Iraq is an important force in regional and global affairs. Oil resources, a willingness to be aggressive against its neighbors, and defiance against international efforts to restrict its actions have led to this prominence. Saddam Hussein was central to Iraq's international position for the past thirty years, yet longstanding economic, political, social and international patterns persist despite his removal. Western contact perpetuates centuries old behaviors where internal realities are ignored in an effort to achieve the agenda of the elite. Economics, religion and politics intersect and propel events to the point where they often seem beyond anyone's ability to affect them.


The central challenge to Iraq's government is its centuries old ethnic and religious animosities (Figure 4a). Under Saddam Hussein, Sunni Kurds and Shiites Arabs, approximately 80 percent of the population, suffered at the hands of the Sunni Arab elite. Kurds have ruled their northern region with virtual autonomy since 1991 and do not want to lose power. Since the US overthrew Hussein in 2003, there is concern about the most effective way to promote democracy, redress past imbalances, and safeguard all Iraqis. Shiites want the political power they believe their demographic weight affords them, the Kurds want greater political power or autonomy, and the Sunnis fear they will be left to the mercy of both.

Many have questioned the impartiality of the new Interior Ministry as recent investigations have revealed that Shiites within the Ministry are part of the death squads that attack Sunni Muslims. Any hope for democracy is hurt when the majority group, the Shiites, seems to ignore the rights and safety of the minority groups. A February 22, 2006 bombing of the Shiite Askariya Shrine in Samarra has led to retaliatory bombings of Sunni mosques, continued killings on both sides and the fear of imminent civil war.

There are divisions within the Shiite world itself. Each of the three major Shiite factions has its own militia. As is often the case, when a group is denied political power, religious leaders come to the forefront to lead. This has certainly been the case in the Shiite world in Iraq, and Shiite clerics are viewed as protectors of their followers, hence the development of militias independent of official Iraqi forces. One group is lead by Moktada al-Sadr whose anti-American position has garnered him much support. His main rival is Abdul Aziz al-Hakim, leader of the Supreme Council for the Islamic Revolution in Iraq. Al-Hakim encouraged retaliation for the bombing in Samarra and his anti-American position appeals to his followers. Most importantly, the United States has aligned itself with secular Iraqis who do not influence many of the Iraqi people, especially in times of hardship and violence. The Sunni Muslims, who have always had access to political power, do not have the same religious leadership that can influence and incite their followers.


Iraq's military actions under Saddam Hussein had an enormous impact on its economy. Although the hostilities that resulted from Iraq's 1990 invasion of Kuwait were relatively short-lived, the economic repercussions were long lasting (Figure 4c). The United Nations imposed economic sanctions and limited Iraq's financial recovery. These sanctions, which included an embargo on Iraqi oil, were intended to force Iraq to pay war reparations and destroy its nuclear, chemical, and biological weapons. The combined effect of all these factors was the destruction of Iraq's basic infrastructure: roads, bridges, and power lines. With the trade embargo in place, Iraq virtually ceased earning income from its exports.

In 1996, a UN agreement allowed Iraq to export oil for the first time since 1990; the UN permitted Iraq to export oil worth $2 billion every six months in order to purchase food and medicine for its civilian population. This reprieve did not solve the fundamental problems of a devastated economy and of a population impoverished by two successive wars and a decade of severe economic sanctions. Iraq's official foreign reserves (estimated at $35 billion to $40 billion at the beginning of the 1980s) were totally drained, either spent to finance the war with Iran or misallocated on projects such as building dozens of luxury palaces for Hussein and his family. Iraq was also troubled by foreign debt, war reparations, and other financial obligations. The UN adjustment did not help because Iraq could not pump the necessary amount of oil for a variety of reasons, including damage to equipment and loss of skilled workers. Consequently, in 1996 Iraq exported oil worth only $400 million and imported food and medicine worth $492 million. Before 2002, oil production was about 70% of what it was in the 1970s. The implementation of the economic sanctions also reflected the ambivalence of other nations towards Iraq. While foreign leaders wanted to punish Hussein, they also relied on Iraq's oil reserves over which Saddam Hussein had complete control. Foreign leaders frequently ignored Hussein's noncompliance and strong evidence of smuggling. (1)

The military victory of the US-led coalition in March and April of 2003 resulted in the decline of much of the central economic administrative structure in Iraq. Although a comparatively small amount of the physical plant was damaged during the hostilities, looting, insurgent attacks, and sabotage have undermined efforts to rebuild the economy. Attacks on key economic facilities, especially oil pipelines and infrastructure, have prevented Iraq from reaching projected export volumes, but total government revenues have been higher than anticipated due to high oil prices (Figure 5b).

A dramatic change since the overthrow of Hussein has been Iraq's return to a market economy. The US has supported the privatization of all state-owned enterprises, with the exception of the oil industry. The Americans have also encouraged foreign investment, allowing international investors to own Iraqi businesses completely. Profits and dividends may be withdrawn without any reinvestment in Iraq. The orders also allowed foreign investors to withdraw all of their profits and dividends without reinvestment in Iraq. The banking sector has also been privatized, and foreign banks are allowed to own up to 50 percent of Iraqi banks.

