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Security, [pic]Iraq

Date Posted: 06-Sep-2010

Jane's Sentinel Security Assessment - The Gulf States

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SECURITY

|[pic]Terrorism and Insurgency |

|     [pic]Terrorist/insurgent threat |

|     [pic]Political |

|     [pic]Religious Militant |

|     [pic]Sectarian militias |

|     [pic]Counter-terrorism |

|[pic]State Stability |

|     [pic]Political stability |

|     [pic]Social stability |

|     [pic]Economy |

|     [pic]Environment |

|     [pic]Separatism |

|[pic]Organised Crime |

|     [pic]Financial |

|     [pic]Trafficking |

|     [pic]Violent |

|     [pic]Countermeasures |

|[pic]International Relations |

|     [pic]Bilateral |

|     [pic]Multilateral/Regional |

|     [pic]Peace Processes |

|[pic]Proliferation and Procurement |

|     [pic]State legal |

|     [pic]State illegal |

|     [pic]Non-state legal |

|     [pic]Non-state illegal |

Terrorism and Insurgency           [pic]TOP

|The Iraqi government is recovering the monopoly over the legitimate use of force as the Iraq Army (backed by the Multi-National Force (MNF))|

|increasingly asserts itself as the leading military force in most locations. |

|Terrorist and insurgent groups have been whittled down to a hard core, with many less-committed elements pared away. Further reducing this |

|remaining cadre will be very slow and difficult. |

|Iraq has significant potential to become a regional hub for organised criminal elements. |

Terrorist/insurgent threat           [pic]TOP

The government of Prime Minister Nouri al-Maliki has been faced with serious internal violence throughout its term and this situation is likely to persist, albeit at far less intensive levels than in 2006 and 2007. Attack levels are down 90 per cent from the start of the US 'surge' (in which an additional 20,000 troops were brought into Baghdad and Al-Anbar province) and also due to the emergence of Sunni 'Awakening Councils' (or 'Sons of Iraq') militias, comprised of former insurgents who opted to abandon violence against the state in return for a promise to be included in military and security forces. Attacks on the MNF have also largely been reduced due to conflict fatigue, local truces, coalition engagement activities and the withdrawal of elements of the MNF itself. The number of foreign fighters entering Iraq dropped to fewer than 10 a month throughout 2009 and in the first half of 2010, compared to between 80 and 110 fighters per month in the first half of 2007.

| |Awakening Council members man a checkpoint in Baghdad, March 2009. (PA) |

| |1350399 |

The key problem since 2006 has been Iraqi-on-Iraqi violence. Whereas such violence had been primarily aimed at civilians and had a strongly sectarian nature in 2006 and 2007, the insurgency is increasingly taking the form of factional resistance to government security forces. Certain sections of the Sunni Arab community remain highly active insurgents, with attacks most prevalent in areas where a hard core of irreconcilable former regime elements (FRE) and Islamist militants pay networks of unemployed Iraqis to perform attacks. Sunni Arab resistance is particularly prevalent in areas where Sunnis fear Kurdish or Shia dominance.

Political           [pic]TOP

Former regime elements

Though it is difficult to disentangle the different strands of the Sunni insurgency, it is clear that irreconcilable Baathist FRE have played a key role in fomenting and facilitating anti-coalition and anti-government activities in Sunni-majority areas of Iraq. This network has lost its Baathist appearance, and perhaps much of its commitment to a Baathist return, but it continues to exist as a number of linked associates. FRE cadres include elements in exile in Damascus and eastern Syria, and Iraq-based networks, which mainly draw their power from Baathist structures that continue to exist in the Sunni triangle, the old presidential security triangle between Baghdad, Balad and Tikrit. The objectives of this fractious and loosely connected network are increasingly mercenary, although FRE elements are clearly committed to the expulsion of foreign and Shia and Kurdish security forces from core Sunni triangle areas. Indicators suggest that Syrian-based Baathist leadership figures have split into two major factions; one under Izzat Ibrahim al-Douri, and another under Younis al-Ahmed, who resides in Syria.

Although such Baathist notables appear to provide financial and networking support to the FRE effort, a stratum of former colonels and majors numbering in the high hundreds makes up the current leadership. FRE make two key inputs to the insurgency. The first is money (at least USD500 million of Baathist funds remains unaccounted for and the total in FRE hands is probably considerably higher), which is used to pay the incidental costs of the insurgency, to commission 'paid-for' attacks and to maintain loyalty relationships. The second is facilitation through a network of mid-level organisers and cash couriers drawn from the ranks of the various intelligence and regime security organisations, anchored at the local community level by fugitive Baath Party officials with strong tribal connections.

Since mid-2007, former Baathists have been re-integrated into national structures, particularly the Iraqi Army, the National Police and the Emergency Reaction Units at provincial levels. This is gradually splintering the moderate former Baathists from the irreconcilables. The passage of the Accountability and Justice Law in Iraq's parliament on 11 January 2008 will not substantially affect the outlook of the small cadre of senior Baathists that remain outside the political system. Full amnesty legislation has led to the release of large numbers of detainees into society as long as they have only attacked coalition personnel (as opposed to Iraqi forces or civilians). However, Iran's Shia protégés in control of the Accountability and Justice Commission ordered the banning of heavyweight Sunni candidates during the March 2010 parliamentary elections and intended to suspend other Sunni candidates who had been already elected. The ban caused a political storm that continued after the election, when the committee ordered that a number of other Sunni candidates be struck from the electoral list.

FRE networks facilitate entry into Iraq for secular and religious militants. They maintain strong ties with the Sunni Arabs of eastern Syria. This area retains close tribal links to the Sunni triangle and remains a Baathist stronghold after decades of falling under the footprint of Baathist television stations from Iraq. This community knows the long and largely open Iraqi-Syrian border better than anyone due to their economic dependence on cross-border smuggling. Once fighters are inside Iraq, FRE networks facilitate travel and meetings through a network of 'minders' that facilitate the movement of fighters, money and key bomb components. These are typically former members of the intelligence services, Special Republican Guard and Republican Guard or the former local Baath Party officials in each province. At the local level, FRE affiliates directly commission Iraqi resisters (criminals, the unemployed or the aggrieved) to carry out 'paid-for' attacks on foreign or government forces, often with bonuses for successful attacks. In many cases, FRE co-operate with local Sunni Arab militias that have previously entered into negotiations with the central government and which may eventually join the political process.

In addition to logistical support, FRE provide specialist technical skills such as bomb-making. These services were initially provided by junior elements of the Mukhabarat, the M-14 office (responsible during the Baathist years for assassinations) and the M-21 office (responsible for bombings). Such cells distributed large numbers of suicide vests at caches throughout Iraq from the beginning of Operation Iraqi Freedom, operating in 15 to 20 person 'Tiger Groups'. Acting as trainers, such specialists have created a broad base of bomb-making knowledge in the country. The bomb-makers they trained will never be short of raw materials in Iraq, due to the widespread distribution of munitions across the country. The Baathist component of the insurgent community has also demonstrated a strong grasp of the intelligence required to target critical infrastructure (oil industry and transport systems) at its most critical nodes and to infiltrate government facilities and assassinate government figures. During the March 2010 election, the Sunni-secular ticket of Ayad Allawi won the largest number of seats, 91. This helped further integrate the FRE into the political process. As such, violence in Iraq has become mainly the work of radical Islamist militants.

Religious Militant           [pic]TOP

Sunni extremist

Baathist diehards are difficult to untangle from the second rejectionist strand of the Sunni Arab community, the militant Islamist groups, with many former Baathists having joined militant Islamist movements, or appropriating religious rhetoric to operate within and exploit the radicalised Sunni Arab community. This strand of the resistance has survived the death of senior figures, including that of Abu Musab al-Zarqawi in June 2006, and is likely to continue operations for the foreseeable future. The grouping al-Zarqawi led is the principal militant Islamist grouping in Iraq, a network known as Al-Qaeda in the Land of the Two Rivers (Tanzim Qaedat Al-Jihad fi Bilad Al-Rafidayn), or Al-Qaeda in Iraq (AQI). AQI's purpose is jihad, the struggle against infidels and apostate Muslims (primarily Shia). The Mujahideen Shura Council of the Mujahideen in Iraq (SCMI) was established in January 2006 as an umbrella movement of militant Islamist groups that sought to confront the "Crusaders and their Rafidi (Shiite) and secularist followers who have seized Baghdad". The movement brought together six militant Islamist groups: AQI; the Jaysh al-Taifa al-Mansura; Ansar al-Tawhid; Al-Ghuraba; Al-Jihad al-Islami; and Al-Ahwal. Using both foreigners and Iraqis, these groups have carried out a range of suicide bombings and assassinations inside Iraq.

