In battle for Iraq's future, a show of support for prime minister's purges

By AZIZ ALWAN AND CAROLINE ALEXANDER | Bloomberg News | Published: August 20, 2015

Holding aloft signs reading "we are all Abadi" and waving national flags, Iraqis packed a central Baghdad square in a weekend show of support for their prime minister.

The display of solidarity for Haidar al-Abadi as he targets the corrupt and shrinks his government was a welcome change at a pivotal moment for a leader more used to bad news. Swathes of Iraq are under Islamic State control, sectarian divisions fester and the economy is slumping.

"Abadi's got the people on his side as well as the religious authorities," said Sajad Jiyad, an analyst at the Baghdad-based Iraqi Institute for Economic Reform. "If he makes the reforms stick and improves people's lives, we'll look back on this as a defining moment," he said. If he can't and his rivals fight back, "things could take a turn for a worse."

After weeks of street protests against graft and poor services, and an endorsement from Grand Ayatollah Ali Al-Sistani that defused political challenges, an often reticent Abadi decided on Aug. 9 it was time to act. In an effort to change the nation's direction, Abadi announced he was scrapping senior posts, including the nation's three vice presidents, abolishing ministries and would hold incompetent military officers to account.

Twelve years after the U.S.-led invasion that ousted Saddam Hussein, Iraqis are suffering from chronic shortages of power, drinking water and hope. Islamic State militants dominate about a third of the country after sweeping through the north in June last year. State coffers are depleted, and graft -- Transparency International ranks Iraq as among the 10-most-corrupt countries -- is rampant.

Misuse of oil wealth has eroded faith in many Middle Eastern governments. Yet in Iraq, holder of the world's fifth- largest crude reserves, a combustible mix of jihadist conflict, feuding political cliques and distrust between a Shiite-led administration and a large Sunni minority make the country particularly susceptible to graft, analysts say.

In one example, Abadi announced earlier this year that army commanders appointed primarily for their loyalty to former Prime Minister Nouri al-Maliki were receiving funds to pay the salaries of 55,000 soldiers who didn't exist.

The success of Abadi's offensive may hinge on his ability to remove men like Maliki from office, and stifle protests from their supporters.

Though Maliki's star has waned -- as well as losing his job as vice president, he may also face charges over the fall of Mosul to Islamic State -- he still controls 93 seats in parliament and retains powerful friends.

Those include Qais al-Khazali, who leads the League of the Righteous, an Iran-backed militia. Maliki served from 2006 until 2014 when, in the wake of Mosul's fall, he lost the support of Sistani, the United States and Iran.

"The main dilemma is Maliki," Shirouq al-A'abichi, a parliamentary lawmaker, said by phone from Baghdad. "There is a huge dispute surrounding him."

Ayad Allawi, a secular Shiite who heads a largely Sunni party and was also ousted from his vice presidential office, has said that some of Abadi's proposed measures may be unconstitutional. Still, like Maliki, he has voiced support for Abadi.

Abadi's seven-point plan, unanimously approved in a vote in parliament on Aug. 11, reduced the number of security personnel guarding senior officials. He also ended a system of sectarian and party quotas for top posts put in place after the 2003 U.S.- led invasion. Investigations have been opened into the failings of military officers during Islamic State's advance.

On Tuesday, Abadi barred government ministries from hiring contractors, and capped at five the number of advisers allowed in the offices of the prime minister, president and parliament speaker. As many as 300 advisers, who all enjoyed ministerial salaries and perks, had won appointments, according to Jiyad.

"Every couple of days, he's making changes and biting away at the hierarchy that has sucked the country dry," Jiyad said of Abadi.

With its economy in crisis, Iraq is seeking $6 billion in its first international bond issue in almost a decade to plug a fiscal deficit that Fitch Ratings says will widen to 10 percent this year. Savings built up over years of high oil prices have been eroded by military spending and the sharp drop in crude prices.

Hardship, war and the ever-looming threat of the country fracturing mean that, for now, even former rivals are behind Abadi. That may not last.

"We bless all the Abadi reform steps," said Majida al- Timimi, a lawmaker from the Sadr Trend and member of parliament's finance committee, by phone. "He hasn't got a magic stick and he can't fix 10 years of corruption overnight. We will give him three months."

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