16 October 2018
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More turmoil in Iraq as deadly protests ravage oil-rich south

Friday, 20 July 2018 02:57
An Iraqi protester gestures near a burning tyre during a demonstration in Basra on July 15, 2018. An Iraqi protester gestures near a burning tyre during a demonstration in Basra on July 15, 2018.

Protests that began last week in Iraq are continuing amid widespread anger over abysmal public services provision by the government.

The unrest threatens to delay formation of a new government, mandated after Iraq’s elections in May, and has already led to break-ins to oil facilities and political offices.

First sparked in the oil-rich southern province of Basra and spreading to several cities including the capital Baghdad, Iraqis are voicing their frustrations over widespread unemployment, pollution, dirty drinking water and electricity failures during a stifling heat wave in the country’s south. While many of the protests have been peaceful, others have seen buildings set on fire, roads blocked and infrastructure damaged.

At least eight demonstrators have been killed so far amid a government crackdown, with scores of protesters and security forces injured; authorities have also carried out arrests, deployed water cannons and shut down the internet in several parts of the country.

Iraqi Prime Minister Haider al-Abadi, who came third place in last May’s national election, promised jobs and public funds for Basra in response, but has failed to calm anger among a public fed up with endemic corruption and a disconnected political elite 15 years into the war-scarred country’s democracy.

The protests come as a partial recount of Iraq’s election results is underway. The elections, which saw populist Shia cleric Muqtada al-Sadr win but failed to produce a clear majority for any party, had a record low turnout of 44 percent, reflecting much of the population’s disenchantment with politics.

Southern Iraq has lived in relative stability compared to the country’s northwest, which endured more than four years of brutal Islamic State (IS) occupation until it was largely defeated by Iraqi and coalition forces at the end of 2017. Because of this, regional experts say, residents expect more from their representatives.

Oil facilities targeted

Particularly acute is the demonstrators’ resentment toward the international oil companies reaping profit from Iraq’s hydrocarbons riches, which account for 95 percent of export receipts. Despite living in the heart of the oil industry, residents of Basra and Iraq’s south are some of the country’s poorest.

“Especially in Basra, where they know they live on most of Iraq’s wealth, people see these international oil companies (IOCs) and all this money coming in and out of their city yet they can’t even take a shower or get electricity for air conditioning,” Renad Mansour, a Middle East research fellow at Chatham House who recently spent time in the country, told CNBC.

Protestors are increasingly targeting oil facilities and so far have clashed with police outside West Qurna 2 and Zubair oil fields, said Nicholas Fitzroy, Iraq analyst at the Economist Intelligence Unit. “The protests are partly directed at foreign oil companies, with local tribes demanding that foreign oil workers be replaced by locals,” he said.

Although the importance of Iraq's oil production means public and private security forces will be heavily reinforced, Fitzroy added, “The scale of the protests means some low-level disruption to oil exports is likely at some point in 2018.”

A ‘cry for help’

Unrest in the port city of Basra, as well as around Iraq’s south and center, has flared up every summer since the Iraqi protest movement began in 2015 in response to crippling corruption, unemployment and a lack of services. Iraq is ranked 169th out of 180 states in Transparency International’s corruption perception index, with the lowest being the most corrupt.

Now, however, regional analysts say protests are more significant than before, revealing a loss of faith in the ability to enact change institutionally.

“They’ve gotten more attention and they are actually attacking political offices now,” including offices of the long-ruling Dawa party and the Iranian-backed Popular Mobilization Units, Mansour said.

“The cry for help and change is much stronger, and the government’s insecurity is also quite noticeable — that’s why for the first time the government has acted in killing and wounding protesters, blocking the internet, pursuing tactics they wouldn’t have in prior protests.”

Threat to oil production ‘minor’

Should the protests gather significant momentum, there could be some “minor operational disruptions” to oil production, said Christopher McKee, chief executive at risk analysis firm PRS Group.

“However, security around oil installations and supply routes is relatively robust, and the protesters themselves are not well organized,” he said, noting they also lacked the means to challenge Iraq's security forces.

“If anything, the protests, should they become more widespread, might force up the price of oil on fears of supply disruption but should do very little else.”

Iraq remains a “terribly risky place” for foreign investors, McKee added, despite macroeconomic and security improvements, so international businesses in the country are generally prepared for turmoil.

His risk analysis firm ranks Iraq in the highest risk category for social turmoil, the chief executive said. “Our political risk ratings in these areas have not materially moved from the high-risk category even following the elections and given the ‘weakening’ of IS in the region.”

Source: CNBC

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