Zarqawi's death did not herald a noticeable change in militant Islamist strategy and tactics in Iraq, although the removal of this Jordanian leader provided an opportunity for AQI to present itself as an increasingly indigenous force. The movement has been seeking to apply an Iraqi face to its activities for some time. The former leader of AQI was Abu Ayyub al-Masri (also known as Abu Hamza al-Muhajir, or 'the immigrant'), who had come under harsh criticism from within AQI for failures of leadership. The virtual Islamic State of Iraq (ISI) is notionally led by an unseen figure known as Abu Abdullah al-Rashid al-Baghdadi (also referred to as Abu Omar al-Baghdadi), but this figurehead was claimed by US officials to be a fictional Iraqi character developed by al-Masri to hide the foreign-led AQI's control of ISI. There are signs that the al-Baghdadi nom-de-guerre has been attributed to more than one individual since 2006 as ISI has sought to dispel US claims that he is a notional figurehead or an Iraqi actor. However, in April 2010, it was announced that Iraqi intelligence forces had located and killed Abu Ayyub al-Masri and Abu Omar al-Baghdadi in an operation backed by US forces.

AQI's increasing alienation

Elements of the broader Al-Qaeda network appear eager for AQI to focus on ends rather than means by adopting objectives that include the intermediate aim of bloodying the MNF, and the long-term aim of expelling them and creating an Islamist state in Iraq. There are strong indicators of growing tension between the Sunni nationalist resistance and militant Islamist factions. The Salafists have been increasingly overt in criticising Sunni nationalists for taking part in the secular political process or security forces, and militant Islamist cells have begun to target senior Sunni community leaders and clerics that support such steps. Sunni nationalist cells such as the 1920 Brigades, the Anuman Brigades and the Islamic Mujaheddin Army have formed their own shura council to co-ordinate protective measures and retaliatory strikes against militant Islamist cells. The militant Islamist effort is becoming increasingly isolated from the Iraqi people and has displayed some loss of operational capability as a result of its loss of local safe havens. The movement has invested considerable effort in seeking to rhetorically defuse its feuding with Sunni Arab tribes. On 28 September 2006, al-Muhajir issued an audio recording offering reconciliation during the month of Ramadan and a chance to "repent" for past sins. The reconciliation effort was given further backing by Sheikh Harith al-Dari, the senior religious authority in the Association of Muslim Scholars. Some tribal confederations such as the al-Bu Baz appear to have accepted the reconciliation as a means of backing away from damaging feuds with formidable jihadist elements and used Ramadan to enforce a break in tit-for-tat killings.

They are increasingly focusing their efforts on cementing their new base in the Sunni triangle areas of the Tigris valley. These comprise Baghdad and the northern provinces of Diyala and Salah al-Din, with smuggling routes principally operating in the northwest from the Rabiya border crossing with Syria to Tall Afar and from there to Mosul. AQI has provided Iraqi insurgent groups operating in this area with specialised support (anti-helicopter capabilities for instance) and otherwise sought to weave itself into the fabric of the mainstream Sunni anti-occupation attacks.

However, residents in these areas appear to be increasingly turning against AQI as generally happened in Anbar after 2005 and in specific locations such as Fallujah and Ramadi in 2004. Residents have been alienated by AQI attempts to bring the population to heel through violent attacks, such as the use of chlorine bombs in populated areas. Local insurgent movements such as the 1920 Brigades have turned against AQI elements in Diyala, and the MNF has established a Diyala Salvation Front to mirror the Anbar Awakening Council of anti-AQI tribes in Anbar. The US offensive into the upper Tigris river valley since early 2007 appears to have dislodged AQI from Diyala and pushed its centre of gravity further up the Tigris to areas such as Balad, Tikrit, Kirkuk and Mosul. The organisation appears to be losing ground in all Sunni areas.

AQI may begin its transition into a true clandestine terrorist network of disparate cells based in Iraqi cities (particularly Kirkuk and Mosul) and utilising remote border crossings, largely cut-off from Sunni community support bases and allied movements within Iraq. AQI is likely to attempt to nest itself within the Sunni Arab communities in northern Iraq who are most threatened by Kurdish expansionism. In the latter months of 2007, AQI cadres were increasingly forced to operate out of northern Iraqi cities, as anticipated by many observers, and have focused their efforts on intimidating the Sunni Awakening movements. In 2008, they have gradually been pushed out into remote rural areas where there are fewer civilians to provide tip-offs to the security forces and where the much-reduced AQI cadres can dominate small rural communities. As of mid-2009, Mosul is the only major urban area in which AQI continues to try to hold terrain in order to keep its lines of communication from Syria to Baghdad through the Ninawa province intact.

A substantial drop in the number of civilian and MNF casualties between July and February 2009 further suggests that AQI has been significantly undermined in Iraq. January 2010 saw the death of 135 Iraqis, less than half the previous month, defying predictions of a rise of violence before the March elections. Also in January, the number of MNF troop deaths stood at zero, the lowest since the outbreak of the war in 2003. The number of MNF deaths stood at 7 for the months of March and April. However AQI proved that they were still a potent threat, when on 10 May 2010, more than 100 Iraqis were killed in a series of co-ordinated shootings and bombings that swept across the country.

Iraq saw a surge in AQI and other Islamist violence in mid-2010 after major parliamentary blocs, elected in March 2010, failed to form a government.

Sectarian militias           [pic]TOP

Iraq is a land awash with small-arms, heavy weapons and explosives. By law, citizens are allowed to own and keep a single assault rifle. The country is crosscut by strong sectarian and tribal factionalism. Under these conditions, it is inevitable that the country will be dotted with sectarian and neighbourhood militias. Elements of local and tribal communities from all sectarian blocs will remain fiercely protective of their local autonomy, as they were under Saddam Hussein's government

Shia

In the Shia community, the key armed bodies include the militant wing of the Supreme Iraqi Islamic Council or SIIC (formerly the Supreme Council for Islamic Resistance in Iraq or SCIRI), the Badr Organisation and Moqtada al-Sadr's Jaish al-Mahdi. It is increasingly difficult to characterise Shia militias as unitary blocs, particularly in the case of the loose confederation of militias that owe their spiritual allegiance to the martyred Mohammed Sadiq al-Sadr, the father of Moqtada al-Sadr.

Although SIIC has a highly centralised party apparatus, the Badr Organisation has become an increasingly loosely-knit network of local militias that often serve local power-brokers and engage in freelance criminal and sectarian violence. The discipline that SIIC built during its years in exile has frayed to some extent since the organisation returned to Iraq and absorbed huge numbers of Iraqis into its ranks. In the case of the Jaish al-Mahdi, the organisation was never more than a loose confederation of highly autonomous local militias.

The Sadrist uprising of 2004, although initiated by the leadership cadre of Moqtada al-Sadr, quickly grew beyond the direct control of Sadr's organisation and undermined the loose control he held over the Jaish al-Mahdi, resulting in uprisings with little centralised control. Individual chapters of the Jaish al-Mahdi undertook violent crime, engaged openly in drug dealing and recruitment, striking deals with foreign agents or choosing to honour temporary truces with the Iraqi government and the Multi-National Force according to local needs.

From early 2007, the Baghdad security plan put the Jaish al-Mahdi under considerable pressure, and forced its mainstream militia leaders to maintain a low profile while coalition (and in some cases SIIC) forces rooted out Sadrist death squad and bomb-making personnel. Since mid-2007, Sadr has sought to re-centralise and politicise his disparate movement by keeping Jaish al-Mahdi on ceasefire, but his success has been patchy. The movement's hard core anti-occupation and anti-Sunni elements will likely lay low and return - either from exile in Iran, areas outside Baghdad or from being embedded in Iraqi Army units - with their basic proclivities unchanged. Across the nine southern provinces, Sadrist and SIIC forces contend violently for local control, with SIIC's relative success in holding governorships allowing the use of MNFs to suppress Sadrist groups in local factional fighting.

This situation is approaching a slow-burning Shia civil war, which exploded into widespread violence in March 2008, when Iraqi government forces launched an offensive against the Jaish al-Mahdi in Basra and Baghdad, displacing much of its control across neighbourhoods. Since then, Sadrist militiamen have suffered defeats and evictions in Baghdad (including Sadr City) and in Maysan province, from which many of the Sadrist tribes tend to originate. As of 2010, the Jaish al-Mahdi has maintained its ceasefire.

During provincial elections in January 2009, the Sadrists were defeated in a result that indicated the level of popular discontent with Jaish al-Mahdi. Since then, al-Sadr and his associates have been attempting to restore their popular appeal. Consequently, the Sadrists have allied with SIIC for the March parliamentary elections as part of the Iraqi National Alliance (INA), a move that has defused much of the tension between the groups. Meanwhile the leader of Badr Brigade, Hadi al-Ameri, is a candidate for the INA, signalling that the Badr may finally have decided to transform itself into a political rather than military entity. Moreover while Moqtada Sadr is now in Qom, Iran continuing his religious studies, a radical faction - Asaib Ahl al-Haq (League of the People of the Truth) - has emerged under one of his former associates, Qais Al-Khazaali, and is backed by what the US military terms special groups (a phrase that is usually taken as referring to Iran). Al-Khazaali was released in January 2010, in exchange for his group's release of British hostage Peter Moore, in December 2009. In February 2010, Asaib Ahl al-Haq kidnapped US contractor Issa Salomi, although he was released the following month.

