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iraq invasion
Rebuilding the Iraqi Economy 20 Years After US Invasion
Twenty years after the start of the military operation that led to the fall of Saddam Hussein’s regime, Iraq is still trying to reclaim its status as a major regional economic player.
Nov 07, 2023
Research from Brown University’s Watson Institute estimates the cost of the Iraq war at approximately $2.9 trillion. Although it is harder to estimate the cost to the Iraqi economy—the approximately 300,000 dead civilians and combatants and 3 million internally displaced refugees was a trauma that is difficult to recover from—it is easy to see how much it has been set back by the conflict.
It seems a long time ago now, but back in the 1980s, Iraq was seen as one of the most advanced Arab economies, with some of the best infrastructure and the highest per capita income in the region. With the country so sorely dependent on oil revenues, which still represent around 87% of the government’s budget, the 1980s oil crash hit the Iraqi economy hard; the Iran-Iraq war also cost billions of dollars and hundreds of thousands of lives, and the international sanctions that followed Saddam Hussein’s 1990 invasion of Kuwait sounded the death knell for this period of relative prosperity.
Then, following the 2003 U.S.-led invasion of Iraq, the economy contracted by up to 50% by some measures, due notably to the widely criticized destruction of the Iraqi state apparatus; as flawed and morally bankrupt as it may have been, the Baathist regime provided a measure of stability that no longer existed after the fall of Saddam Hussein, and the chaos of internecine fighting that followed enabled the rise of the Islamic state.
Massive Resources for a Slow Reconstruction
The U.S. invested significantly in the country in the following years, but much of that was in security—with a need to replace the disbanded Baathist security forces—and the rest of the spending in infrastructure was highly inefficient due to corruption and a fractured social order. As a result of all this, per-capita GDP is roughly the same now as it was in 2003. A once-leading regional power had become a basket case.
Given the hardship that the Iraqi population has undergone over the last few decades, one can only be relieved that the authorities are making efforts to modernize the economy, but the road to economic recovery is long and littered with potholes.
Although it is true that Iraq seems finally to be on the mend, its economy remains extremely fragile and largely dependent on oil revenues. Indeed, a recent IMF mission concluded that a drop in oil prices could severely jeopardize the country’s macroeconomic stability and capacity to implement the reforms it needs. As such, it is concerning that OPEC is forcing Iraq to cut its oil production in 2023, which will amputate oil revenue.
The IMF estimates that growth was stagnant in 2022, although real GDP is expected to expand by 3.7% in 2023, but as Moody’s Investors Service said in its latest report on Iraq’s credit fundamentals, “Iraq is heavily exposed to significant carbon transition risks because of its economic, fiscal and external reliance on the hydrocarbon sector.”
The problem is that Iraq also still requires major investment. The new 3-year budget voted this spring allows for some of this; it was certainly crucial to allow the government to continue operating following several years of gridlock with the parliament unable to agree on a budget, and according to Prime Minister Mohammed Al Sudani the budget will enable the government “to start the implementation of the infrastructure projects and turn Iraq into one of the biggest workshops in the region.”
Al Sudani also believes that the budget “prioritizes the essential needs of Iraqi citizens and families, aiming to meet their expectations for government services, construction and infrastructure projects.” But critics disagree: “there is no real investment spending in the budget,” says Sajad Jiyad, an analyst and fellow at the Century Foundation, “it just focuses on expanding what was in previous budgets and leaves very little—a few billion—on investment.”
At any rate, as IMF mission chief Tokhir Mirzoev says, Iraq’s structural imbalances mean that even the government spending that is in the budget, such as it is, “could reignite inflation and foreign exchange market volatility.” Inflation is a chronic issue for Iraq, not helped by the fact that the country has a massive trade deficit: “Iraqi society buys everything from abroad, from agricultural materials to food and medicines, and industrial goods,” said Iraqi Foreign Minister Fuad Hussein in a recent interview with VOA’s Kurdish Service. “If you look at Iraq's trade or its trade balance with other countries, you will see that everything comes from abroad,” he added.