Despite the vast amount of money spent on rebuilding efforts, the Iraqi economy is still not doing as well as it needs to in order to overcome political unrest. As James Glanz recently reported in The New York Times, oil, electricity, water and sewage industries are all functioning below 2003 levels. Despite the billions of foreign dollars designated for rebuilding projects, the largest problem seems to be security as the insurgents frequently target infrastructure to derail the political process. citation: James Glanz, "Iraq Utilities Are Falling Short of Prewar Performance," The New York Times, February 9, 2006.

(1) www.msn.encarta:Iraq: Economy: Iraqi Economy Under Hussein
www.msn.encarta:Iraq: Economy: Government Role in the Economy


Two primary issues affect Iraqi politics: process and content. Regarding the former, the question is how will Iraq be governed. As to the second, which decisions will work given the divisions of ethnicity, religion and class? Iraq held its first free election in January 2005 to elect a 275-member National Assembly. About 8.5 million people voted, representing about 58 percent of eligible Iraqis. A coalition of Shiites received 48 percent of the vote and the Kurdish parties received 26 percent. Sunni parties received just 2 percent. Most Sunni leaders, feeling marginalized, had called for a boycott. In August 2005, after three months of fractious negotiations, Iraqi lawmakers completed a draft constitution that was voted on in a national referendum on October 15, 2005. Shiites and Kurds supported a decentralized government with autonomous regions in the Kurdish north and the Shiite south; the minority Sunnis wanted strong centralization, fearing that they would otherwise be deprived of the oil wealth of the north and south. That issue, as well as the role of Islam - some Shiites have advocated a theocratic government and the reduction of women's rights - remained unresolved in the final draft. In the end, the Sunnis' objections were overridden, and they in turn vowed to defeat the constitution at the referendum stage. (2)

On October 25, 2005 the referendum for the new constitution narrowly passed, with a large Sunni turnout voting against it. Voters in provinces largely populated by Shias and Kurds, who represent 80 percent of Iraq's population, overwhelmingly approved the constitution (Figure 4b).

The electoral laws permitted a rejection of the constitution if two-thirds of voters in three provinces voted against it. Voters in two Sunni-dominated provinces voted no by margins of more than two-thirds, but in a third Sunni-majority province, Nineveh, only 55 percent voted against, failing to reach the two-thirds majority required for rejection. The adoption of the constitution paved the way for elections to Iraq's new parliament in December, 2005.

The December 2005 vote returned a Parliament with the following representation:

United Iraqi Alliance (alliance of main Shiite parties): 128 seats

Kurdistan Alliance (alliance of main Kurdish parties): 53 seats

Iraqi Consensus Front (alliance of main Sunni parties): 44 seats

Iraqi List (alliance of main secular parties): 25 seats (3)

On February 12, 2006, Shiite lawmakers decided by a one vote margin to retain Ibrahim al-Jaafari as Prime Minister in Iraq's next government. As the largest single block in the new parliament, Shiites have the right to choose the prime minister under their new constitution. Many consider Jaafari weak and he only regained the lead after he gained support from the followers of Moktada al-Sadr, a renegade Shiite cleric who is hostile to the United States. Sadr's followers control 32 votes and constitute the largest bloc within the Shiite alliance. The terms of his support are unknown but his retention represents a confirmation of Sadr's power, although in recent weeks, many have called for him to step down.

(2) www.msn.encarta:Iraq: History: Post-Hussein Iraq: Transition to Civilian Rule
(3) "Votes in Iraq Show Shiites and Kurds Falling Short." The New York Times. January 21, 2006.
www.msn.encarta:Iraq: History: Post-Hussein Iraq: Transition to Civilian Rule


Many questions remain. Concerns over security, fear of civil war, the ability of Iraqis to run their own affairs, rebuilding efforts, rights and protection of minorities, the role of religion in government, beneficiaries of the nation's oil wealth, the continued US presence, religious fundamentalism: all of these issues are unresolved (Figure 3). When and will the US leave? As it has happened so many times throughout Iraq's history, foreign powers have economic interests to protect, and whether these have been admitted in the basic terms of realpolitik or couched in the ideals of democracy, the people of Iraq are the ones who bear the repercussions.


1. What does democracy mean for Iraqis?

2. What obstacles to peace exist in Iraq?

3. Saddam Hussein kept conflicts among disparate groups limited. How has his removal and the presence of these conflicts affected the onset of democracy?

4. Are Iraqis better off now than they were under Saddam Hussein? The British? The Ottomans?

5. Is the US simply one more in a series of foreign rulers who do not fully understand the complex realities of Iraq?

6. What fuels the insurgents?

7. What enables groups with disparate interests to unite?

Norman B. Leventhal Map Center (