The Sadrists made a strong showing in the March 2010 parliamentary election, winning 40 out of parliament's 325 seats, making them the second biggest Shia bloc after Maliki's State of Law. On 23 April, five bombings targeted four Shia mosques and resulted in the death of more than 30 civilians. From his residence in Qom, Iran, Moqtada al-Sadr called on Jaish al-Mahdi to protect Shia religious sites, although this did not result in the reactivation of the militia.

Kurdish

In the Kurdish community, militias are deeply embedded safeguards against central government aggression as well as features of the internal power balance between the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK). Although such militias may claim to be folding their troops into central government security forces, individual affiliations remain to their sectarian blocs and the few functional Iraqi National Guard units are little more than thinly veiled sectarian militias. Smaller communities also maintain unofficial militias. For instance, Iraq's Turkoman have developed militia forces with training and support from Turkey. Over 100,000 peshmerga were incorporated formally into the Iraqi security forces by the end of 2008; the remaining 46,000 were incorporated into a Kurdish Regional Government (KRG) force that the federal government will fully subsidise. In 2008 and the first half of 2009, tensions between the Arab and Kurdish blocs were mirrored by stand-offs in disputed areas like Khanaqin and the Khurmala Dome oilfield between the Iraqi Army and peshmerga forces.

Sunni

Sunni militias are less formally organised and have not historically been tolerated in the same way as Shia, Kurdish or Turkoman militias due to their lack of affiliation with established Sunni Arab political parties and because of their involvement in anti-coalition activities. Such Sunni militias are likely to exist as long as the community feels itself threatened and disenfranchised and it will be many years before Iraq's Sunni Arabs come to a community-wide acceptance of their demographic and political minority status. Communities reliant on smuggling, such as those abutting the Syrian and Jordanian borders in Anbar province, will continue to resist the extension of power by Baghdad, regardless of whether or not MNF troops are in Iraq.

That said, Sunni militias are increasingly being treated more like Shia and Kurdish militias by the government and US forces, beginning with their role in security operations during the referendum and elections of late 2005. Such militias provide neighbourhood patrols, law enforcement and facility protection (for example petrol stations and other key points) and are gradually being convinced to join the federal security forces. Although reduced levels of anti-coalition attacks have continued in Baghdad, Anbar and Diyala, many Sunni militias have undertaken robust actions against militant Islamist terrorist groups. The drawdown of US forces in Sunni areas through 2008 and 2009 has led to fewer anti-occupation attacks and increased integration into Iraqi Army units and provincial security forces.

US-paid Sunni Concerned Local Citizens (CLC) or 'Sons of Iraq' groups have emerged across central and northern Iraq, and such groups will likely remain inactive as insurgents as long as either the US or Iraqi governments continue to fund them or find them alternative employment. Some elements are being incorporated into the security forces and others have become incubators for nascent Sunni political blocs, which performed strongly in the provincial elections of January 2009. In some areas where such movements threaten Shia control (Diyala, Baghdad), the CLCs have been undercut by government harassment. In other areas, where the federal government backs the Sunni Arabs against Kurdish expansion (Mosul, Kirkuk), the CLCs will be backed. In the south, they have been discouraged, with alternative tribal councils and direct recruitment to the security forces preferred.

The durability of the CLC's commitment to co-operation with the Iraqi state was questioned on 28 March 2008 when the Iraqi Army arrested Adil al-Mashhadani, head of a local Sons of Iraq group in Baghdad, on criminal and terrorism charges. Militiamen loyal to Mashhadani staged a two-day uprising in Baghdad's Fadhil neighbourhood that was put down by the Iraqi and US militaries. According to a US intelligence official, the Iraqi central government was concerned the uprising would spread and other leaders of Sons of Iraq groups would lead their men in violent insurrection once again, and there was relief when the violence did not spread. The ill-fated uprising could be considered confirmation that the civil war between Sunnis and Shias is highly unlikely to recur; not because of any reconciliation process or political settlement - neither of which have happened - but because the Shia victory was definitive and the Sunni militias were crushed.

Counter-terrorism           [pic]TOP

|Iraq counter-terrorism environment |

|Counter-terrorism Intelligence Capabilities |3 |

|Size and Resources |4 |

|Expertise and Capabilities |3 |

|Understanding of Threat |3 |

|Sympathies/Orientation |2 |

|  |

|Frontier Security |2 |

|Border Security |2 |

|Coastal/Port/Airport Security |4 |

|Unregulated Migration |1 |

|  |

|Legal Environment |4 |

|International Co-operation |3 |

|Public Co-operation |2 |

|Grade from 1-5. 1 = Lowest 5 = Highest |

The Iraqi government operates a tiered approach to armed groups within Iraq. Formalised militias associated with large sectarian factions (for example the KDP and the PUK) are not subject to any form of government control but represent the most reliable paramilitary forces available to the central government. A second tier of threat actors, such as local Sunni Arab militias and the Jaish al-Mahdi (JAM) militia, are subject to paramilitary treatment when they undertake anti-government activities and are subject to close observation at all times. The Iraqi government has taken steps to split anti-government forces by showing a nuanced ability to differentiate between irreconcilables and those who will accept amnesty and alternative employment.

Some success has been achieved in drawing unofficial spokesmen of the Sunni Arab community (from groups such as the Association of Muslim Scholars: AMS; and the Iraqi Islamic Party: IIP) into the political process, and in convincing such umbrella movements to condemn certain actions (for example mass casualty bombing attacks and the fostering of sectarian discord). Under Maliki, the Iraqi government has committed to a major amnesty programme for large swathes of the nationalist insurgent community. The third class of threat actors includes Iranian-backed Shia 'special groups', the hard core of Sunni Baathist insurgent factions and all militant Islamist terrorists. The Iraqi government believes that these types of adversary can only be dealt with using paramilitary tools.

Now that the Multi-National Force's role has diminished to its minimum, key enablers (such as intelligence, special forces and air support) will remain in place for many years. As Iraq's security forces grow, their ability to saturate areas after they have been cleared (instead of immediately leaving them) should also improve. The Iraqi Police Service (IPS), currently suffering epidemic levels of attack by insurgent forces, will be key to making control of neighbourhoods permanent in the long-term.

| |Routine police searches are a valuable, albeit low-level, counter-terrorism tool, although questions remain over the effectiveness |

| |and loyalty of some police units. (PA) |

| |1134633 |

The Iraqi security services officially numbered nearly 660,000 personnel in August 2010. These include more than 300,000 Ministry of Defence personnel, including army, air force and navy personnel, plus 40,888 border guards. There are also nearly 350,000 Ministry of Interior personnel, comprising IPS and other forces (National Police). At the local level, the IPS is part of the problem as often as it is part of the solution due to its local recruitment by factional leaders in provincial governance. National Police units have been fairly successfully 're-blued' (vetted and reorganised) so that they do not present a sectarian risk to one social faction or another, and so that they are an additional mobile reserve for the government. An additional source of manpower are the 'Sons of Iraq' police auxiliaries raised in association with the 'Awakening' tribal and community councils. In 2009, just over 100,000 Sons of Iraq were employed, with 72,000 funded by the US military commander's Emergency Response Programme (held and dispensed at the brigade level).

The Ministry of Interior also runs the Facilities Protection Service (FPS) and Oil Police units guarding key infrastructure. These units are undergoing extensive re-blueing to reduce militia penetration. In 2009, the Oil Police numbered around 30,000 while according to a US Congressional report in October 2009 the strength of the FPS numbered 90,000.

August 2010 saw the withdrawal of the last US combat brigade from Iraq, leaving behind 50,000 US troops stationed mainly on US military bases. The six remaining US Army brigades, plus support personnel, will work with Iraqi security forces until the end of 2011, when all US troops will leave Iraq. Soldiers with these units will be advising, assisting, teaching and mentoring the Iraqi Army and police in a range of capabilities. US Air Force personnel will continue to help in training the Iraqi Air Force, while navy and coast guard personnel will continue to advise and assist Iraq's maritime forces.

State Stability           [pic]TOP

|Central governance in Iraq is weak and highly dependent on oil export revenue, but the state is slowly regaining the monopoly on armed |

|paramilitary forces, although sporadic large-scale attacks continue to occur. |

|The fabric of Iraqi society is under attack by ongoing sectarian rivalry and violence and dissolving elements such as crime and a lack of |

|economic opportunity. |

|The government lacks simple near-term solutions to any of its problems. It must risk inflicting economic pain on the population to correct |

|structural problems in the economy and highly-devolved federalism is the extreme but perhaps inevitable means of holding the country |

|together in a loose confederation. |

Political stability           [pic]TOP

Governance

Iraq has a 325-member parliament, the Council of Representatives. Laws are passed by a simple majority and parliament is quorate when at least 163 members are present.