This is one of the subjects that Hussein discussed on his recent visit to Washington. Since the dinar collapsed after the 2003 invasion, many Iraqis chose to use the dollar for their everyday purchases, but the Iraqi Interior Ministry has banned trade in U.S. dollars to prevent runaway inflation. The recent sharp decline of the Iraqi dinar against the dollar is further causing foreign exchange volatility which, according to the IMF, has “adversely affected import-dependent non-oil sectors.” One of the ways that the Iraqi government is trying to fight this is a system for monitoring American dollars that enter the Iraqi economy and tracking when they leave the country, which has the added benefit of preventing the financing of terrorism.
The Central Bank of Iraq in Action
The Central Bank of Iraq’s (CBI) actions seem to be bearing fruit in this respect, with the foreign exchange market stabilizing, helped by the growth of real non-oil GDP, which is expected to reach 3.7% in 2023. Inflation, which peaked at 7% in January 2023, has begun to fall and is forecast to average 5.6% this year.
Meanwhile, in May 2023, the Governor of the CBI, Ali Mohsen al-Allaq, unveiled a new state-owned financial institution, the Social Development Bank (SDB), which aims to promote inclusive economic progress in Iraq. The SDB will "diversify the non-oil economy by fostering small and micro-scale projects, thereby stimulating the private sector and reducing unemployment and poverty rates," said al-Alaq. "The bank will be the first in Iraq to cater to low-income individuals, offering facilitated loans and simple guarantees to support vulnerable groups," he added. The CBI also plans to open a Centre for Finance and Business, which according to al-Alaq, “will host the securities market, the business sector, and financial institutions."
The CBI has also signed an agreement with British banknote manufacturer De La Rue for the production of polymer notes. This decision seems somewhat at odds with the other recent positive initiatives by the Iraqi government to modernize their economy. Indeed, polymer banknotes are far from having proved themselves as a prudent fiduciary choice, and certain countries which had previously rolled out polymer banknotes because they were thought to be more robust, have backtracked because the notes started to show signs of wear and tear much more rapidly than originally thought. With a shorter-than-expected lifespan, it becomes harder to amortize the extra initial cost of polymer banknotes and the anticipated savings are not forthcoming.
Many of the central banks around the world who have made the transition to polymer banknotes also cite their greater security, but again, polymer banknotes add little in this respect; modern printing techniques mean that paper banknotes, like the Euro notes, which are made of cotton fiber, boast numerous cutting-edge security features like raised ink, security threads, and holograms. In fact, because some of these security features are woven into the actual fabric of the paper, modern paper banknotes may even be harder to counterfeit than polymer banknotes, on which security features are simply added to the substrate. It is easier for counterfeiters to obtain polymer material and try to imitate the security features that are printed on the surface of banknotes than to accurately reproduce the embedded threads, for example, that are used in banknotes like the new Euro series. According to the European Central Bank, the number of counterfeit Euro banknotes withdrawn from circulation reached a record low in 2021, and indeed, one of the largest counterfeiting operations shut down in recent memory was for polymer banknotes in Romania. Likewise, it is worth noting that the U.S. dollar—the world's principal reserve currency and the most widely used currency in the world—is still printed on paper. The U.S. dollar is subject to a high degree of regulation and oversight, so if the Federal Reserve is not considering switching to polymer banknotes, the consensus must be that paper provides strong enough protection against counterfeiting.
Given the hardship that the Iraqi population has undergone over the last few decades, one can only be relieved that the authorities are making efforts to modernize the economy, but the road to economic recovery is long and littered with potholes; to maintain credibility in Iraq’s fiscal policy, the government should continue to focus on more productive measures, rather than falling prey to fads that do nothing to promote actual economic stability.
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Twenty Years After George W. Bush's Infamous 'Mission Accomplished' Claim
The disgraced former president's rhetorical victory lap that came before protracted bloodshed deserves all of its notoriety 20 years later.
