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The electricity crisis in Iraq is a microcosm of the corruption afflicting the country

August 5, 2021 at 11:00 am

A mask-clad General Electric employee tours the Dhi Qar Combined Cycle Power Plant near the Iraqi city of Nasiriyah on June 16, 2020 [HUSSEIN FALEH/AFP via Getty Images]

When the Green Party’s Caroline Lucas MP asked Britain’s Secretary of State for Foreign, Commonwealth and Development Affairs whether the government was supporting gas-related projects in other countries financially, the minister replied that the government was continuing to support the General Electric power project in Iraq. This is in line with Britain’s policy in Iraq.

General Electric is an American multinational company, ranked as one of the 300 largest companies in the US in terms of total revenues. The company, under pressure from former US President Donald Trump, won a contract in 2017 worth more than $1.2 billion “to implement projects in the energy sector that will provide reliable energy supplies across [Iraq].” The British government also agreed to provide a contract worth $155 million for General Electric with another British company to strengthen the energy sector in Iraq. Creating such projects provides huge opportunities for British exporters, according to the Secretary of State for International Trade who, in his delight when announcing the deals, neglected to mention how much profit Britain would get in return.

Lucas considered the Secretary of State’s answer to be adequate. What is important, from the point of view of a British politician, whether from the left or right, is that the government continues to cooperate with the Iraqi government in providing services and stability to the Iraqi people. Economic domination and, through it, political domination following the 2003 invasion and occupation, is rarely mentioned publicly.

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Hence, it was natural for Lucas, despite being a leftist, not to ask how successful such projects are in improving the situation of the Iraqi people, as Britain is largely responsible for its deterioration. If the government has been supporting energy projects since the fall of Saddam Hussein’s regime in 2003 and the signing of contracts is renewed with the visit of every Iraqi electricity minister to London, then why do Iraqi protesters take to the streets with coffins marked “electricity”, especially in the summer? Why do they sacrifice their lives — and thousands of them have been killed and wounded — in all seasons? To what extent does the government in Westminster benefit from its support for British, American and other companies, most of which have fictitious contracts, under the slogan of reform, renewal and increasing the ability to provide Iraqis with electricity? How is it that households in Iraq get fewer than five hours of electricity daily even when the temperature reaches 52 degrees Celsius? Why, with all the projects that are announced, is Iraq still the top importer of electricity from Iran? Why hasn’t anything been done to process an estimated 16 billion cubic metres of gas for use in power stations, saving the country $5.2 billion and eliminating the need to import from Iran? Or is that exactly what is expected to happen? There are too many unanswered question in all of this.

Despite spending more than $50 billion since 2003 in Iraq, official Iraqi, British and American statements, as well as specialised reports, justify power outages by citing technical reasons, some of which date back to the 1990s. They also cite the destruction inflicted on the country after the US-British invasion, followed by the emergence of Daesh. The increase in population, air conditioning, a rise in consumption and the non-payment of electricity and gas bills are also given as reasons for power cuts. These point to a deteriorating political and economic reality, at all levels, that requires immediate and strategic solutions to ensure the preservation of the life and dignity of Iraqi citizens rather than blaming them. This will not be achieved unless there is independent political action on the part of the government in Baghdad, which in turn requires Iraq to have control over its own sovereignty and be free of corruption.

The latter is a major factor in the lack of projects being implemented in Iraq. Fraud is commonplace in government contracts with external parties on the one hand, and the generator mafia at a local level on the other. This mafia controls everything related to electricity, including its price and distribution; politicians and militias alike have stakes in it. As a result, the rate of meeting per capita electricity needs in Iraq is still one of the lowest in the Middle East.

As for foreign contracts, a recent Chatham House report — “Politically sanctioned corruption and barriers to reform in Iraq” — provides examples of fraud in government contracts by using shell companies. One of these is the contract signed by the Iraqi Ministry of Electricity with the British company Power Engines to build 29 power stations in the city of Nasiriyah, in southern Iraq. The government paid a total of $21 million only to find that the company was fraudulent. Nobody was dismissed or punished for this, and nor was legal action taken. Another official document revealed a loss of $8 million from the General Directorate of North Energy Production.

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Anyone watching the television interviews of Iraqi politicians will find that accusations of corruption related to foreign contracts pass without question or accountability. The lack of accountability for corrupt Iraqis is not limited to those within their country; it extends to the US and Britain if the official involved holds dual nationality or a residency permit.

An exception is Nawfal Hammadi Al-Sultan, the former governor of Nineveh who was sanctioned by the British government last month, because he “misappropriated public funds intended for reconstruction efforts to provide support for civilians, and improperly awarded contracts and other state property.”

Iraqi “businessmen” find that Britain and America are largely safe havens. Why wouldn’t they when an estimated $150 billion of Iraqi oil money has been smuggled in corrupt deals since 2003? Is there anyone more welcoming of this money than those who spearheaded the invasion and occupation? Money transferred as a result of corruption from troubled countries around the world, rich or poor, ends up in the stock exchanges, banks and real estate of the countries engaged in military interventions and invasions. The world is experiencing a period of indirect imperialist plunder. These countries evade the cost of occupation or the necessity of rehabilitating stable dependent regimes, by replacing them with continuous chaos and looting involving corrupt puppet regimes. What is looted, of course, ends up in a “safe economic haven”.

This article first appeared in Arabic in Al-Quds Al-Arabi on 2 August 2021 

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.