The key to rescuing a ruined state

At the end of next month, the US is pulling its combat troops out of Iraq. But the country they are leaving behind is still a wreck.

On June 14, an interpreter for the US Army called Hameed al-Daraji was shot dead as he was sleeping in his house in Samarra, a city 95km north of Baghdad.

In some respects there was nothing strange about the killing, since 26 Iraqi civilians were murdered in different parts of the country on the same day.

As well as working periodically for the Americans since 2003, Daraji may have recently converted to Christianity and unwisely taken to wearing a crucifix around his neck - a gesture quite enough to make him a target in the Sunni Arab heartlands.

What made Iraqis, inured to violence though they are, pay particular attention to the murder of Daraji was the identity of his killer. Arrested soon after the body was discovered, his son is reported to have confessed to the murder, explaining that his father's job and change of religion brought such shame on the family that there was no alternative to shooting him.

A second son and Daraji's nephew are also wanted for the killing and all three of the young men are alleged to have links to al Qaeda.

The story illustrates the degree to which Iraq remains an extraordinarily violent place.

Without the rest of the world paying much attention, some 160 Iraqis have been killed, and hundreds wounded, during the past two weeks.

Civilian casualties in Iraq are still higher than in Afghanistan, although these days the latter has a near-monopoly of media attention. But the killing of Daraji should give pause to those who imagine that the US occupation of Iraq somehow came right in its final years and that American combat troops might even care to linger on in Iraq beyond their scheduled departure date on August 31.

All remaining US troops are to be out at the end of 2011. American troops will leave behind a country that is a barely floating wreck. Baghdad feels like a city under military occupation, with horrendous traffic jams caused by the 1500 checkpoints and streets blocked off by kilometres of concrete blast walls that strangle communications within the city. The situation in Iraq is in many ways "better" than it was, but it could hardly be anything else, given that killings at their peak in 2006-2007 were running at about 3000 a month. That said, Baghdad remains one of the most dangerous cities in the world, riskier to walk around than Kabul or Kandahar.

Not everything can be blamed on the present political leadership. Iraq is recovering from 30 years of dictatorship, war and sanctions, and the recovery is grindingly slow and incomplete because the impact of the multiple disasters to strike Iraq after 1980 was so great. Saddam Hussein poured money into his self-inflicted war with Iran, leaving nothing for hospitals or schools.

Defeat by the US-led coalition in Kuwait provoked a collapse in the currency and 13 years of UN sanctions that amounted to an economic siege. Iraq has never recovered from these catastrophes.

During sanctions, the government had no money and ceased to pay its officials, who therefore charged for their services. These days, they receive good salaries but the old tradition of doing nothing without a bribe has not died away. Saturation levels of corruption render the state dysfunctional. To give a small example: one friend teaching at a university in Baghdad became pregnant and applied for a month's paid leave to have her baby, as was her right. The university administrators said she could have the leave but on condition that she handed over the month's salary to them.

What makes corruption so devastating in its effects is that it cripples the state apparatus and prevents it performing its most essential functions. In 2004-2005, for instance, the entire military procurement budget of US$1.2 billion was stolen, although this may have been explained by the chaos of the first years of the post-Saddam Iraqi state, with the Americans calling many of the shots and nobody sure who really held power.

Corruption explains much in Iraq - but it is not the only reason why it has been so difficult to create a functioning government. Saddam Hussein should not be a hard act to follow.

Part of the problem is that the US invasion and the overthrow of Saddam Hussein had revolutionary consequences because it shifted power from the Sunni Arab Baathists to the 60 per cent of Iraqis who are Shia and in alliance with the Kurds.

Iraq had a new ruling class rooted in the rural Shia population and headed by former exiles with no experience of running anything.

In many ways, their idea of government is to recreate Saddam's system, only this time with the Shia in charge. It used to be said that Iraq was under the thumb of Sunni Arabs from Tikrit, Saddam Hussein's home city. These days people in Baghdad complain that a similar tight-knit gang from the Shia city of Nasiriyah surrounds the Prime Minister Nouri al-Maliki.

In many ways, Iraq is becoming like Lebanon, its politics and society irredeemably divided by sectarian and communal loyalties.

The outcome of the parliamentary election on March 7 could easily be forecast by assuming that most Iraqis would vote as Sunni, Shia or Kurds.

Government jobs are filled unofficially according to sectarian affiliation. This does give everybody a share of the cake, but the cake is too small to satisfy more than a fraction of Iraqis. Government is also weakened because ministers are representatives of some party, faction or community and cannot be dismissed because they are crooked or incompetent.

Violence may be down, but few of the two million Iraqi refugees in Jordan and Syria think it safe enough to go home. A further 1.5 million people are internally displaced persons (IDPs), forced out of their homes by sectarian pogroms in 2006 and 2007 and too frightened to return. Of these, some 500,000 people live in squatter camps which Refugees International describes as lacking "basic services, including water, sanitation and electricity, and built on precarious places - under bridges, alongside railroad tracks and amongst garbage tracks".

A worrying fact about these camps is that the number of people in them should be shrinking as sectarian warfare ebbs but, in fact, the IDP population is growing. These days refugees come to the camps not because of fear of the death squads but because of poverty, joblessness and the drought which is driving farmers off their land.

Iraq is full of people who have little left to lose and have a deep anger towards a government which they see as being run by a kleptomaniac elite gobbling up Iraq's oil revenues. As in Lebanon and Afghanistan, where disparities in wealth are also huge, class hatred and religious differences combine to exacerbate the hatred felt between and within communities.

Iraq differs from Lebanon in one crucial respect. It is an oil state with annual revenues of US$60 billion last year and with huge unexploited oil reserves, its oil exports may quadruple over the next decade under contracts signed with oil companies last year. There ought to be enough money to raise standards of living and rebuild the infrastructure after long neglect.

At first sight, oil could be the solution to Iraq's innumerable problems but, in Iraq in the past, and in other oil states, it has proved a political curse as well as an economic blessing. Countries reliant on oil and gas exports are almost invariably dictatorships or monarchies. Control of oil revenues, not popular support, appears to rulers to be the source of their power. If there is opposition, then oil wealth enables leaders to build up and pay for security forces to crush it.

No other country needs carefully calculated compromise between communities and parties more than Iraq, but oil may tempt the governments to rely on force. This is what happened to Saddam Hussein, who would never have had the strength to invade Iran or Kuwait without Iraq's oil wealth. The same thing may happen again: an over-mighty - yet corrupt and incompetent - state may try to crush its opponents rather than conciliate them. Oil alone will not stabilise Iraq.

- Independent