Kadhimi’s Rolling Reshuffle (Part 2): Protecting Iraq’s Economic Institutions and Borders
Also available in العربية
September 15, 2020
As technocrats increasingly fill key government roles, U.S. officials need to help Baghdad withstand the inevitable counterpunch from political and militia factions used to dictating such appointments.
On September 14, Baghdad announced a range of strategic leadership appointments for institutions tasked with overseeing Iraq’s economy, borders, and anti-corruption efforts—a list that includes banks, customs authorities, airports, seaports, land crossings, municipal bodies, investigative committees, and more.
The ambitious scope of the appointments and the centralized manner in which they were made says a great deal about Prime Minister Mustafa al-Kadhimi’s commitment to changing the corrosive status quo in Baghdad.
The question now is whether his government can withstand the coming pushback from militia and political elements who benefit from that status quo.
The following is a digest of the new technocratic appointments and their implications; see Part 1 of this PolicyWatch for a discussion of Kadhimi’s recent military reshuffling.
PROTECTING NATIONAL SYSTEMS
One of the main drivers behind Iraq’s long-building surge in militia influence and corruption has been the hijacking of strategic economic systems by political blocs that guide the selection and decisions of important officials.
The leadership changes instituted since Kadhimi came to power in May are intended to free up many of those systems and reduce opportunities for negative actors to exploit them.
The formal purpose of the September 14 appointments was to replace incumbents whose terms expired in July, but crucially, the choices were not guided by the typical quota used to split posts between parties.
Central Bank of Iraq (CBI). Mustafa Ghaleb has been named the CBI’s new governor after long service as its head of legal affairs.
A nonpartisan figure with a history of resisting political pressure, he will now take the lead on implementing bank reforms and protecting the dollar auction process against interference from Iran, militias, and other corrupt actors.
Trade Bank of Iraq (TBI). Salem al-Chalabi, previously an advisor to the prime minister, is the new head of the TBI.
This places a known international financial and legal figure at the heart of an agency that holds a virtual monopoly on Iraq’s multi-billion-dollar market for issuing letters of credit.
IMPLICATIONS FOR U.S. POLICY
The Kadhimi government has tried something ambitious and risky with its economic reshuffle: centralizing the selection of candidates for strategic roles without significant input from the political blocs.
This breaks a golden rule of Iraqi politics, namely, observance of the muhasasa, the longstanding system of party and ethnic patronage.
Accordingly, the latest appointments will require Kadhimi to deal with harsh pushback from an enraged political class, especially the Iran-backed Fatah coalition.
In public, Washington should quietly acknowledge and welcome such appointments.
Behind the scenes, however, U.S. officials and other international partners can confidently celebrate them as a sign that Kadhimi’s team is on the right trajectory and is willing to take (some) major risks.
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