Print Friendly, PDF & Email

Insights into Editorial: Iraq’s autumn of discontent

Insights into Editorial: Iraq’s autumn of discontent

Political_Instability_ and_insecurity


Iraq has endured four decades of near ceaseless depredations with three ‘Mother of All Battles’, economic sanctions, occupation, and existential duels with al Qaeda and the Islamic State (IS).

Recently, it has been crippled by agitations led by youth railing against an inapt and corrupt leadership. They are frustrated because of unemployment, decaying civic amenities, and foreign domination.

Iraq remains a largely cash-based society and instability has delayed the development of its banking system, which remains underdeveloped due to a lack of competitiveness and the dominance of state-owned banks that are undercapitalised, illiquid and burdened by underperforming assets.

On December 1, the Iraqi Parliament accepted the resignation of the Prime Minister throwing the country into a fresh bout of political instability.

Political instability weighs on Iraq’s economic recovery:

Iraq’s road to economic recovery is being further hampered by the political instability that has rocked the country for the past two months, as well as a lack of institutional capacity, according to a report by the Institute of International Finance.

According to the World Bank’s estimates, Iraq’s war damages stand at around $46 billion (Dh169bn), while rebuilding the country would require $23 billion for short-term reconstruction, and an additional $65bn over a subsequent five-year horizon, totalling $88bn.

Continuous domestic political instability and possible elections without clear winners could lead to significant delays in reconstruction and a power vacuum leaving space for a resurgence of militant forces.

Second, further deterioration of the fiscal position may crowd out private sector credit and push public debt to unsustainable levels

India-Iraq historical Ties:

India and Iraq have historical and civilizational ties. Iraqi port of Basra was not only the market par excellence of the Indian merchandise including textiles, spices, food-grains and other commodities for the Arab world but also of the famous pearl trade that flourished mainly through the Indian traders and jewellers.

Indian soldiers and railway workers from British India had played major role in ensuring the security in this region during the colonial era and have left an imprint in the region that many Iraqis still proudly claim their Indian ethnic descent.

India and Iraq have even shared agricultural practices.

India’s role in Iraq developmental works:

For Indians, the developments in Iraq may appear as a distant rumble. They are not.

One, Iraq is India’s largest source of crude. A protracted instability in Iraq would result in oil price rise.

Two, with direct bilateral trade of over $24 billion in 2018-19, Iraq is already a large market for India’s exports with sizeable potential for growth.

Three, in the 1975-85 decade, Iraq was the biggest market for India’s project exports; its post-conflict reconstruction requirement would be huge.

Additionally, India can also help Iraq in MSMEs, skill development, healthcare, education, and improved governance.

But before all this can happen, India would need to help Iraq avoid the worst-case scenario.

For this, it needs to hold Iraq’s hand to foster political reforms and help create credible and effective socio-political institutions.

Iraq urges Indian companies to participate in energy and infra projects:

Being one of the largest oil and LNG importer, India is looking at other countries to fulfil its demands.

Minister of Petroleum and Natural Gas visiting Iraq to explore possibilities for increasing imports from that country.

Fear of political unrest and lack of direct sea route, Indian businesses have kept away from Iraq since 2002.

Saudi Arabia which has been India’s top oil source was for the first time dethroned by Iraq in 2017-18 fiscal year in supplying crude to India.

Capacity building:

The academic linkages in the medical and engineering fields have throughout been vibrant.

In terms of capacity building, India has annually been providing assistance to Iraq under the Indian Technical and Economic Cooperation (ITEC) programme to train officials of the Government of Iraq.

For the year 2017-18, a total of 175 slots have been allotted under ITEC programme. In addition, India has been offering opportunity to Iraqi students for higher studies in India under ‘General Scholarship Scheme’ (GSS) organized by the Indian Council of Cultural Relations (ICCR).

The Indian Oil Corporation Limited (IOC) has provided training to the Iraqi oil officials in India in various subjects related to downstream oil sector.


According to experts, India imports almost 80 percent crude to meet its growing needs from various countries across the globe including the United States and Russia.

West Asia region is also of critical importance to India as it buys its crude from countries including Saudi Arabia, Kuwait, and Iraq.

However due to political uncertainty related to Iran and Saudi Arabia, India has started exploring options in other countries.

Over the past 70 years, India has created such institutions suited for a multi-ethnic developing society. This makes it compatible to partner with Iraq.

India’s millennia-long civilisational ties with Mesopotamia give it a tradition of goodwill with all sections of Iraqi society.

This legacy needs to be leveraged not only to help transform Iraq, but also revitalise India’s bilateral ties with this friendly country in the extended neighbourhood.