The EU at the Receiving end of Iraqi Corruption

The EU at the Receiving end of Iraqi Corruption

Whoever believes that corruption in far-flung regions like Iraqi Kurdistan is not a problem for Europe should take a look at the events that have been unfolding on the Polish-Belarusian border. As it turns out, many of those who are there awaiting the things to come are Iraqi Kurds – thousands of testaments to the disillusionment about the politics and corruption in the region, as well as an illustration of how far-reaching the problem really is, driven countless people to leave their country in droves.

Indeed, the entire country of Iraq is only just now making gradual improvements from the economic quagmire that has engulfed it the last two decades, with Covid-19, oil price uncertainty – and corruption – threatening to derail that progress at any moment. The Kurdistan region exemplifies this fragile veneer of stability like perhaps no other region of Iraq: the iron stranglehold wielded over the territory by two powerful clans, the Barzanis and the Talabanis, is at the core of Kurdistan’s systemic corruption and as long as the duopoly persists, the exodus will surely continue.

Iraq’s perennial plague

Iraq is a country in dire straits at the present time. Though the World Bank reported a 21% growth in non-oil revenues in the first half of this year, that came in the wake of an 11% contraction in the economy in 2020. Modest growth of 3% is forecast for the two years ahead, though even that progress is contingent on a number of external factors, including new strains of the coronavirus, the volatile oil and gas industry, climate change and the fragile security situation in the Middle East.

Of course, those macroeconomic factors are worrying, but the political situation in the country is perhaps an even greater concern. The previous government was ousted over the spiraling unemployment situation, while polls held in October to elect its successor were poorly attended and do not inspire hope that meaningful change will occur. In a nation where skimming for profits is routine –  some $20 billion have been funneled out of Iraq via a quite outrageous “dollar auction” scheme, according to an exposé featuring an interview with one of the “whales” who benefits from it –  it’s almost unsurprising that a prominent member of Iraq’s anti-corruption committee has previously admitted taking a $5 million bribe himself.

Inside the microcosm

Although the Kurdish part of Iraq has often been held up as an example of relative calm amidst the storm, a closer look at the politics of the region reveals that it too is plagued by problems. The territory has been effectively carved up by two ruling families. The Barzanis, who are the puppet masters of the majority Kurdistan Democratic Party (KDP), have systematically dismantled the democratic principles of the region, as well as increasing authoritarianism and facilitating widespread corruption.

While this state of affairs has the biggest impact on everyday Kurds, overseas interests have also been adversely affected in the past. A prominent case in point is the role of family patriarch Sirwan Barzani in the Korek affair, which is an ongoing court case involving the Iraqi telecommunications industry. In the wake of Saddam Hussein’s toppled regime, FDI into Kurdistan snowballed as Kuwaiti logistics company Agility and French telecommunications provider Orange poured $810 million for a 44% stake into Iraq’s Korek Telecoms.

However, just weeks before the two investors could trigger a clause allowing them to take full control of Korek, the national Communications and Media Commission (CMC) annulled the deal over flimsy accusations and expropriated their stake back to Korek. Allegedly, Barzani pulled the strings in the background, funneling Korek funds to corrupt regulators, including the purchase of an £830,000 London townhouse for the CEO of the CMC, and use them to sideline Agility and Orange. The two wronged parties have since filed lawsuits and arbitration cases at the International Centre for Settlement of Investment Disputes against (ICSID) Korek and the Iraqi state.

One household, alike in indignity

While a final ruling on the Korek affair is still pending in the courts, the other major family clan is barely more credible as a democratic entity. The Patriotic Union of Kurdistan (PUK) was originally established by Jalal Talabani in 1997 as a direct response to the Barzani’s creeping supremacy, but they have quickly morphed into an organization just as involved in political chicanery and nepotism as those they initially decried. All of the top positions in the party are filled by those named Talabani or associates of the family.

The relative stability of the region came under further threat this year, when a Talabani uncle and nephew began butting heads over power and money in an intra-family fight. The former, Lahur, eventually stepped aside, claiming the dispute was “not worth shedding blood” over, while the latter, Bafel, is now free to lead the party in cooperation with his brother Qubad, who is currently deputy prime minister in the Kurdish government. They may possibly be more to the fallout than meets the eye, with Turkey and Iran potentially implicated in the situation, even as accusations of smuggling, extortion and spying abound on both sides.

Inauspicious future ahead

It is under this confused and convoluted political system that Iraqi Kurds now find themselves, with poverty and unemployment prominent threats to their very survival – and at the EU’s border. That poses a dilemma for Brussels, because its surprisingly hard stance against the migrations is clashing with its liberal human rights rhetoric. The EU recently added to this discrepancy by curtailing some migrant rights, enabling border countries “to hold people in special asylum processing centres for up to 16 weeks, up from the current maximum of four.”

The result is a growing rift within the Western and Eastern states of the EU, pushing European unity to a limit as the wealthier countries are offloading the responsibility to deal with the migrants to the likes of Poland and the Baltics. Caught in between these intra-European struggles are the Iraqi Kurds. Now, those intent on emigration are still refusing the Iraqi government’s offer of a flight home – a path towards a new life within the EU might be one that is opaque and fraught with peril, but the future they left behind at home remains dispiritingly distinct.

Image credit: European Parliament/Flickr

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