BAGHDAD – A decade after 9/11 attacks that set the stage for the 2003 invasion, Iraq is struggling to rebuild as dysfunctional politics, a persistent insurgency and rampant graft blunt the promise of its oil wealth.
Though the country has held two largely free legislative polls and two other votes since Saddam Hussein’s ouster, violence has claimed more than 100,000 lives and hampered reconstruction of its crumbling infrastructure and dated economy.
And while crude oil output has slowly ramped up, combining with high prices to provide a bonanza for a country desperately in need of funds, politicians have argued over cabinet posts for almost 18 months since the last polls, and dithered over whether to ask US troops to stay beyond the end of 2011.
“It’s a tale of two stories right now,” said Ali al-Saffar, an Iraq analyst at the Economist Intelligence Unit (EIU) in London.
“As far as the politics are concerned, it’s a matter of stagnation.”
“As far as the economics are concerned, because of the oil … the future is looking quite bright.”
After the September 11, 2001 attacks, then US president George W. Bush’s administration trumpeted now-discredited claims that Saddam had ties with Al-Qaeda and possessed weapons of mass destruction to justify an invasion.
Now, just months before the scheduled withdrawal of US forces, violence remains a key issue, though unrest has dropped dramatically from its peak in 2006 and 2007, when sectarian bloodshed left tens of thousands dead.
Since that time, Iraq’s forces have strengthened both in numbers and capabilities, though they are still unable to secure the country’s airspace, borders or waters, Baghdad and Washington say.
Iraqi politicians said in August they would open talks with Washington over keeping a contingent of American military trainers here beyond 2011, when they are due to withdraw.
But no official talks have begun, and an eventual deal remains in question as US officials insist their forces must have Iraqi parliament-approved immunity from prosecution, while few lawmakers here want to be seen publicly supporting a continued American troop presence.
Meanwhile, most assess that Iraq’s insurgents, chief among them Al-Qaeda’s front group here, have significantly weakened.
“I think Al-Qaeda (between 2005 and 2007)… represented a fundamental threat to the state,” Major General Jeffrey Buchanan, spokesman for US forces in Iraq, told AFP.
Now, “they’re still out there … but I think that they don’t represent the existential threat that they once did.”
US forces have also recently noted the threat posed by Iran-backed Shiite militias, which have vowed to target American troops ahead of their pullout.
The legacy of the violence has affected reconstruction, as crucial momentum and time was lost in the aftermath of the invasion.
“In 2003, 2004, if things were moving as we were hoping at that time, there would have been a great deal of economic reforms taking place, a lot of investment would have come into the country,” said Sami al-Araji, chairman of Iraq’s National Investment Commission.
Now, Iraq is aiming for $86 billion of private investment between 2010 and 2014 in a bid to build new houses, power stations and other infrastructure.
Widespread corruption also hinders Iraq’s growth. The United Nations has noted that while Baghdad has made significant strides in fighting graft, “corruption remains a major drain on investment, growth and job creation.”
Transparency International rates Iraq as the fourth most corrupt country in the world.
Iraq also has yet to resolve a row with its autonomous Kurdistan region over a vast swathe of disputed territory centred on the ethnically mixed, oil-rich northern province of Kirkuk.
The United States and Iraqi officials have long identified this as one of the biggest threats to the country’s long-term stability.
Despite those problems, the country can still count on its vast energy stores, with crude sales accounting for the lion’s share of government income.
Production has increased to around 2.7 million barrels per day from around two million bpd in 2006. That, coupled with average oil prices above $100 per barrel for much of the year, has meant Iraq is set to surpass its 2010 oil income with four months still to go this year.
Authorities say oil output will rise further, with production capacity reaching 12.5 million bpd by 2017, though the IMF has voiced doubts over those targets.
Despite the promise of the oil bonanza, however, the EIU’s Saffar says the Iraq of 2011 is not what he expected when coalition forces invaded.
“Once Saddam fell, there was such an overwhelming sense of optimism,” he said.
“When you look back at that sense of optimism, we didn’t know there was going to be Al-Qaeda bombings, we didn’t know there was going to be a sectarian war, we didn’t know the politicians, who seemed quite close in opposition, would be tearing at each other.