Iraq’s Provision Portion Programme fuels corruption
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.