The March 2010 election resulted in a parliament split between the following groupings: Ayad Allawi's Sunni-backed secular Iraqiya ticket (91 seats); Prime Minister Nouri Al-Maliki's State of Law Coalition (89 seats); the Iraqi National Alliance (70 seats; 40 Sadrist, 23 Supreme Iraq Islamic Council, former prime minister Ibrahim Jaafari and politician Ahmed Chalabi); the Kurdistan Alliance (43 seats); the Kurdish opposition Change (eight seats); the Sunni Accordance Front (five seats), Iraqi Unity party of Shiite Interior Minister Jawad Bolani and Sunni Awakening Council leader Ahmed Abu-Risha (four seats); Kurdish Islamic Brotherhood (three seats); Kurdish Islamic Union (three seats); Christians (three seats); Assyrians (two seats) and one seat for each of the Ezidi, Shabak and Sabean communities.

| |Ayad Allawi's supporter's celebrate his election victory in March 2010. (PA) |

| |1399315 |

Parliamentary seats are distributed over Iraq's 18 governorates as follows: Baghdad (68), (31), Basra (24), Dhi Qar (18), Babel (16), As Sulaymaniyah (17), Anbar (14), Arbil (14), Diyala (13), Salahiddine (12), Najaf (12), Kirkuk (12), Wasit (11), Diwaniya (11), Maysan (10), Karbala (10), Dahuk (10), Al Muthanna (7). Seven seats are compensation seats reserved for the diaspora vote, while eight seats are reserved for the minorities of the Christians, the Yazidis, the Shabak and the Sabeans.

After the election, Iraq is most likely to see the creation of a sprawling super-coalition that emerges either by accident or by design. It may begin as an anti-Maliki alliance, a Shia-Kurdish alliance or even a nationalist alliance, but it will probably end by incorporating elements of all the main political coalitions. This super-coalition's primary role would be to elect an Iraqi president and ratify a package deal concerning the appointment of the prime minister and cabinet. Thereafter, the ties that bind this super-coalition could quickly erode and become a weak form of association. Politics would thereafter be a game of case-by-case coalition-building whenever a new raft of legislation needed to be collectively tackled. Disrupted governance, limited prime ministerial authority, corruption and ongoing Iranian influence would all be features inherent in this type of system, although the gradual stabilisation and economic recovery of Iraq will not be reversed. The prospect of sweeping political change such as a new nationalist super-coalition are limited during the coming government, but such factions are likely to collaborate throughout the next government, building long-term pressure for the consolidation of nationalist elements in Iraq. In time, such a nationalist super-coalition probably will occur, and a collection of legislators will collectively mobilise throughout the new government's term in numerous test-runs of nationalist voting power.

Civil-military relations

There is considerable scope for re-centralisation and authoritarianism in post-Saddam Iraq. The first step along such a path would be the identification of a strong leader who was viewed as cross-sectarian, with former prime minister Ayad Allawi representing an archetype of this kind of politician. Such a leader would need at least one dependable security organ. The Iraqi Army is quickly strengthening and maintains the confidence of the people due to its deep cross-sectarian roots in Iraqi society plus ongoing US influence over army units. Even the relatively weak Maliki has been successful in centralising security decision-making on his office, and it may be even easier for a more charismatic and forceful premier to extend his power in the future.

Throughout 2007, it is arguable that the federal government managed to re-centralise a considerable amount of coercive military power. The huge growth of the Iraqi Army and the development of new operational commands and special forces groups directly commanded by the prime minister pose interesting civil-military issues in a country with a long history of military domination over civilian government. The transition to police primacy and provincial control over security is being continually pushed back, with the Iraqi Army and its operational commands threatening to become a semi-permanent tool of central government control in the provinces, with considerable political clout.

Economic

In structural terms, Iraq's economy continues to lack revenue diversity and is vulnerable to various types of economic shocks, including the late-2008 steep drop in international oil prices. A drop of USD1 in oil prices could potentially reduce Iraq's budget by up to USD1 billion. Oil sits at the heart of the key economic issues and the government plans to increase oil production almost two-fold. Oil revenues account for 70 per cent of gross domestic product (GDP) and 95 per cent of government revenues. Production averaged about 2.5 million barrels per day (bpd) at the end of October 2009, with exports estimated at 1.93 million bpd. High oil prices have sustained oil smuggling; at around USD.023 per litre, it remains immensely profitable to export cheaply-bought domestic oil onto the high-price world markets.

By the end of April, Iraqi oil production stood at 2.4 million barrels per day (bpd), with exports estimated at 1.93 million bpd. Oil production was 2.58 bpd before the war in 2003.

The benefits of oil-richness have so far been absent in post-war Iraq. Low government capacity to spend has meant that oil receipts have sat in currency reserves when they should have been rebuilding shattered power, water, sanitation, telecommunications, transportation and oil derivatives infrastructure.

| |Map of Iraq showing regional attack variations and oil infrastructure 2008-2009. (IHS Jane's) |

| |1187436 |

The oil sector is slowly developing. The government has proved willing to use Saddam-era oil legislation until new hydrocarbon legislation has been passed. On the back of five years of ad hoc technical fixes involving foreign companies, six Technical Service Agreements were to be formally awarded in June 2008 but the deal collapsed and the drilling and well-workover projects are now being individually tendered. A second oil and gas licensing round, initially yielding only one sale, ended in June 2009 with the award of six oil fields and two gas fields. A third licensing round took place in December 2009, when the government held an auction, and later assigned, 10 of its biggest, largely undeveloped, oil and gas reservoirs.

The global financial crisis has also affected Iraq, causing the budget to be cut from USD80 billion in 2008 to USD67 billion in 2009, with USD15 billion allocated for investment in the country's infrastructure. However, before the 2003 war, Iraq's annual budget did not exceed USD4 billion.

Societal

Civil disobedience, protests and the formation of political parties have complex effects on political stability in Iraq. Muscular political and sectarian blocs with armed militias act with some autonomy. Protests are often launched to pressure other political blocs directly rather than to pressure the government, although protests against cuts to government subsidies are likely to proliferate in the future.

The highly autonomous activities of municipal and provincial governments are another emerging trend in Iraqi political stability. Local de-selection of central government-appointed officials is commonplace. Oil-rich provinces such as Basra have made regular calls for increased autonomy from the central government, and have sought to unilaterally impose taxation on oil revenues at the source or to hold back a disproportionate share of electricity generation for local use.

Social stability           [pic]TOP

Crime

Iraq experienced growing low-level non-organised crime in the 1990s as sanctions and economic stagnation hollowed out the middle classes, reduced living conditions and removed legitimate mechanisms for economic enrichment in Iraq. A steep rise in prostitution was a notable indicator of collapsing local economies. Following Saddam Hussein's 2002 release of criminals from Iraq's jails and the end of Baathist rule on 9 April 2003, law and order experienced a complete collapse, resulting in a massive redistribution of almost any commodity, fixture or fitting. This included the destruction of buildings as bricks were looted for re-use. As well as highly organised looting of banks and museums by regime security forces, this period of looting normalised criminal activity for a considerable period of time, creating huge markets for looted items, diverted oil products and copper wiring stripped from the country's electricity transmission grid and phone network. As the price and availability of these commodities and others such as cars and fuel has stabilised, so the incidence of looting, sporadic car-jacking and attacks on petrol stations has receded.

Drugs

Like most transit countries, Iraq is experiencing growing drug addiction problems. The Ministry of Health has warned that drug abuse is rising steadily among men and women of all ages in Iraq, especially in the capital Baghdad and in the south of the country. Unemployment, underemployment and trauma are key drivers of growing drug abuse. The Ministry of Health reports that the number of registered addicts in suburban Baghdad has rapidly increased in recent years, including a rise from 3,000 in 2004 to over 7,000 in 2005. In municipalities outside Baghdad, the number of registered drug addicts has tripled, or in places such as Karbala, increased ten-fold. A rising proportion of addicts are involved in local drug peddling and petty crime to support their habits.

Health

Before August 1990, the health care system in Iraq was based on an extensive and developed network of primary, secondary and tertiary health care facilities linked by a large fleet of ambulances and service vehicles, and by a good communications network facilitating referral to the next level of the health care system. At its pre-1990 best, the system gave 97 per cent of urban and 79 per cent of rural Iraqis access to advanced health care. Despite US-funded efforts to construct and equip primary health care clinics throughout the country, access to health care remains well below 1990 levels.

Insufficient Ministry of Health funding (annual budget of USD1 billion, or about USD37 per Iraqi citizen) and slow disbursement of US aid have reduced the impact of curative and preventative health care. Underpaid, unpaid and overworked medical staff are beginning to succumb to the 'brain drain' that is affecting other portions of the Iraqi economy. An estimated USD4 billion is needed to renovate Iraq's dilapidated medical buildings and additional funds are needed to prevent the current shortfalls of basic medications and chemicals (which greatly reduce the number of major surgical interventions and access to laboratory services). Perhaps the most rapid progress has been made in the fields of preventative public health activities such as an expanded programme of immunisations and tuberculosis control activities. Though underdeveloped and sabotaged water and sanitation systems continue to pose a risk to public health, the Ministry of Health has re-established a national disease surveillance and response system to minimise the spread of epidemics and up to 95 per cent of Iraqi children have now received key immunisations.

