Iraq is the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), estimated to have around 145 billion barrels, making it the fifth-largest proven crude oil reserve in the world. Despite these significant reserves, Iraq faces challenges in supplying fuel for domestic consumption, and smuggling activities thrive. The oil sector constitutes 90% of the country’s state revenue, representing 61% of Iraq’s real GDP in 2022. While the price of crude oil remains stable, the Iraqi dinar continues to devalue.
In the summer of 2023, it experienced a 17% decrease compared to the official exchange rate with the U.S. dollar, leading to protests in Baghdad in front of the Central Bank of Iraq. The decline in value is attributed to both a liquidity crisis and new U.S. restrictions against Iran on the dollar, which increased its value compared to the Iraqi dinar.
Iraq has long been a battleground for disputes between Washington and Tehran, the two main financiers of the country. For over a year, the U.S. Federal Reserve has exerted greater control over Iraq due to dollar smuggling to Iran. The U.S. Department of the Treasury and the Federal Reserve Bank of New York have prohibited 14 Iraqi banks from conducting transactions in dollars to curb the flow of this currency to Iran under sanctions. Even NGOs have been prohibited from making payments in dollars. As a result, Baghdad, along with other Middle Eastern countries such as Iran and the United Arab Emirates, has shown interest in other strong foreign currencies. In February 2023, the Central Bank of Iraq announced that trade with China would be conducted in yuan. On the economic front, unemployment remains high, and salaries are very low. Prices of food have been rising for some time, doubling in some cases, as Iraq imports about 50% of its needs, affected by the global rise in costs, also exacerbated by the intensification of the war in Ukraine.
In addition to these challenges, there are also drought, scorching heat, and numerous sandstorms contributing to depopulation in the south of the country. Furthermore, there is a shortage of water resources, with lakes Sawa and Hamrin drying up, and the flow of the Tigris and Euphrates rivers halving compared to the 1970s. These issues are exacerbated by the construction of dams and water withdrawals in Turkey and Iran. According to the United Nations, Iraq ranks as the fifth most vulnerable country globally to climate change and desertification.
What is being fought for
Since the fall of the so-called Islamic State (ISIS) in 2017, Iraq has been substantially governed by Shiite militias supported by Iran. The increasing Iranian influence is at the center of the street protests that have been animating the country for years. This nation has also long become a battleground between the United States and Iran. Tension between the two countries reached its peak on January 3, 2020, when Qasem Soleimani, the Iranian commander of the al-Quds Brigades (one of the five forces making up the Iranian Revolutionary Guard), was assassinated by a US drone in the Baghdad airport area.
In November 2022, Iran’s Supreme Leader Ali Khamenei recalled on state television: “We will not forgive the assassination and we will demand revenge in due time.”
Already after the killing of Soleimani, missile attacks against infrastructure hosting foreign personnel have increased, also putting at risk the many civilians working there. The attacks have resumed after the outbreak, in October 2023, of the umpteenth Israeli-Palestinian war. The main request of the pro-Iranian militias (financed and trained by Tehran) is the return home of US troops. But Prime Minister al-Sudani has publicly defended their presence as well as that of NATO, still in the field in the country with tasks of training and assisting Iraqi units in the fight against Islamist groups, without setting any timetable for their withdrawal.
In ancient times, present-day Iraq was known as Mesopotamia (“Land between the rivers”), and its vast alluvial plains gave rise to some of the world’s earliest civilizations. This rich region, known as the Fertile Crescent, became part of various empires (Greek, Roman, Persian). After the 7th century, it became part of the Islamic world, with Baghdad becoming the capital of the Abbasid Caliphate in the 8th century. After World War I (1914-1918), the modern state of Iraq emerged from the ashes of the Ottoman Empire’s provinces. Despite gaining independence in 1932, over the subsequent quarter-century, the country remained under British imperial influence until the overthrow of the monarchy in 1958. Ten years later, the socialist pan-Arab Ba’ath Party came to power through a bloodless coup. Saddam Hussein, its leader from 1979, led the country into disastrous military adventures (the Iran-Iraq War of 1980-1988 and the First Gulf War in 1990-1991), isolating it from the international community and causing social and financial devastation. Saddam Hussein’s regime was toppled in 2003 by the Anglo-American invasion, motivated by the presence of alleged weapons of mass destruction (never found), which ended in 2011. During those years, Iraq was plagued by constant attacks and a long trail of deaths and injuries due to the conflict between Shiite and Sunni communities, exacerbated by the insurgency against foreign troops.
