Now Comes the Hard Part in Iraq

Two months ago in a post on Iraq’s prospects for developing into a regional power, I parenthetically mentioned the following:

Funny how we’ve heard a lot about the impact of falling crude prices on Russia, Iran and Venezuela, but not on Iraq.

Two months later, we begin to hear about it (via today’s WPR Media Roundup), and with oil exports accounting for 90 percent of the Iraqi government’s revenues, the consequences have been immediate and drastic. Future reconstruction projects are being postponed, and the government will have to tap into its $35 billion oil revenue reserves not only to finance those already under way, but also to meet day-to-day operating costs.

Those, in turn, have been swollen by pay raises for the civil service, but also, significantly, by the upsizing of the security forces (from 250,000 two years ago to 609,000 today). I’ve mentioned before the societal costs of militarizing the bulk of Iraq’s and Afghanistan’s employable male population, which is a cornerstone of American COIN tactics. Here’s the first indication of its impact on the bottom line.

On the bright side?

. . . [T]he crisis could finally force the Iraqigovernment to build up its agricultural and industrial sectors, andcreate a thriving private sector. Some Iraqi officials have beenpushing for these moves for years.

The question is whether Iraq’s fragile stability can withstand the kind of strain such an economic transformation puts on any society.

Like in many other areas where the Bush administration pursued reckless policies, we have actually been muddling through the disaster of Iraq in the context of a best-case scenario. Even former president Bush’s political weakness offered him a liberty of action to pursue unpopular policies (i.e., the Surge) that in retrospect paid off. Now there are fewer resources to throw around in both the U.S. and Iraq, and President Obama will have to carefully weigh the cost of future policy on his domestic and international political capital. His updated withdrawal timeline of 19 months, expected to be announced in the coming days, was cagily formulated to keep everyone happy. But those 19 months will be filled with unexpected obstacles and, therefore, tough choices.

In other words, as bad as things have seemed over the past five years, now comes the hard part.

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