Demography

Iraq has a fast-growing, young population. About 40 per cent of Iraqis are under the age of 15. In ethnic terms, Arabs make up 75 to 80 per cent of the population, Kurds a further 15 to 20 per cent, with Turkoman, Assyrians and other ethnicities making up the balance. An estimated 97 per cent of the population is Muslim (Shia 60 to 65 per cent, Sunni 32 to 37 per cent) and most of the balance is Christian. These demographic trends are unlikely to see significant shifts in the foreseeable future. Until civil society develops sufficiently and Iraqis politically affiliate at levels other than their 'primary identity' (ethnicity, sect), the demographic balance will be a direct indicator of the political power balance.

Human rights

The constitution ratified on 15 October 2005 offers few unqualified rights to Iraqis, and instead leaves the interpretation of vaguely-defined human rights provisions to future national and regional parliaments to decide. Under the draft constitution, multi-province regional governments such as the Kurdistan Regional Government (KRG) can choose to wield greater legal and executive powers than the federal government. The potential for parallel national and regional systems could allow the regions to opt-in or opt-out of much national policy based on their interests. This presents a risk of conflicts between the human rights of Iraqis (particularly Iraqi women) and the strictures of sharia (Islamic law) and tribal custom. The Supreme Federal Court (the members of which require a cross-sectarian two-thirds majority to be elected by parliament) will theoretically mediate in disputes between federal and regional governments.

The basic human rights of Iraqis are also threatened by other aspects of the Iraqi political environment. Throughout the country, the chaotic security situation encourages abuses of human rights in the course of counter-insurgency operations and by government security forces acting on militia instructions in local power plays. In the KRG zone, there are growing concerns about authoritarian measures taken against civil society advocates who have sought to develop new political parties that might compete with the KDP and PUK. During KRG parliamentary elections in July 2009, Nashirwan Mustafa defected from the PUK to spearhead a new Kurdish opposition party, which won 25 seats in the KRG's 111-seat parliament. During the March 2010 election, Mustafa's Goran (Change) ticket won eight seats, as the Kurdish bloc shrank from 53 to 43 seats. The emergence of an opposition group to rival the KDP and PUK political monopoly suggests that greater political freedom and plurality is taking hold in the KRG.

According to the 2010 US Department of State's Human Rights report, the following "significant human rights problems were reported: arbitrary or unlawful killings; insurgent and terrorist bombings and executions; disruption of authority by sectarian, criminal, and extremist groups; arbitrary deprivation of life; disappearances; torture and other cruel, inhuman, or degrading treatment or punishment; impunity; poor conditions in pre-trial detention and prison facilities; denial of fair public trials; delays in resolving property restitution claims; immature judicial institutions lacking capacity; arbitrary arrest and detention; arbitrary interference with privacy and home; other abuses in internal conflicts; limits on freedom of speech, press, assembly, and association due to sectarianism and extremist threats and violence; limits on religious freedom due to extremist threats and violence; restrictions on freedom of movement; large numbers of internally displaced persons (IDPs) and refugees; lack of protection of refugees and stateless persons; lack of transparency and significant widespread corruption at all levels of government; constraints on international organisations and non-governmental organisations' (NGOs) investigations of alleged violations of human rights; discrimination against and societal abuses of women and ethnic and religious minorities; human trafficking; societal discrimination and violence against individuals based on sexual orientation; and limited exercise of labour rights".

Economy           [pic]TOP

Black economy

The 9 October 2003 joint UN/World Bank Needs Assessment estimated that a majority of working Iraqis are employed in the non-taxable informal economy and this has probably not changed in the intervening years. With porous borders, embryonic import regulation, skyrocketing demand for foreign goods and subsidised fuels, Iraq is a thoroughfare for non-taxable incoming consumer goods and outgoing fuels.

Single source reliance

Iraq will remain overly dependent on oil revenues for the foreseeable future. Oil exports have traditionally represented about 95 per cent of foreign exchange earnings, leaving Iraq vulnerable to year-on-year budgeting instability and chronic revenue shortfalls during extended periods of depressed oil prices. Non-oil GDP is growing slowly, not least due to the poor performance of the state-dominated manufacturing sector. Iraq's service sectors are likely to be the fastest growing elements of the newly opened non-oil economy. Telecommunications, motor vehicles, consumer goods, hotels, security and construction are likely to account for the majority of non-oil sector growth.

Financial collapse

The risk of a collapse of the formal economy or major financial institutions is very low, despite reports from the International Monetary Fund (IMF) that Iraq urgently needs to increase investment (particularly in the oil industry) and carry out structural reforms aimed at reducing inflation (which has felt the pressure of key commodity shortages). Balance of trade moved into a comfortable surplus by 2007 and Iraq now has an estimated USD50 billion in various UN-administered escrow accounts in New York. Iraq's economic recovery is arguably less dependent on foreign aid than was considered to be the case in the 2003-2005 timeframe. International aid (excluding US aid) is not a critical factor in Iraq's reconstruction. The issue for Iraq is not a lack of money, but an inability to spend it fast enough in a manner that generates sustainable economic development and growth.

In terms of foreign debt, USD74.1 billion of Iraq's overall USD120.2 billion foreign debt has been forgiven. The Paris Club cancelled USD42.3 billion, including Russia's USD12 billion. A number of non-Paris Club members have cancelled a total of USD8.2 billion on Paris Club terms. A total of USD16 billion has been cancelled by commercial creditors, also on Paris Club terms. Iraq owes USD56.6 billion to USD79.9 billion of remaining debt, including USD7.6 billion of outstanding Paris Club debt, USD32.4 billion to USD55.4 billion of Gulf Co-operation Council (GCC) debt, and USD15.9 billion to USD16.2 billion of other non-Paris Club debt.

Labour

Iraq's labour market is stable and includes significant spare capacity to cope with future economic expansion. Data provided by the Central Intelligence Agency suggests that Iraq's working-age population is 14.8 million. Not every Iraqi of working age is seeking employment. Some men are outside the labour force (for instance students and the disabled), and a lower proportion of women have traditionally sought work outside the home. The potential labour force is therefore probably in the range of eight million. Taking into account government employment, aid-generated jobs and private sector or informal economy employment, unemployment in Iraq is unlikely to be higher than 25 to 30 per cent of this eight million total. Underemployment is an equally serious problem, with large numbers of Iraqis employed in unnecessary government sector jobs, working part-time, or claiming salary but failing to show up for work.

Environment           [pic]TOP

Natural degradation

Iraq faces a range of environmental problems. In the sphere of water management, the key risk is the adverse downstream impact of large dams in the upper Tigris and Euphrates basin, necessitating agreements with upstream riparian Turkey. Other water-related concerns include reversing two decades of deliberate drainage of the Mesopotamian marshes by the Baathist government, severe contamination of surface water by sewage and other waste, inadequately maintained and war-damaged water distribution network, and land salinisation and waterlogging due to unsustainable irrigation practices and poor maintenance, as well as potential contamination of ground water by oil spills. Iraq faces a high risk of desertification exacerbated by unsustainable agricultural practices, overgrazing, and land degradation from military movements and use of munitions. The Shatt al-Arab waterway requires considerable environmental rehabilitation.

In the sphere of waste management, Iraq is threatened by absent or poorly functioning systems for the collection, treatment and disposal of all types of waste, exacerbated by the ongoing conflict and the impact of sanctions. Iraq faces long-term health and environmental risks from uncontained domestic landfills and hazardous industrial waste (especially from the oil industry), as well as from large quantities of military waste (unexploded ordnance, destroyed vehicles and packaging). Iraq's oil industry needs to incorporate environmental controls into its operations for the first time to prevent widespread oil contamination of surface water and ground water.

Separatism           [pic]TOP

Iraq should not be characterised as a state on the verge of secessionist break-up, but rather as a thoroughly devolved state that is seeking a formula that can draw its various communities back together again. Far from being a centrifugal instrument that will pull Iraq apart, federalism may generate the gravity that allows Iraq's disparate communities to remain together during these tense post-Saddam years. Developed largely by the Shia and Kurdish blocs, the draft constitution proposes a very strong form of federalism to paper over many of the fundamental issues that could not be agreed upon by these two factions. The result is a constitution that makes it possible (but difficult) to form other regional governments similar to the semi-autonomous three-province KRG, an arrangement that has effectively removed the impetus for the Kurdish people of northern Iraq to seek formal secession. Each of these regional governments can choose to wield greater legal and executive powers than the federal government.