May 01, 2023
Twenty years ago, President George W. Bush landed in a twin-engine Navy jet on an aircraft carrier, strode across the deck in a bulky flight suit and proceeded to give a televised victory speech under a huge red-white-and-blue banner announcing “Mission Accomplished.” For Bush, the optics on May 1, 2003 could hardly have been more triumphant. From the USS Abraham Lincoln, he delivered a stirring coda, proclaiming that “major combat operations in Iraq have ended” just six weeks after the United States led the invasion of that country.
But Bush’s jubilant claim unraveled as combat escalated between Iraqi insurgents and occupying forces. During the next nine years, the official death toll among U.S. troops went from under 200 to more than 4,400, while the deaths of Iraqi people surged into the hundreds of thousands. The physical wounds were even more numerous, the emotional injuries incalculable.
The “Mission Accomplished” banner and Bush’s speech going with it have become notorious. But focusing only on his faulty claim that the war was over ignores other key untruths in the oratory.
“We have fought for the cause of liberty,” Bush declared. He did not mention the cause of oil.
By dodging inconvenient truths about the impacts of U.S. warfare on “the innocent,” Bush was reasserting the usual pretenses of presidents who elide the actual human toll of their wars while predicting successful outcomes.
A few months before the invasion, a soft-spoken Iraqi man who was my driver in Baghdad waited until we were alone at a picnic table in a park before saying that he wished Iraq had no oil—because then there would be no reason to fear an invasion. Years later, some U.S. authorities were candid about Iraq’s massive oil reserves as an incentive for the war.
“I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil,” former Federal Reserve chairman Alan Greenspan wrote in his 2007 memoir. That same year, a former head of the U.S. Central Command in Iraq, Gen. John Abizaid, had this to say: “Of course it’s about oil, we can’t really deny that.” And Sen. Chuck Hagel, who later became Defense Secretary, commented: “People say we’re not fighting for oil. Of course we are.”
While touting the war effort as entirely noble, Bush’s “mission accomplished” speech credited the Pentagon’s “new tactics and precision weapons” for avoiding “violence against civilians.” The president added that “it is a great moral advance when the guilty have far more to fear from war than the innocent.”
Such soothing words masked brutal realities. Civilian deaths accounted for 40 percent of “people killed directly in the violence of the U.S. post-9/11 wars,” according to the Costs of War project at Brown University. In fact, a large majority of the casualties of those wars have been civilians. “Several times as many more have been killed as a reverberating effect of the wars—because, for example, of water loss, sewage and other infrastructural issues, and war-related disease.”
By dodging inconvenient truths about the impacts of U.S. warfare on “the innocent,” Bush was reasserting the usual pretenses of presidents who elide the actual human toll of their wars while predicting successful outcomes.
On May 1, 2012, exactly nine years after Bush’s speech on the aircraft carrier, President Barack Obama spoke to the American people from Bagram Air Base north of Kabul. With U.S. troop levels in Afghanistan near a peak of 100,000, Obama expressed confidence that “we will complete our mission and end the war in Afghanistan.”
Both Bush and Obama would later be widely faulted for voicing undue optimism about fulfilling a war’s “mission.” But the critiques have rarely devoted much attention to scrutinizing the assumptions that propelled support for the missions.
The U.S. government’s inherent prerogative to intervene militarily in other countries has seldom been directly challenged in America’s mainstream media and official discourse. Instead, debates have routinely revolved around whether, where, when, and how intervention is prudent and likely to prevail.
But we might want to ask ourselves: What if Bush had been correct in May 2003—and U.S. forces really were at the end of major combat operations in Iraq? What if Obama had been correct in May 2012—and U.S. forces were able to “complete our mission” in Afghanistan? In each case, conventional wisdom would have gauged success in terms of military victory rather than such matters as adherence to international law or regard for human life.
Today, it's a wonder to behold the fully justified denunciations of Russia’s horrific invasion of Ukraine from some of the same U.S. government leaders who avidly supported the horrific invasion of Iraq. The concept that might makes right doesn’t sound good, but in practice it has repeatedly been the basis of U.S. policy. Wayne Morse, the senator from Oregon who opposed the Vietnam War from the outset, was cogent when he said: “I don’t know why we think, just because we’re mighty, that we have the right to try to substitute might for right.”
