January 24, 2008

January 24, 2008 | Commentary on Middle East

Remarkable Progress in Iraq

Not every dark cloud has a silver lining, but $100 per barrel oil could have at least one: the boost it is providing for Iraq's long-suffering economy. Combined with greater political stability, and spreading zones of security, ascending oil prices are showing promise of making 2008 one of the best years Iraq has had in a long while.

In the department of "don't let good news from Iraq go unnoticed," this column brings you reports not only from the U.S. government, but also from the International Monetary Fund (IMF) and the United Nations as independent confirmation that Iraq looks to be headed for a good year. The argument that Iraq is a failure and a waste of American lives and dollars is getting harder to sustain, which is why we may not have been hearing it nearly as much from the Democratic presidential contenders as one might have expected.

According to a just-released report by the IMF, Iraq may see as much as 7 percent economic growth this year, and 7 to 8 percent next year. According to Mohsin Kahn, director of the fund's Middle East and Central Asia Department, this minor economic miracle is tied mainly to Iraq's growing production of oil - which again reflects an improved security situation. Iraq is currently pumping 2 million barrels per day, a figure that could rise by 200,000 barrels by next year. In the last quarter of 2007, Iraqi oil production rose by 250,000 barrels per day, mainly due to the improved security situation in Kirkuk in the Kurdish area of northern Iraq.

Not only that, but due to the macroeconomic policies and reforms over the past year by the Iraqi government, it was able in December to repay early its entire outstanding debt to the IMF, amounting to some $470 million. As a consequence, the fund approved a new stand-by package for Iraq of $740 million on December 20.

"The Iraqi authorities have succeeded in keeping their economic program, on track, in 2006-7, despite the difficult security situation," stated Takatoshi Kato, deputy Managing Director of the IMF when the new package was approved. The IMF also commended the Iraqi government for its plans to keep up the good works in 2008.

Meanwhile, the United Nations also took note of progress in Iraq last week. U.N. Secretary General Ban Ki-moon gave his report to the U.N. Security Council, calling "the reduction in the overall number of attacks reported across Iraq a welcome development."

He also reminded the Council that solidifying the gains depends on the continued engagement of the Iraqi security forces and the United States and its allies. It also hinges on the extension of a temporary ceasefire by radical Shi'ite leader Moqtada al-Sadr as well as the cooperation of the Sunni Arab groups that switched sides to work with the United States. All of this is true, and contains some major hypotheticals, but 2007 showed that it can be done.

The secretary-general pointed out that similar improvements in the political arena are needed, where political reconciliation has moved slowly. This is undoubtedly true, yet the expectations and demands by critics of the Iraq engagement here at home are often outlandish. After all, this is a political season where political divisions among Americans will be accentuated by our own political process.

The Shi'ite-led Iraqi government recently took a controversial step in this direction, changing the law to allow many of the mainly Sunni former members of the Ba'ath Party to reenter the military and civil service. (The party was declared illegal after the U.S.-led invasion in 2003). An important a step toward reconciliation between Iraq's two main religious groups, it will clearly be a difficult process and some criminals may slip under the radar. Under the circumstances, it is a risk that needs to be taken. There will be the possibility to challenge ex-members on their deeds under Saddam, after which they will be granted immunity from prosecution.

All of these gains, which are finally dawning on the international agencies, are dependent on all of the above - and then some on factions outside the control of either the U.S. or Iraqi governments. If this trend does indeed continue, however, there will be more to the silver for the lining of that dark cloud alluded to above. With the world's third-largest oil reserves, Iraq has the potential to help bring those prices back down - which is all the more reason for the U.S. and Iraqi government to stay committed to the gains that were made in 2007.

Helle Dale is director of the Douglas and Sarah Allison Center for Foreign Policy Studies at the Heritage Foundation.

About the Author

Helle C. Dale Senior Fellow for Public Diplomacy
The Margaret Thatcher Center for Freedom

First appeared in the Washington Times