Organised Crime           [pic]TOP

|Iraq is becoming a thoroughfare for all forms of organised criminal activity and trafficking. |

|Violent crime presents an ever-present threat to anyone operating in Iraq and constitutes a prime concern for Iraqis. |

|The formation of an effective police service is critical to reversing these trends, yet development of this force is many years away, |

|allowing organised crime time to consolidate its foothold in Iraqi society. |

Financial           [pic]TOP

Iraq's banking system is sufficiently underdeveloped and inefficient that it is not widely used by Iraqis and the number of banks remains small, reducing the ability of criminal transactions to sink into the anonymous mass of banking activity. Banking reforms are unlikely to alter this state in the near-term, particularly bearing in mind the slow development of the formal economy and foreign investment. Iraq will remain a cash economy, with long-distance movement of cash taking place either by physically moving cash using couriers, or through hawala money transfer systems. The hawala system is particularly busy in Iraq, due to the superior service offered in comparison to the formal banking system (a 0.05 per cent fee and instantaneous transfer at hawala, versus three per cent fee and 10-day transfers at banks) and due to the large number of Iraqi businesses with satellite offices in safer business hubs like Jordan. With larger hawala agencies handling between USD1 million and USD3 million a day, and leaving little by way of a paper trail, the system could be effectively used by insurgents and criminals. Hawala dealers recognise that their ability to 'know the customer' is very limited, at least with regard to the very large numbers of smaller transactions into which insurgents and terrorists would merge.

Trafficking           [pic]TOP

Arms

Iraq has the potential to become a major arms trafficking point of origin. The weapons and explosives proliferation risk posed by post-Baathist Iraq is rooted in the massive militarisation of the country's industrial base during the Saddam era. In an effort to build long-term independence from external suppliers and to develop an arms export industry, Iraq spent USD14.2 billion, or 29.4 per cent of its imports, on the development of its military industries in the years 1982-1989. By 1990, Iraq emerged from the Iran-Iraq War with 40 per cent of Iraqi industrial workers employed in the country's military industries. By 1987, Iraq was largely self-sufficient in the production of small-arms ammunition, rocket-propelled grenades (RPG), mortar and artillery shells and aircraft bombs.

Fear of ammunition shortages during wartime also led the Saddam-era military to widely disperse its munitions throughout the country at likely defensive positions during the 1990s. This policy was taken to extremes before and during Operation Iraqi Freedom, witnessing the distribution of an estimated 650,000 to one million tonnes of weapons and explosives throughout the country. In addition to Iraq's well-known arms depots (some of which covered over a hundred square kilometres), over 10,000 forward ammunition supply points were created in schools, hospitals, mosques, fields and warehouses. Finally, an unknown number of small dispersed weapons caches were sewn throughout the Euphrates and Tigris river valleys along likely coalition routes of advance and throughout the Sunni triangle. Iraq Survey Group findings indicate that statistically the vast majority of arms caches are small stores consisting of less than a tonne of small-arms, RPGs, artillery shells and landmines.

In addition to these deliberately cached weapons, masses of military equipment and unexploded ordnance littered Iraq following the end of Operation Iraqi Freedom, either consisting of the wreckage of battles in the Basra-An Nasariyah and Samawah-Baghdad environs, or the large abandoned arsenals of the Iraqi corps that surrendered intact in the north, northeast and southeast of the country. By various accounts, there remain between 100,000 and 450,000 tonnes of armaments still unaccounted for within Iraq and while much of this will have been destroyed or rendered into scrap metals, vast quantities are still in existence. Armaments from Iraq have already begun to trickle out of the country, whether as complete weapons systems sold to Iran by Kurdish arms dealers or in the form of explosives and weaponry intercepted on the Saudi Arabian-Iraqi border bound for the kingdom.

Human

According to the US Department of State's Trafficking in Persons Report 2010 Iraq is both a source and destination country for men, women, and children trafficked for the purposes of commercial sexual exploitation and involuntary servitude. Iraqi women and girls are trafficked within the country and abroad to regional states for forced prostitution and sexual exploitation. In some cases, women are lured into sexual exploitation through false promises of work or through sale or forced marriage. Furthermore, when trafficked by persons other than family members, women are placed at risk of honour killings if their families learn that they have been raped or forced into prostitution. Iraq is also a destination country for boys and men trafficked to and from countries in the region and further afield in South and South East Asia.

Drug

Drug trafficking, although not new in Iraq, does appear to be growing in scale and complexity. Iraq already functioned as a transit route for drugs from central Asia even under the Baathist regime, with shipments from Iran and Turkey transiting westwards towards the Mediterranean or southward towards the Gulf Co-operation Council (GCC) states. Key elements of the Mukhabarat (now embedded in the resistance) were complicit in drug smuggling. In the post-Baathist context, almost tax-free imports resulting from economic stimulus measures have thrown open Iraq's borders to increased smuggling of illegal contraband.

According to the UN Office of Drugs and Crime (UNODC), drugs smuggling through Iraq now principally uses two routes. The northern route sees drugs enter through Iran and then move through Turkey, the Balkans and towards Western Europe. The second route runs from Iran to the southern Iraqi port of Umm Qasr, where it transits alongside illegally tapped oil and looted copper into the GCC states. Other drugs shipments move across the expansive and unguarded Saudi-Iraqi border. Another driver towards greater narcotics and contraband smuggling through Iraq has been the significant increase in Iranian pilgrims visiting Shiite shrines in Najaf and Karbala. This flow encouraged Iranian drug smugglers to begin using the pilgrim route as a transhipment artery. Since September 2003 a number of Iranian 'pilgrims' have been apprehended with consignments of drugs, principally hashish.

Oil

Oil smuggling and black-marketeering remains the most widespread form of revenue generation. These activities, businesses the former regime knew much about, will continue to be a money-spinner for private criminals and local militias as long as the administered system of pricing subsidies in Iraq means that Iraqis can illicitly acquire a tanker of oil for the equivalent of USD380 and sell it for USD4,800 in a neighbouring country. Iraq is estimated by the World Bank to be losing as much as USD8 billion per year as a result of oil theft. Efforts to contain oil smuggling - legislation, stricter punishment, better guarding of the oil facilities - are no substitute for real anti-corruption measures, metering of oil flow, and subsidy cuts to make export of stolen oil less lucrative.

Violent           [pic]TOP

There are few formal figures on violent crime in Iraq, but a number of informal indicators paint a picture of very low levels of personal safety. Despite the relative respite in violent attacks compared to 2006 and 2007, Iraqis remain far more cautious than they were before the US-led occupation, and even during its first years. When it is recalled that Iraqis routinely took evening strolls even during Western bombing raids in 1998 and 2003, the eerie stillness of nocturnal Iraq is a testament to public concern. Iraqis remain wary of unnecessary travel and many keep their children at home as protection against kidnappings. Under government rules, Iraqis are still allowed to keep one assault rifle, per household for personal defence, but many also carry concealed weapons when travelling.

In the Sunni triangle, Iraq's former Baathist groups operate much as they did under the old regime - as an enforcement network with a hand in any business operating in their area. Organised crime has affected Iraqi businesses, with many Baghdad vendors paying tribute to multiple protection rackets each day. Abduction and sexual assault were formalised tools of the Baathist security apparatus, and these forms of crime persist today, the latter presenting a pressing social concern that Iraq's developing security forces seem disinclined to address.

Murder/assault

Homicide continues at very high levels. Before the fall of the Baathist regime, Iraqi records show that an average of 16 violent deaths (not including those killed by the regime) occurred each month, a very low figure compared to February 2004 figures, which showed 667 violent deaths per month, 372 of these from gunshot wounds. In mid-2006, this figure had risen to over 1,000 homicides per month in Baghdad alone. This is a return to the high levels seen during the first three post-war months, during which Baghdad became the murder capital of the world, with more fatalities than Rio de Janeiro. The homicide rate remained at this high level in 2008, driven by retaliatory sectarian and factional infighting.

Kidnapping

Kidnapping and ransom is another serious problem. Iraqi police officers have noted that under Saddam Hussein, abductions made up one per cent of their cases, while the phenomenon currently accounts for 70 per cent of reported crime. Kidnapping groups have known modus operandi and their own prison facilities; their typical targets are children, but businessmen and their spouses are also targeted. Banks face an increased risk of heists in the militarised economy. The economy as a whole now suffers under other forms of extortion.

The Baathist regime and criminality

Long-term economic under-performance and widespread unemployment and underemployment since the early 1990s laid the foundations for deep-rooted criminality in Iraq. While the Baathist regime ruled, serious criminality was channelled through semi-official rackets. Iraq's security and intelligence personnel were directly or indirectly involved in almost all organised crime when the regime was in charge. With links as far afield as Yugoslavia, Bulgaria, Belarus and Ukraine, Iraq's intelligence services built the basis for what became a sophisticated transnational criminal network in parallel with its state functions. The Mukhabarat included an overseas investment panel, the Board for the Management of Projects, and the means of dealing with troublesome foreign partners: the Department of Assassinations, known as M-14. It monitored internal criminal networks and demanded a cut of their takings. These features of Baathist activity provide the basis for today's powerful organised crime factions in Iraq.

