq, Syria, Jordan, and other countries every week.
Those 15 banks are under the control of prominent political leaders of Iraq. According to the conclusion of Le Figaro, by boycotting 15 banks, the United States deprived IRGC of one of its important financial sources.
The Central Bank of Iraq sells dollars to private banks every day, and these banks transfer the received dollars to Iran.
According to an expert from Iraq, the banks subject to sanctions are a showcase of the IRGC, which harms their country's national interests and economy through smuggling operations.

ERBIL, Kurdistan Region – Iraq’s development of the Umm Qasr port near Basra is “a threat and a warning” to Iran, a senior Iranian official said Monday as Iraq looks forward to unveiling a larger port next year. 

“The country is planning the development of Umm Qasr with the cooperation of Italy, so that it can compete with Fujairah and Jabal Ali and Iraq can be connected to Turkey, Syria, and the Mediterranean, a route that is parallel to Iran and is actually a threat and a warning to our country,” Javad Hedayati, the irector-general of transit office of Iran Road Maintenance and Transportation Organization, said during a conference. 

Umm Qasr is Iraq’s main seaport and is located approximately 70 kilometers south of the city of Basra. 

Iraq in December announced that it will complete the grand port of Faw nearly a year ahead of schedule, with the port set to be completed by the end of 2024 as opposed to 2025 due to the rapid progression of the project’s building phase. 

The Faw port will be deeper than Qasr and allow larger container ships to dock at its harbor, bringing about greater profit for Iraq. 

In 2021, AFP reported about the rife corruption in Umm Qasr port and said that pro-Iranian armed groups dominate the customs department of the port and supervise the security of the area. ​

Iraq is pushing ahead with plans to build 1,000 schools under an agreement with Chinese companies but the project is delayed by the war in Ukraine, an official has said. 
Chinese firms agreed to construct the schools in Iraq’s 15 governorates under their 2019 oil-for-projects accord which stipulates supplying companies from China with crude oil in exchange for projects they undertake in Iraq. 
The project to build 1,000 schools has achieved “good execution rates” but there are obstacles, said Nazim Hameedi, School Projects Director at the Iraqi Cabinet Secretariat. 
“These obstacles include land allocation and logistics problems…most of these obstacles have been tackled except for funding from the executing companies due to the war in Ukraine…as a result Iraqi firms undertaking such projects for their Chinese  partners are trying to seek domestic loans to complete these projects,” Hameedi told Aliqtisad News. 

ERBIL, Kurdistan Region - Reporters Without Borders (RSF) on Friday said it has recorded the highest death tolls of journalists in Iraq and Syria where a total of about 600 journalists have been killed in the last two decades. 

The RSF said that 1,668 journalists have been killed worldwide since 2003, adding that nearly 600 of them have been killed only in Iraq and Syria. 

“During the past two decades, 80% of the media fatalities have occurred in 15 countries. The two countries with the highest death tolls are Iraq and Syria, with a combined total of 578 journalists killed in the past 20 years, or more than a third of the worldwide total. They are followed by Afghanistan, Yemen and Palestine. Africa has not been spared, with Somalia coming next,” read a press release by the organisation.  

The Committee to Protect Journalists (CPJ) said in November that Iraq and Syria remained among top five countries where killers of journalists continue to be unpunished.  

Syria has been in a civil war for more than a decade. It has been seen as a dangerous place not only for journalists but for activists as well, especially in rebel-held areas in northwestern towns. 

Journalists across Iraq have been targeted since the outbreak of Iraq’s protest movement in October 2019 across central and southern parts of the country.  Scores have been arrested, kidnapped and shot dead since the demonstrations began. Militia groups have been accused of threatening and killing journalists. ​