Last week another conference dedicated to the reconstruction of Iraq took place. Between 2004 and 2009 an annual meeting of diplomats and international agencies would be staged where pledges to help rebuild Iraq were made and statements of support were heard. And while some areas of the country were reconstructed after the 2003 war, key sectors like electricity, health and agriculture remained in dire straits. Moreover, the societal and political aspect to reconstruction was almost always ignored during those years. Last week's conference in Kuwait was different, in that it moved from being a pledging event to a strategic meeting on how to rebuild Iraq. Private sector representatives joined ministers from key countries with a stake in strengthening Iraq. And the requirement was mainly for investment and credit lines to encourage the private sector to develop commerce rather than continuing the cycle of handouts, both promised and actual.
Some media coverage of the conference was quite critical, pointing out that the money pledged - $30 billion in credit lines, loans and investments - was far below the $88bn that is required. But there is a counter argument. Firstly, the higher figure was meant to be for a five-year period of reconstruction. Secondly, none of those working on the reconstruction effort expected the entire sum to be raised in Kuwait. Third, the Gulf countries were at the forefront of those committing to Iraq, solidifying the decision last year for Iraq’s Arab neighbours to open up to Baghdad. With $500 million in aid and $5.5 billion in investments, the UAE confirmed that commitment. The Kuwait International Conference for the Reconstruction of Iraq took place 15 years after the war that brought down Saddam Hussein and 27 years after the liberation of Kuwait from Saddam’s invasion. The fact that Kuwait hosted the conference – and put up $2 billion in credit and investment – should not be underestimated either. It was clearly a moment to reaffirm Sheikh Sabah’s position of supporting Iraq and for the Emir of Kuwait to turn the page on the troubled relations between the two countries. In contrast, Iran did not make any financial pledges and attended only half of the event.
Investment instead of aid brings mixed reactions, but having a long-term stake in Iraq promises better and prolonged engagement and interest in the country. Yet the reality is that certain needs in Iraq can’t be met with investment as there really isn’t a rate of return to be counted on. Schools, sanitation and basic health care are all needed in areas devastated by ISIL. And yet, infrastructure projects could be undertaken by companies, backed up by the World Bank or external donors. The aim should be to have a variety of approaches and partners to get the rebuilding effort underway.
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But credit lines and governmental commitments are not enough. For the plan to spur private sector growth to work, corruption must be weeded out. Iraq ranks 166th in Transparency International's Corruption Perception Index, only ten places above North Korea in last place. However, there are some positive indicators. Iraq's position has risen a little the last few years in the corruption index, and the Prime Minister Haider Al Abadi has made weeding out corruption a priority for his government. In the World Bank's measurement of "ease of doing business", Iraq ranks 168 out of 190. While ease of doing business and cutting red tape is vital, corruption is the real issue as well as ensuring a proper system of divestment is allowed, when a project does not work out.
Time is a critical factor here. As long as areas liberated from ISIL remain in ruins, Iraq’s ability to rise up as an entire country will remain hindered. Worse still, a new generation of Iraqis may grow up feeling disenfranchised and susceptible to manipulation. Swift action is crucial. Even more significant are programmes aimed at rebuilding societies and providing opportunities. Unesco’s plan to "revive the spirit of Mosul" announced last week is an encouraging example: "Reconstruction will succeed and Iraq will regain its influence only if the human dimension is given priority; education and culture are the key elements. They are forces of unity and reconciliation," Audrey Azoulay, Director General of Unesco, said.
She also added that "Mosul is the living symbol of Iraqis' pluralistic identity". It was where ISIL declared its false caliphate and where the militant group was defeated. Getting Mosul right is vital to getting Iraq's reconstruction right – and that is the investment in society and the ties that bind Iraqis together.