For over a decade before the war, almost all crime, both domestic and that involving transnational smuggling, was government-sanctioned and involved narrow fraternities of criminals. The new pattern of crime in Iraq has seen the emergence of a broadening criminal class. In addition to released criminals and former security personnel, high unemployment and inflation combine to create an ideal environment for corruption and the dangerous recourse to employment by criminal groups. The economy as a whole now suffers under other forms of extortion. Iraqis now receive incomes that are an order of magnitude better than their pre-war stipends and many businesses are now being taxed over a dozen times a day by 'mafia' groups, suggesting that they are amassing significant economic power bases.

Countermeasures           [pic]TOP

Prevention

The Iraqi government and the Multi-National Force (MNF) recognise the central importance of reconstructing the Iraqi Police Service (IPS) as the first line of defence against crime and insurgency. Indeed, senior US government officials and soldiers initially referred to 2006 as "the year of the police" in Iraq, highlighting the central role expected of the IPS. Police forces will be the principal indigenous intelligence collection mechanism for the Iraqi government for years to come. US Federal Bureau of Investigation (FBI) agents and police advisors from many countries are already training the IPS in the fundamentals of policing (such as basic investigative skills) as well as more advanced capabilities in its Major Crimes Directorate. This includes divisions to deal with kidnappings, counterfeiting, organised crime and vice, and riot control and divisions that will eventually tackle counter-terrorist issues.

| |Iraqi army and police parade in Baghdad, June 2009. (PA) |

| |1350645 |

Preparation

In anticipation of the slow development of a formal banking sector, Iraq has begun to put in place a legal framework to protect against financial crimes. The basis for such a beginning is in place following the establishment of Coalition Provisional Authority (CPA) orders 93 (Anti-Money-Laundering Act of 2004) and 94 (Banking Law 2004). Iraq will likely put in place an appropriate legal framework and push for membership of the Middle East and North African Financial Action Task Force. When banking reform is implemented by a constitutionally-elected government, the Central Bank of Iraq will play a more formal role in licensing and supervising bank management and removing managers and revoking licenses. In the meantime, questions remain about the administration, regulation and enforcement of anti-money-laundering measures. Iraq's Money-Laundering Reporting Office does not yet represent an effective financial intelligence unit.

International Relations           [pic]TOP

|Iraq's foreign relations represent a Pandora's box of issues that have remained on hold until the establishment of a constitutionally |

|elected government. |

|Foremost among these will be Iraq's relations with Iran, involving aspects that range from the settlement of a formal peace accord to the |

|development of a modus vivendi concerning Iranian influence in Iraq's Shia political factions and communities. |

|Iraq will remain dependent on US military assistance and multinational aid and debt relief for a number of years. |

Bilateral           [pic]TOP

Resources

Kuwait

Iraq has only one major bilateral resource dispute. This concerns the potential for shared Iraqi-Kuwaiti use of the Rumaila oil field pay zone. This field spans the Iraq-Kuwait border area, with the majority of the reservoir inside Iraq. On 16 July 1990, Baghdad used allegations of Kuwaiti slant-drilling and unfair extraction from the Rumaila pay zone as one aspect of its case that Kuwait was undertaking economic warfare against Iraq.

Borders

Iran

No lasting settlement has successfully regulated use of the 200 km waterway linking the confluence of the Euphrates and Tigris rivers in southern Iraq to the Gulf. Known to Arabs as the Shatt al-Arab (Stream of the Arabs) and to Iranians as the Arvand, bi-national use of the waterway has been organised using the thalweg principle (by use of a dividing line along the middle of the waterway). In 1975, Iraq signed the Algiers Accord in which it recognised the line running down the middle of the waterway as the official border. In 1980, Iraq reneged on the agreement and sought to territorially conquer the waterway and its eastern bank, but abandoned the attempt after eight years of war. The waterway is now clogged with war detritus from three major conflicts and can only be partially used. As part of its plans to increase oil production, Iraq's government wants to give the waterway - a vital oil shipping channel - a complete overhaul, but this will require a complicated resolution to the border dispute with Iran. In December 2009, Iranian troops occupied disputed well number 4 at the Fakka oil field, causing a political row in Iraq. The Iranian troops withdrew a month later.

Kuwait

Reneging on the 1963 agreement that recognised Kuwaiti sovereignty and boundaries, Iraq invaded Kuwait in 1990, and annexed the country as Iraq's 19th province for seven months. Since 1991, Iraq has made frequent and inconsistent statements about the status of Kuwait and border demarcation in the UN-administered border zone was regularly contested. An anti-tank barrier and territorial defence scheme has been developed and regularly tested by the Kuwaiti armed forces to prevent a future incursion from Iraq. Clashes occurred between Iraqis and Kuwaitis when border posts were strengthened to reduce the risk of terrorist overspill from Iraq in 2005, highlighting the ongoing mutual sensitivities between Iraq and Kuwait. Throughout 2006, there were numerous border skirmishes between Iraqi citizens and Kuwaiti police forces. Though these largely diminished by November 2006, the clashes strained relations and focused Kuwaiti attention on strengthening the physical barriers and putting electronic sensors in place along the border.

Diplomacy

Iran

Iran and Iraq disagree over a number of bilateral issues. Though defeating shared threats (drugs smuggling and other contraband) should theoretically be points of convergence for Iraqi and Iranian interests, corrupt elements on both sides have an interest in slowing co-operation. For example, the Islamic Revolution Guard Corps (IRGC) seek to maintain their smuggling activities in the Gulf. Sub-state actors like the Sunni extremists operating in Iranian Khuzestan or terrorists transiting Iran will also remain points of contention. Increasing Kurdish autonomy in Iraq will likely cause concern in Iran, which fears the awakening of autonomy movements in its own Kurdish community. The emergence of a rival theocratic model in Najaf, such as the model of Shia politics championed by Grand Ayatollah Ali al-Sistani, could also cause tension between Baghdad and Tehran. Finally, Iran's cross-border meddling and penetration of Iraqi political and municipal structures has emerged as a point of contention, although this has not stopped the US and Iraqi governments from engaging with Tehran in an effort to curb this activity.

| |Prime Minister Nouri al-Maliki meets Iranian President Mahmoud Ahmadinejad in 2008. (PA) |

| |1188287 |

Syria

Syria has little interest in seeing Iraq successfully rehabilitated as a major regional power under US auspices. The toppling of Saddam Hussein was a serious blow to the Syrian government, which is similar in nature to Iraq's former regime. The collapse of Saddam's regime has left Syria unsure of its place in the regional order. Syria traditionally saw Iraq as a rival for the leadership of populist Arab nationalism, but the collapse of Saddam's regime did not open the door for Syria to assume that leadership. Rather, the demise of the Iraqi Baath signalled the demise of old-school Arab nationalism as a political force in the Middle East.

Damascus will view involvement with Iraq through the prism of Syria's strategic stand-off with the US. The key point of contention remains the use of Syrian bases and the Iraqi-Syrian border by former regime elements and foreign jihadists. Though the Syrian government has begun to crackdown on this flow since late 2003, the regime is struggling against corruption within the intelligence and security services and has not managed to significantly reduce the use of Syria as an insurgent and terrorist sanctuary. The issue of security collaboration was a top priority during Maliki's visit to Damascus in August 2009. The Maliki government has long maintained that Syria is the critical conduit for Sunni jihadists who carry out attacks in Iraq, targeting overwhelmingly the Shia communities. Syria also hosts many former Iraqi Baathists who are believed to bankroll many of the attacks in Iraq. Therefore, a political dialogue with Damascus far outweighs any economic agenda in the short-term, although energy co-operation and trade will remain important in the long-term. Following the visit in August, Maliki called for the setting up of an international investigation into a major attack in Baghdad that month. He repeated the demand following another two devastating attacks in October in Baghdad that killed 160 Iraqis. Syria has denied any involvement and refused to hand over the Baathist exiles in Syria Baghdad accused of planning and funding the attacks. Relations between the two countries remain tense.

Turkey

Since the fall of Saddam Hussein, Iraq has experienced abrupt shifts in its relations with Turkey. In addition to economic interests in opening oil lines between the two countries, Turkey's broad interest has been a realist strategy aimed at preserving Iraq's territorial integrity and unity, as well as preventing Iraqi Kurds from declaring independence from the government in Baghdad. It is also intent on eradicating the last remaining members of the Partiya Karkerên Kurdistan (PKK) holed up in remote mountain regions of northern Iraq. Prior to the war, Turkey regularly crossed the border to attack PKK rebels in northern Iraq. The violations of Iraqi territory damaged relations with Baghdad's old regime; the massive incursions of March 1995 and May 1997 were particularly harmful to the two countries' relations.

| |Turkish military reconnaissance photograph from February 2008 showing an alleged PKK camp in northern Iraq. (PA) |

| |1188272 |

Turkey claims the right to pursue PKK rebels across the border and into Iraq if the Iraqi regime fails to do enough to apprehend them, a claim which has been rejected by the Iraqi government. Such unilateral action by Turkey is tempered by concern over how Washington will respond, but this did not stop a series of limited attacks (air, artillery and helicopter raids) into Iraq in search of PKK rebels in late 2007. Then, in February 2008, Turkey surprised many by launching a large-scale military incursion into northern Iraq with the aim of destroying PKK bases. Although partly successful, the invasion was cut short by international pressure and has damaged US and Iraqi trust in Turkish restraint. With the resumption of PKK activity a certainty every season when the winter snows have thawed, recurrent mini-crises between Iraq and the Turkey are likely. However, at the end of October 2009, in a sign of a sea change in relations, Turkish Minister of Foreign Affairs Ahmet Davutoglu visited Arbil and met with the president of the Kurdistan Regional Government, Masoud Barzani. Kurdish Prime Minister Barham Salih described the visit as historic.