George W. Bush’s performance with the “Mission Accomplished” banner—a rhetorical victory lap that came before protracted bloodshed—deserves all of its notoriety 20 years later. His claims of success for the Iraq war mission are now easy grounds for derision. But the more difficult truths to plow through have to do with why the mission should never have been attempted in the first place.
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Russian War Crimes in Ukraine 20 Years After US Criminal Invasion of Iraq
How can there be real accountability for war crimes when international law is replaced by an undefined "rules-based order"?
Mar 23, 2023
This week marked the 20th anniversary of the U.S. invasion and occupation of Iraq. The war left at least 800,000 to 1.1 million Iraqis dead, and certainly many more injured, maimed, and permanently displaced.
The invasion and subsequent military occupation destroyed Iraq's once-modern infrastructure and much of its environment while shredding the country's social fabric. The war gave rise to religious and ethnic divides, created unfathomable levels of corruption, left a legacy of sectarian militias and terrorist organizations including ISIS. War crimes by the U.S. military and private contractors, even beyond the initial crime of aggression, exploded from Abu Ghraib to Fallujah to Nisour Square and beyond.
This week the International Criminal Court in The Hague announced its war crimes indictment of the president of the country whose troops had invaded and occupied another country, and committed horrific war crimes. While we continue to call for an immediate ceasefire and negotiations to end the war in Ukraine, we know that justice for war crimes—in all wars—remains an urgent necessity. The indictment of President Vladimir Putin is appropriate as the invasion of Ukraine was illegal and Russia's ongoing assault and occupation of Ukrainian territory is a clear violation of international humanitarian law. U.S. war criminals are missing from the same dock.
Accountability doesn't happen on its own, it must be fought for—in all cases, including that of the United States.
So it is also true that the president, as well as the vice-president, the secretary of defense (now dead), and many more high-ranking officials of the United States should have been—and still should be—indicted for war crimes. The invasion of Iraq was, like Ukraine, illegal. The U.S. occupation was a violation of international humanitarian law. And U.S. troops committed horrific and well-documented war crimes.
Moscow's clearly illegal Ukraine war is condemned by the United States primarily as a violation of Washington's self-defined "rules-based order." Accountability is demanded, and the United States even grants the ICC, albeit grudgingly, some level of legitimacy to impose accountability on Putin and other Russian officials. We have witnessed the possibility of Putin being held to account by the Court greeted with cheers in Washington and in the media across the United States.
President Biden and other officials are among those cheering Putin's indictment, despite the longstanding U.S. refusal to provide intelligence or other assistance to the ICC regarding war crimes in Ukraine or elsewhere. Indeed they recognize supporting the ICC would set a precedent for ICC jurisdiction over U.S. troops and political leaders responsible for Iraq and other war crimes in so many places in the world—an accountability long rejected in Washington.
War Crime Charges for Them, But Never for Us
It's not new for Washington to claim to support the ICC in principle even while refusing to actually recognize its jurisdiction. The United States was among the seven outlier countries—joining Israel, China, Iraq, Libya, Qatar and Yemen—that voted against the Rome Treaty which established the International Criminal Court in 1998.
Russia signed the Treaty in 2000, but withdrew its signature in 2016, two years after its intervention in Ukraine and annexation of Crimea. Washington, finally, also signed on in 2000 but never ratified the Treaty, and withdrew its signature even before Russia did. In 2002 then-President George W. Bush, already mobilizing for his illegal war in Iraq, instructed his UN ambassador John Bolton to "unsign" the treaty. Three years later Bush signed what became known as the "Invade The Hague" Act, authorizing the U.S. military to use whatever force necessary to free any U.S. citizen ever arrested by the International Criminal Court.
The indictment of President Vladimir Putin is appropriate as the invasion of Ukraine was illegal and Russia's ongoing assault and occupation of Ukrainian territory is a clear violation of international humanitarian law. U.S. war criminals are missing from the same dock.
