Iraq’s Provision Portion Programme fuels corruption

Sunday 30/07/2017
Victims of inefficiency. A 2016 file picture shows demonstrators shouting slogans during a protest against government corruption at Tahrir Square in Baghdad. (Reuters)

Washington- Everywhere I go, Ira­qis are telling me that money simply isn’t getting to them. Not to their ministries af­ter we’ve made allocations, not to provinces, not to anyone,” Paul Bremer, the first American adminis­trator charged with overseeing Iraq, wrote in 2003.

In his book “My Year in Iraq,” co-written with Malcolm McConnell, Bremer argued that, under for­mer Iraqi President Saddam Hus­sein, the Iraqi Finance Ministry controlled only 8% of the national budget. Consequentially, as US ad­ministrators sought to channel the entire national budget through the relatively small ministry, staff and systems became overwhelmed.

Today, many American observers agree that the United States’ man­agement of post-Saddam Iraq was one of the worst instances of post-conflict governance in history.

Overestimating the power of market forces, Iraq’s American rul­ers threw oil-generated wealth on Iraqis with the idea that would au­tomatically lead to the birth of a robust capitalistic democracy. This proved not to be the case.

Prior to the American invasion, Iraq had been under the rule of the Arab Socialist Ba’ath Party for dec­ades. True, the Ba’ath was not as socialist as it claimed to be, admin­istrating an economy largely based on oil rent and clientelism. Social­ist or not, however, Iraqis expected their government, president or even their local tribal chief to take care of them, especially in hard times.

The Iraqi invasion of Kuwait in 1990, the ensuing international embargo and a devastating war in 2003, which effectively destroyed the country’s infrastructure, result­ed in hyperinflation, widespread poverty and the marked deteriora­tion of essentially all other govern­ment services.

To alleviate the suffering, Bagh­dad used its meagre resources to instate the Provision Portion Programme (PPP), a scheme like Britain’s 1942 Food Rationing Pro­gramme. The Iraqi government issued PPP cards that, due to the importance of the programme, be­came identification documents in official business, the same way So­cial Security numbers in the United States became an essential identifi­cation feature for US citizens.

Iraq’s American administrators were rarely interested in grasping the intricacies of Iraq’s govern­ment. They were mostly focused on politics rather than policies. After some interruption, and by the time the American civil administration “handed over sovereignty to Ira­qis,” PPP had become the principal means of economic exchange and, like everything in Iraq, had simulta­neously became one of the principal yardsticks of governmental corrup­tion.

In 2016, Iraq lingered near the bottom of Transparency Interna­tional’s “Corruption Perceptions In­dex,” ranking 166th of 176.

With PPP, officials often procured and distributed rotten rice, one of the 15 basic staples covered in the monthly ration, leaving a huge markup for officials. Not to be out­done by the corruption of their ac­counting peers, PPP distribution officials often issued cards for de­ceased or imaginary citizens.

In 2012, the Director of Planning Haidar Jabr said his office issued 34 million PPP cards. The World Bank estimated the population of Iraq stood at 32.9 million during the same period, meaning the Iraqi gov­ernment issued more than 1 million PPP cards that year to the imagined and the dead. With the monthly cost of $12 per individual, whoever controlled the excess PPP cards in the Iraqi government pocketed $144 million in 2012.

Under pressure from internation­al organisations, Baghdad moved to cut PPP’s annual budget from $5.5 billion in 2015 to $2 billion in 2016. However, saving on programmes that are designed to help the poor often comes with a high political price. Some reports said the Iraqi government kept PPP’s spending at its highest levels throughout 2016, often by approving extra funds on an ad hoc basis.

For this year, the Iraqi govern­ment again announced lower spending levels for the PPP but if Baghdad continues to fund the pro­gramme from outside the approved budget, PPP will consume 7% of to­tal Iraqi expenditures, estimated at $85.2 billion in 2017.

For many, Iraq’s PPP remains a relic from the country’s socialist past. Disbanding the programme or replacing it with a more efficient one designed to feed the poorest requires political capital and over­sight. With Iraqi leaders unable or unwilling to lift their country’s rank on the international indices of cor­ruption, the inefficient PPP will continue to linger outside official books, while sucking a considerable amount of resources from both the nation’s annual expenses and, ulti­mately, its future.