International Community Reluctant to Pay for Post-Islamic State Reconstruction of Iraq

Iraqi fighters stand next to a wall bearing the Islamic State group flag in western Anbar province on November 3, 2017

The damage inflicted on Iraq by the rise and fall of the Islamic State (ISIS) is horrendous, with cities like the former ISIS stronghold of Mosul virtually leveled.

Baghdad puts the damage at roughly $100 billion, which is an impressive level of vandalism from a group President Barack Obama famously dismissed as the “junior varsity team” of terrorism. Unfortunately for Iraq, donor nations are not lining up to finance the reconstruction.

“The Trump administration has told the Iraqis it won’t pay for a massive reconstruction drive. Iraq hopes Saudi Arabia and other Gulf countries will step up, and Iran may also take a role. The U.N. is repairing some infrastructure in nearly two dozen towns and cities around Iraq, but funding for it is a fraction of what will be needed. As a result, much of the rebuilding that has happened has come from individuals using personal savings to salvage homes and shops as best they can,” the Associated Press reported on Thursday.

Later in the piece, military experts are quoted comparing the battles for Mosul and Raqqa, the Islamic State capital in Syria, to the battle of Hue in Vietnam and the bombing of Dresden in World War II. Those are among the most damning comparisons a military historian can make, putting Mosul and Raqqa into the category of cities that had to be destroyed in order to save them, to make another Vietnam allusion. Entrenched enemies with no regard for civilian life are incredibly difficult to cleanse from dense urban areas.

The AP quotes Mosul municipal director Abdulsattar al-Habu warning that if his city is not rebuilt so its 600,000 displaced residents can return home, “it will result in the rebirth of terrorism.”

Mosul resident Amar Ismail Brahim said Iraqis fought ISIS “on behalf of the whole word” and saw their city destroyed in the process. Habu declared that “the responsibility to pay for reconstruction falls with the international community.”

The international community disagrees, as the Associated Press relates:

So far, stabilization has received some $392 million in contributions. The United States has given the lion’s share, some $115 million. Germany is the second biggest donor at $64 million. The United Arab Emirates and Kuwait are also contributing, but no other Gulf nations are among the list of donors.

Overall, Washington has contributed $265 million to reconstruction since 2014, on top of $1.7 billion in humanitarian assistance in Iraq. That is a fraction of the $14.3 billion that the U.S. spent in fighting the Islamic State group in Iraq and Syria.

And it’s far less than what Iraqis hoped. Baghdad at first expected American money would flow in after the defeat of IS, said a senior U.S. official in Washington who regularly meets with Iraqi leadership. But Secretary of State Rex Tillerson has said the United States is no longer in the business of “nation-building.”

“We just tell them, no, it’s not going to happen,” the U.S. official said. “We have to be up front with them.”

The official said many in Washington believe past efforts in Iraq didn’t yield adequate returns and there is little appetite for large international reconstruction projects. After the 2003 toppling of Saddam Hussein, the U.S. pumped $60 billion over nine years into Iraqi reconstruction. Critics say the money did little to prevent political disarray and the rise of militants in Iraq. About $8 billion dollars of it was wasted through corruption and mismanagement, according to the U.S. special inspector general for Iraq reconstruction.

A pithy summation of the feeling many Americans have about rebuilding post-ISIS Iraq was provided on Twitter by Iraq War vet and Wounded Warrior J.R. Salzman:

Balanced against this are bitter grumblings that the rise of the Islamic State in Iraq is partially the fault of the Obama administration, and warnings that it doesn’t really matter whose fault it is; the question is whether devastated Iraq will prove a breeding ground for more terrorists, or an inviting power vacuum that malign powers like Iran will rush to fill. Perhaps the wealthy Sunni states of the Gulf should ponder that possibility at length before they decide how much to contribute.

The worst of all worlds would be a massive contribution from outside benefactors, in the West or the Middle East, that vanishes into sinkholes of corruption and inefficiency. Reconstruction must lure back investment and skilled workers, not just rebuild shattered homes and shops. The odds of doing that will be strongly influenced by perceptions of how well Baghdad manages the effort, no matter where the money comes from.

The Atlantic observed in July that the international community is reluctant to commit big money to Iraqi reconstruction due to “skepticism over Baghdad’s capacity to properly distribute the funds.” Those who call for a new Marshall Plan tend to forget that Iraqi politics would never allow the degree of American oversight and supervision that made the original Marshall Plan work for Europe after World War II.

“Privately, business owners acknowledge that it simply is not possible to do business in Iraq without paying bribes,” the Atlantic reported. “The country remains vulnerable to clientelism, in part because of the public sector’s dominance of the Iraqi business environment. The result is that political power often rests with whoever can provide his supporters with lucrative government contracts. All this contributed to Iraq coming in at 166 out of 176 countries in Transparency International’s 2016 corruption index.”

The July piece also noted that Iraqis are already complaining about Baghdad wasting much of the money it has received, even though it claims to need far more, and the central government remains unwilling to break up state-run monopolies to diversify the economy. There is little indication that the conditions necessary for small- and medium-sized businesses to flourish exist in regions like Mosul. Funds that are vitally needed for infrastructure are instead tied up in salaries, subsidies, and benefits.

Mosul’s first Christmas celebration since the fall of the Islamic State has been applauded as a hopeful sign of things to come, with military officers, local officials, and area Muslims joining a tiny band of a hundred Christians for a mass at Saint Paul’s Church. Chaldean Patriarch Louis Rapheal Sako told the congregants to pray for “peace and stability in Mosul, Iraq, and the world.” They prayed for exactly what they need, if they want to convince the world that this time, Iraqi reconstruction will be different.


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