Iraqi election highlights Basra corruption

Prime Minster blames 'mafia' for stifling development in oil-rich southern city

A banner calling voters to boycott the parliamentary elections in Iraq hangs in a neighbourhood in the southern city of Basra on May 8, 2018 as residents feel they are neglected by the federal government. Haider Mohammed Ali / AFPShow less

Complete with coffee shops, perfumeries and pizza parlours, the gleaming atrium of Basra's Times Square Mall are a glimpse of how a peaceful Iraq may one day look.

Inside its air-conditioned precincts, locals escape not just the port city's oppressive heat but many other drawbacks of modern Iraqi life.

Women wander round without headscarves, free from the gaze of disapproving militias, while the mall's cinema offers the latest Hollywood releases. Ten years ago, the only public entertainment permitted in Basra was stern religious plays.

Yet the mall, which opened two years ago, is also remarkable because it is the only one of its kind. Elsewhere, a city that should by now be an Iraqi Dubai is in much the same decrepit state as it was when British troops invaded in 2003.

Its famous canals are clogged with litter, electricity runs for just a few hours a day, and many poorer Basrans still live in crumbling Saddam-era public housing estates.

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Outside the mall, meanwhile, the smell on the air is not usually fresh pizza or coffee, but an equally fresh smell of sewage – the result of long-unsolved sanitation problems that also make Basra's salty tap water all but undrinkable.

Ahead of this Saturday's elections, Haider Al Abadi, the country's prime minister, has blamed all these problems on another, equally strong smell coming out of Basra – the stench of corruption, on a massive scale.

Mr Abadi, who is campaigning for a second term, has singled Basra out as the prime example of how reconstruction in Iraq is being hampered by "mafias" of corrupt officials, fuelling ever more anger against the government.

The city's governor, Majid al Nasrawi, fled to Iran nine months ago, having been placed under investigation for allegedly demanding a cut on public works tenders.

"Wherever we try to improve public services, there is a mafia who sabotage it," Mr Abadi said, declaring corruption to be as big a threat as the now-defeated Islamic State once was.

The graft issue runs nationwide in Iraq, which ranks 169 out of 180 countries in Transparency International's index of global corruption. According to Iraq's parliamentary integrity committee, up to $228 billion of public money has been embezzled since the fall of Saddam Hussein.

The problem is arguably most visible in Basra, which generates most of the Baghdad government's public revenues because its sits on Iraq's richest oil fields and has its only sea port. Yet Mr Abadi said that apart from the Times Square Mall, the only other big development the city had to show for its money was an opulent sports stadium.

"They build a sports stadium, but people have nothing to drink," he said. "This was just because it was visible for elections and to cover up their corruption."

Mr Nasrawi, who governed Basra from 2013, claims the allegations against him are a political smear campaign – which, in Iraq's murky political arena, is always possibility.

What is less in doubt, though, is that Basra is no longer the success story it was a few years ago. From 20010 to 2014, it enjoyed a construction boom, after Mr Abadi's predecessor, Nouri al-Maliki, sent in troops to clear out the Iran-backed militias that gained a stranglehold during the five years of British occupation.

But in 2014, what had then become one of Iraq's more peaceful cities took a turn for the worse again after the best local army units were sent to fight the ISIS takeover in the north. Tribal militias exploited the vacuum, demanding much bigger fees to "protect" the oil installations in their rural fiefdoms.

Meanwhile, jobless locals who answered the call of Shiite clerics to volunteer against ISIS are now back from the front, and are likewise starting to flex their muscles. With ever more armed players seeking payoffs, and public revenues hit by the collapse in oil prices, the city is stuck in a vicious circle.

If it is bad news for Basra, it is also depressing news for the city's former occupier, Britain, which lost 179 troops and spent $12 billion during its military deployment to southern Iraq.

London had hoped that one dividend of that blood and treasure would be an open door for British companies to take part in the reconstruction.

Yet aside from energy giants BP and Shell, both of whom were in Iraq before the war, few UK firms have won major contracts to rebuild Basra.

Two leading British firms, Biwater and Wood Group, are currently bidding for a major desalination project that will finally help bring clean drinking water to the city.

But most of the other big reconstruction projects in Basra are going to firms from elsewhere, with Russian, Chinese and Turkish firms all doing well.

One Iraqi engineer with experience of working with British companies in Basra said because of the UK's strict anti-bribery laws, they did not face a level playing field. "New British firms coming here find it very hard because they're always being asked for bribes, which isn't their culture," he said. "The Turkish companies get all the work because they don't mind paying up."

Baroness Nicholson of Winterbourne, the British government's trade envoy to Iraq, told The National that things "were improving" for British firms in Basra but admitted that "smaller companies, if they don't know the territory very well, find it hard to start."

But she added: "That is more a concern about security than corruption, and any company that goes there with paying bribes in mind does not have the right attitude from the start."

The irony of British firms losing out to Russian, Chinese and French firms has not escaped some British businessmen. "The fact is that down in Basra, those countries are now reaping the fruits of a war that they originally opposed," said one. He added that he had seen Iraqi ministers openly demand bribes in meetings.

Alastair White, the deputy chairman of Biwater, the firm bidding for the desalination contract, said his company usually asked for a British diplomat to be present at business meetings in Iraq to deter bribery requests from "arising in the first place".

That, however, may not be possible for every British company. Six years ago, Britain shut down its Basra consulate because of the high security costs.