The selling off of Iraqi public land to political parties

Someone yesterday asked me about the nature of foreign extractivism and plunder of Iraqi public assets in Iraq and I now feel obliged to write this short piece to clarify a few things about how political party commercial interests operate in the country.

One way in political parties and their cronies have derived enormous state rent from Iraq has been through the issuance of investment licences – basically the transfer of public land, resources of the people of Iraq, into the ownership of ‘investors’.

The distribution of public land – namely through the US created institutions National Investment Commission (NIC) and the Provincial Investment Commissions (PICs) under the occupation has been a key source of rent extraction from Iraq. Since 2003, land belonging to the people of Iraq has been distributed on a no-cost-basis – for free – to political cronies under so called ‘Investment Licences’. These investment licenses are generally issued by the Provincial Investment Commissions to Iraqi and non-Iraqi ‘investors’. In other cases, the provincial government too issues investment licenses. These licenses are issued on the basis that there would be investment capital for projects across all of Iraq’s sectors but the far majority have seen no real capital investments.

The distribution of land, on the basis of a ‘lease’ which is renewable after 50 years, is basically one of the lasting legacies of the US occupation which attempted to sell Iraq’s assets and economy  – lock, stock and barrel –  to the private sector.

What has transpired over the past few years is that this ‘liberal’ mechanism has been another medium for the distribution of Iraqi land to different political parties, religious groups and their members and cronies. Its been one, albeit key, way to strengthen political party presence in Iraq as a significant number of these licenses are issued to those closely connected to Iraq’s post-2003 elites.

Most investment licenses issued by the National and Provincial Investment Commissions have however not been activated. There are now thousands of these investment commission issued plots of land, lying barren and no real work visible on them. For a very few that have, projects are generally for the construction of apartments, universities, hospitals, hotels and shopping malls, amongst other commercial enterprises. Money extracted from the state – through corrupt contracts – is often used to ‘invest’ in property-related investment-license issued projects, completing a double – exploitation of Iraqi state assets. Many investment commissions and their members work closely with corrupt Iraqi companies to take advantage of this state dysfunctionalism.

The distribution of ‘free’ land has meant that ‘investors’ need not purchase land from the private sector for their projects and can, instead, enjoy significant riches by turning public property into private gain. Indeed, members of investment commissions often compete with each other for ‘commission’ paid for issuing these licenses.

Effectively, as soon as an investment license is issued, the land that is distributed as part of that process becomes valued by the private sector, meaning that the public now turned private sector land is valorised and the license and the land it pertains to can be traded. Often, and before any work commences, these investment licenses become tradable commodities as they now have a commercial value and pass from one person or group to another. Because of this, one often sees that there are several parties to any investment license, which is an indicator of corruption.

The investment licensing structure across the country has been one of the most appalling and destructive processes witnessed over the past few years. Indeed, it would be a big lie to say that Iraq is ‘open to investment’ which is often unrealistically promoted by political elites.

The amount of investment capital into Iraq is marginally low whereas Iraq’s economy continues to be sucked dry by its neighbours through such processes, government contracts, corruption and an economy that is primarily based around imports and non-productive sectors.

The distribution of Iraqi public land and resources to illegitimate, deeply corrupt political parties, their members and companies, is one of the major crimes of post-2003 Iraq.

About Mehiyar

Dr Mehiyar Kathem is a researcher at University College London (UCL). Mehiyar completed a PhD at the School of Oriental and African Studies (SOAS) where he researched peacebuilding interventions and the formation of Iraq’s domestic NGO sector after the 2003 War. During this research, he looked at the gradual evolution of Iraq from totalitarian dictatorship through the country’s emerging domestic organisations. His research interests include statebuilding, civil society peacebuilding and the ways in which development, politics and money interact at a local level. In 2012 and 2013, Mehiyar conducted field research in Iraq for his PhD programme, spending a year meeting with and interviewing domestic NGO actors, political parties, government officials and international donors. Previously, Mehiyar worked on a number of grassroots programmes geared to build the capacity of civil society organisations and continues to advise international donors on the effective design and delivery of projects in Iraq. He tweets at @mehiyar

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