How will Iraq fund its post-ISIS reconstruction?

The Trump administration has made clear that the $14.3 billion military campaign against ISIS will not be replaced with a similarly funded reconstruction effort.
Sunday 17/12/2017
A worker removes rubble during the reconstruction of a destroyed building in eastern Mosul

London - Iraq is seeking external sup­port for reconstruction af­ter declaring victory in the war against the Islamic State (ISIS), which the government said caused an estimated $100 bil­lion in damage. It remains unclear whether Baghdad can raise such a sum.

US officials indicated that Wash­ington would support Iraq in its ef­forts despite the Trump adminis­tration’s announcement of cutting foreign aid.

The Trump administration has made clear that the $14.3 billion military campaign against ISIS will not be replaced with a simi­larly funded reconstruction effort so aid organisations are looking to wealthy Gulf countries.

Thomas Staal, counsellor of the US Agency for International Devel­opment (USAID), said the govern­ment agency would provide basic humanitarian services and sup­port for minority groups, such as psychosocial aid to victims of gen­ocide, slavery and gender-based violence.

“The budget that the president submitted included a 30% cut but for Iraq actually we are looking at additional funding, especially for the victims of the Islamic State,” Staal told Reuters in an interview at the US Embassy in Baghdad.

The US government has provid­ed nearly $1.7 billion in humani­tarian assistance for Iraq since the ISIS takeover of the north in 2014, Staal said.

US Ambassador to Iraq Douglas Silliman said Washington was fo­cused on keeping the peace and rebuilding Iraq but he took aim at Iran for not helping Baghdad’s re­construction efforts.

“The Iranians have — to some ex­tent — assisted the government of Iraq in defeating ISIS but, frankly, I have not seen the Iranians do­nating money for humanitarian assistance. I have not seen them contributing to the UN stabilisa­tion programme,” Silliman told the Associated Press.

“Iraq is coming out of a difficult period in which there had been a lot of economic destruction, lots of social disruption and we think that it is important for Iraq to have good, positive relationships with all of its neighbours and Iran is in­cluded in that,” Silliman said.

Approximately 3 million Iraqis are displaced, months after major fighting against ISIS ended.

Iraq’s Oil Ministry said it has be­gun reconstruction at what was the country’s biggest oil refinery before it was damaged during fighting between government forc­es and ISIS.

The aim is to complete work ear­ly next year on a unit that will pro­duce 70,000 barrels per day at the Baiji complex, which is currently shut, said ministry spokesman As­sem Jihad.

Constructed in 1975 and approx­imately 200km north of Baghdad, the refinery produced 250,000- 300,000 barrels a day before ISIS seized it in June 2014. Government forces retook the facility and the city of Baiji in October 2015 but severe damage left the refinery closed.

“The rehabilitation will allow the distribution of refined products for the north of the country and re­duce our imports,” said Jihad.

The Oil Ministry said that it has added a new processing unit to the Kirkuk oil refinery, increasing the plant’s capacity to 56,000 bar­rels per day. The new production unit can process 13,000 barrels per day of crude, a ministry statement said, citing Oil Minister Jabar Ali al- Luaibi.

The upgraded production capac­ity will meet most of the domestic needs of the northern oil city of Kirkuk and nearby provinces and “save hard currency because of cutting fuel imports,” it said.

Iraq is working to divert most fu­ture output from Kirkuk’s oilfield to local refineries due to a conflict with Kurdish regional authorities over the use of an export pipeline to Turkey. Production from Kirkuk stopped in October after Iraqi forc­es dislodged Kurdish fighters and took over the northern region’s oil­fields.

Iraq’s 2018 budget reportedly will not exceed $92 billion, with only 2% allocated for reconstruc­tion of areas liberated from ISIS.

Much hope is pinned on a donor meeting for Iraq’s reconstruction set for February in Kuwait but, as is often the case with such gath­erings, aid pledges do not always translate to actual funds.

The distribution of funds will likely be vital in keeping the peace in Iraq.

“It is necessary to tackle recon­struction, economic and social problems, stem corruption and en­sure the equitable distribution of oil incomes,” Karim Bitar, a region­al expert at the Paris-based Insti­tute for International and Strategic Affairs, told Agence France-Presse.

On top of that, the threat of ISIS resurrecting remains.

Three days after declaring vic­tory over ISIS, Iraqi Prime Minister Haider al-Abadi warned that the group might “erupt again some­where else” without international cooperation in combating the mili­tants.

“We have managed to break them” in Iraq, he said, adding that it’s a worry for everyone that ISIS has “this unfortunate ability to re­cruit young people very quickly.”