This kind of victor's justice—a longstanding component of American exceptionalism—is an old story in U.S. politics and historiography since World War II. But it has become less hidden and more explicit in the last two decades as the Global War on Terror reshaped so much of the world. In even more recent years, the elusive "rules-based order" has replaced international law as the basis (albeit aspirational, if nothing else) of global legitimacy for Washington. And some of that shift goes back to the war in Iraq.
What waging an illegal war necessitates
In 2002 and early 2003, as the United States and its British backers prepared to invade Iraq based on lies about non-existent weapons of mass destruction, imaginary links between al Qaeda and Iraq's government, claims of bringing "democracy" to Iraq and more, they pushed for a UN Security Council resolution that would explicitly authorize their war. Earlier resolutions threatening Iraq were not passed under Chapter VII of the UN Charter, a prerequisite for legalizing an act of war. At the time, 11 of the 15 UNSC members refused to pass a second resolution. Without Council authority, the U.S. and UK launched their war in clear violation of international law. The UN's then-Secretary General Kofi Annan would eventually acknowledge that the war was illegal.
But that finding was based on actual international law—the treaties, conventions, and covenants that were written, agreed to, signed, and ratified by governments committed to upholding their terms. Those included the UN Charter, the Geneva and Hague Conventions, prohibitions on producing or using specific kinds of weapons (now finally including nuclear weapons), and much more. The U.S. war in Iraq was illegal because the invasion violated Articles 39 and 51 of the UN Charter; the use of white phosphorous as a weapon violated the Chemical Weapons Convention; the torture of prisoners at Abu Ghraib and elsewhere and a host of other military actions all violated many of the Geneva Conventions; and more. When U.S. officials and pundits accuse other governments of rejecting the never-defined, never written-down, never agreed-to "rules-based order," there is no identifiable law or rule being referenced, it is simply a statement that the U.S. doesn't like the way another government operates.
The "rules-based order" of the 21st century is the order defined and imposed by the United States and its closest allies.
Washington's clearly illegal Iraq war didn't violate some amorphous "rules-based order." It violated long-established and specific principles of international law. The war's violations of actual international law were widely known and discussed but largely ignored by officials and mainstream media, and U.S. accountability for war crimes has never been on the table. No U.S. officials have been held accountable for their crimes, no U.S. reparations for the massive destruction the war wrought on Iraq and Iraqis have been offered, and no apologies have been made.
The "rules-based order" of the 21st century is the order defined and imposed by the United States and its closest allies.
The comparison here is not a case of "what-about-ism" aimed at protecting Russia. There is little doubt that Russia has committed war crimes in Ukraine and there should be accountability for those crimes. It is also undoubtedly true that authoritarian and aggressive leaders around the world have relied on the impunity enjoyed by George W. Bush, Dick Cheney, Donald Rumsfeld, and others responsible for U.S. war crimes in Iraq, as a green light for their own crimes. If U.S. war criminals had been held to serious account, it is likely that some of the other militaristic authoritarians around the world, perhaps including Vladimir Putin, might have held back from some of their illegal actions.
Right now most countries around the world, including those critical of U.S./NATO provocations of Russia over the last decades, are critical of Russia's invasion of Ukraine. Most European and other U.S. allies, some for their own reasons, others under U.S. pressure, toe the U.S./NATO line. But many other governments, while appropriately refusing to support Washington's sanctions and dangerous escalation of this terrible war, are reluctant even to denounce the Russian invasion, because they resent U.S. hypocrisy and double standards. Accountability doesn't happen on its own, it must be fought for—in all cases, including that of the United States.
The refusal of sequential U.S. governments to hold their predecessors accountable for war crimes in Iraq, indeed their continuation of many of those criminal actions, has had serious consequences for Iraq and for the world. The best way to help the people of Ukraine and the people of Iraq is to hold the United States accountable for its crimes too.
This piece was co-published with Foreign Policy In Focus.
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