Since 2012, Iraq has been experiencing the repercussions of the Syrian civil war, with the exchange of Islamist guerrillas General framework between eastern Syria and western Iraq, predominantly Sunni, where there is strong resentment towards the Shiite-dominated government of Baghdad. In 2013, the so-called Islamic State (ISIS) gained ground in both countries, a formation born in 2006 as an offshoot of al-Qaeda which, within a few years, conquered over a third of the country and almost half of Syria. In 2014, at the formal request of the Iraqi government, the US-led military operation Inherent Resolve was launched. ISIS was militarily defeated in 2017, also thanks to the on-the-ground action of Kurdish popular defense forces, financed, trained, and supported by the West. Although they no longer control territories, militants of the so-called Islamic State continue to carry out attacks in the country. On October 13, 2022, the Iraqi Parliament elected as the ninth President of the Republic since the fall of Saddam Hussein the Kurdish engineer Abdul Latif Rashid (79 years old), former Minister of Water Resources in the cabinet of Nouri al-Maliki. Shortly after, the new Head of State appointed as Prime Minister another former member of that previous government, the Shiite Mohammed Shia’ al-Sudani, thus ending a year-long political stalemate. Since September 15, 2018, the President of the Council of Representatives of Iraq (the country’s unicameral Parliament) has been the Sunni deputy Mohammed Rikan Hadid al-Halbousi, formerly head of the Anbar Governorate. The assignment of state positions based on power-sharing agreement among the country’s main ethnic and religious groups, which has been going on for about 18 years, was thus confirmed: President of the Republic of Kurdish ethnicity, Shiite Arab Prime Minister, and Sunni Arab Parliament Speaker.
In June 2023, after months of parliamentary political battles, especially over the distribution of oil revenues between the federal government of Baghdad and that of the autonomous Kurdistan Region of Iraq (KRG), the new budget was approved. It covers the years from 2023 to 2025 with a record figure of 153 billion dollars, allocating a considerable expenditure for development projects and infrastructure. The last Iraqi federal budget dated back to 2021 and amounted to 89 billion dollars. Since then, due to political stalemate and the failure to form a new government for a year, emergency legislation had been passed. The goal of the new three-year budget is to stem the economic crisis, creating tens of thousands of jobs in the public sector. Unemployment, almost doubled in 10 years (from 8% in 2012 to 15.5% in 2022), along with low wages and the endemic problem of corruption, had given rise to imposing street protests in the major cities on several occasions in recent years, often brutally suppressed. After easing, inflation increased at the beginning of 2023, fueled by the depreciation of the Iraqi dinar in the parallel market.
Key figure or organization
Abdulrahman Khalid is a young Iraqi who grew up in Baghdad, in post-US invasion Iraq in 2003, amidst extremism and sectarian fighting among militias. His father was secular, while his mother was a devout Shia Muslim from Iran. While the Islamic State spreads videos of beheadings, torture, and enslavement in the name of Islam, Khalid criticizes religion and promotes atheism on Instagram, becoming an influencer with 100,000 followers. After decades of extremism, according to research by the Arab Barometer, distancing from religion is a trend across the Middle East. The Iraqi Supreme Judicial Council has created a committee to monitor the promotion of atheism on social media. According to the European Union Asylum Agency (Euaa), atheists in Iraq risk aggression and even their lives. Khalid himself, following death threats, has left Baghdad and now lives and works in Turkey.
FOCUS 1 – Sculpture saved from ISIS looting
It is a hybrid creature with a human head, bull body, and bird wings, 3.8×3.9 meters high and weighing 18 tons: a lamassu (Assyrian god or daimonic spirit), a winged deity symbol of protection. The alabaster sculpture was unearthed in Northern Iraq in October 2023 by Iraqi, French, and other European archaeologists. Only the head is missing, already in the Baghdad museum after being stolen and then recovered by Iraqi authorities in the 1990s. There had been no news of the lamassu since then: its head was cut off to be smuggled, while the locals decided to bury the statue’s body to protect it, thus also saving it from ISIS destruction.
FOCUS 2 – The school, victim of war
Currently, in Iraq, 28% of girls and 15% of boys aged 10 to 14 have no access to education. 46% of them do not complete their education, while 9 out of 10 children do not receive early childhood education. These are the data released by UNICEF, six years after the end of the internal conflict (ended in December 2017), which, according to the NGO Intersos, “paint a worrying picture of the right to education for young Iraqis.” The state system of basic services (health, schools, infrastructure) that remained standing after 5 years of war in the northern part of the country, during which thousands of Iraqi families had to abandon their homes, remains fragile. For many, life is suspended, awaiting a return to their places of origin expected for years. Since 2019, the Iraqi government has initiated a policy of closing several refugee camps to encourage returns. But by the end of 2022, there were still 26 formal camps throughout Iraq. Following the internal conflict between the central Iraqi government and ISIS, many minors had to abandon the educational path or face it inconsistently and often ineffectively.