Alignment/Alliances

Iraq was not able to develop bilateral alliances until it had a constitutionally empowered government after the 15 December 2005 elections. In the interim, it engaged in numerous economic deals (oil-swaps, electricity supply) to ease near-term concerns.

United States

The Iraqi government has signed a formal Status of Forces Agreement (SOFA) that defines the legal status of US military personnel. Iraq signed an Article 98 agreement with the US that would prevent the handing over of US personnel to the International Criminal Court. The US provides assistance via the Department of Defense's International Military Education and Training and Foreign Military Financing programmes.

Iran

In February 2010, senior US military and civilian officials in Iraq again accused Iran of exercising malign influence in Iraq, mainly through legislator Jamal Jaafar al-Muhandes, who the US accuse of being an advisor to Iranian Brigadier General Qassem Suleimani, the commander of the IRGC Quds Force. The US also accused Iran of continuing to fund, arm and train anti-government insurgent groups.

Aid

The bilateral low-cost or no-cost grant of military and reconstruction equipment has been provided by a large number of states. Key donors include: Bahrain, Germany, Hungary, Jordan, Kuwait, Oman, Poland, Qatar, Saudi Arabia, the United Arab Emirates, the UK and the US.

Multilateral/Regional           [pic]TOP

Resources

Riparian issues (Iraq/Syria/Turkey)

More than two-thirds of the cultivated land in Iraq requires irrigation to stay productive and this farming relies on the Euphrates and Tigris rivers. Relations with upstream states like Syria and Turkey are vital in protecting the survival of these rivers. Turkey contributes 88 per cent of the water potentially carried by the Euphrates, and Syria 11 per cent. The Tigris river also has its springs in the highlands of Eastern Turkey (providing an estimated 52 per cent of water), but also receives contributions from tributaries in Iraq (estimated at 48 per cent).

The past three decades witnessed the biggest alteration in the natural systems of the Euphrates and Tigris by these upstream states, causing dramatic alteration to the hydrology of Iraq. Syria's building of the al-Thawra dam created a political crisis with Iraq in 1974, further reducing the Euphrates' flow. Iraq threatened to bomb the dam and massed troops along the border. The crisis was resolved by mediation. By 1980, the Euphrates river annual flow at the Iraqi border with Syria had decreased from 28 billion m3 to around 10 billion m3. Between 1980 and 1982, a Joint Technical Committee on Regional Waters was created by the three states. According to an agreement between Syria and Iraq (1990), Iraq shares the Euphrates' waters with Syria on a 58 per cent (Iraq) and 42 per cent (Syria) basis, based on the flow received by Syria at its border with Turkey. Since Turkey has unilaterally promised to secure a minimum flow of 15.8 billion m3 per year at its border with Syria, this agreement would de facto represent nine billion m3 per year for Iraq.

However, in 1983 Turkey initiated the South Eastern Anatolia Development Project, also known by its Turkish acronym GAP, which covers, in addition to the irrigation and hydropower schemes, all the related social and economic sectors including industry, transportation, mining, telecommunications, health, education, tourism and infrastructure projects needed to reduce popular dissent in the Kurdish southeast of the country. This initiative will eventually affect both the Euphrates and Tigris rivers and could lead to further tensions. Iraq, as the outermost utilising riparian state of both the rivers, also claims that it has ancient rights, acquired through thousands of years of irrigation in Mesopotamia. The Iraq Ministry of Water Resources will continue to push for a greater downstream flow.

Alignment/Alliances

Arab League

Although the predominantly Sunni Arab leaders of the Arab League were reluctant to acknowledge any Shia-led government appointed by the US in Iraq, pressure was put on its members directly and indirectly. Iraq was subsequently allowed to fill its seat at the Arab League in late 2003. Nonetheless, the overall relations in the post-Saddam era between Baghdad and the Arab League as a multilateral organisation can be characterised as extremely limited and hesitant. Iraqi officials, including the president and the prime minister, have publicly accused the Arab League of failing to in any way or shape support Iraq's governments in moral, political and economic terms. The level of mistrust in the Arab League is particularly high among Iraq's Kurdish and Shia policymakers who variously view the league as one that is Sunni or Arab-centric. Moreover, while these suspicions limit Iraq's role in the league, the real barrier to stronger ties remains the broad ineffectiveness of the Arab League as a political body.

Gulf Co-operation Council (GCC)

As a collective institution, the GCC has little ability to contribute much to the reconstruction of post-war Iraq. Debt relief is a bilateral issue and has been dealt with on this basis. In the longer term, some members of the GCC, most notably Kuwait, remain resolutely opposed to the idea of Iraq joining the organisation.

Organisation of the Petroleum Exporting Countries (OPEC)

Iraq is unlikely to leave OPEC. Although Iraq might stand to gain certain advantages from such a move (unlimited production quotas), Iraqi oil export capacity is currently quite limited and high oil prices mean that bumper revenues are being harvested anyhow. Furthermore, leaving OPEC would in the short-run hurt Iraq's image as a founding member of the organisation, which historically symbolised the solidarity of developing countries vis-à-vis the more powerful industrial consuming countries. Other members of the Group of 77 may see it as a betrayal of that solidarity.

Aid

Although 77 countries and 20 international organisations attended the Iraq Donors' Conference at Madrid in October 2003, almost three-quarters of the pledged amount came from three sources: The World Bank, the International Monetary Fund (IMF) and Japan. Key pledges came from the following categories of contributor:

• International Organisations: The World Bank pledged USD3 billion to USD5 billion of grants in the 2004-2007 period. The IMF pledged a further USD2.4 billion to USD4.25 billion of loans in the 2004-2006 period.

• Japan: Tokyo offered a further USD3.5 billion of loans on top of the USD1.5 billion grant that it had previously pledged to Iraqi reconstruction.

• EU states: EU countries pledged a total of USD1.53 billion in the 2004-2007 period, though only USD178 million emerged from central EU funds. Only USD118 million was donated by Germany and France pledged less than USD50,000.

• Gulf States: Saudi Arabia pledged USD500 million in loans and an equal amount in export credit guarantees, Kuwait added a further USD500 million to its standing USD1 billion aid pledge, and the United Arab Emirates pledged USD215 million dollars.

Nonetheless, key donors such as France and Russia did not pledge funds at Madrid, and contributions from the Gulf States were limited. The most significant criticism of the conference is likely to address the confusing nature of pledges, which are split between grants, loans, export credit guarantees and other forms of aid, in addition to being spread out over the 2004-2007 period.

In terms of foreign debt, USD66.5 billion of Iraq's overall USD120.2 billion foreign debt has been forgiven. The Paris Club cancelled USD42.3 billion, including Russia's USD12 billion. A number of non-Paris Club members have cancelled a total of USD8.2 billion on Paris Club terms. A total of USD16 billion has been cancelled by commercial creditors, also on Paris Club terms. Iraq owes USD56.6 billion to USD79.9 billion of remaining debt, including USD7.6 billion of outstanding Paris Club debt, USD32.4 billion to USD55.4 billion of Gulf Co-operation Council (GCC) debt, and USD15.9 billion to USD16.2 billion of other non-Paris Club debt.

Peace Processes           [pic]TOP

Ceasefire

Iraq remains technically in a state of war with Iran and Israel. Joint Iran-Iraq committees continue to meet to facilitate the ceasefire and exchange the remains of war dead.

Peacekeeping

Multi-National Forces Iraq (MNF-I)

Since 2003, more than three dozen countries contributed troops to the coalition forces in Iraq. By mid-2009 most had withdrawn their troops, leaving only US and UK forces, as well as some Australian and Romanian units. With the exception of US troops, all remaining coalition units were expected to withdraw in 2009. MNF-I's UN authorisation, which expired on 31 December 2008, has been replaced by individual agreements between the Iraqi government and the remaining countries making up MNF-I. All US combat troops are scheduled to leave Iraq by 2010, with all other troops removed by 2011, regardless of a spike in violence. Meanwhile, the Iraqi Parliament is debating amendments to the Status of Forces Agreement (SOFA) with the US, which if approved by the electorate would mean US troops would have to leave Iraq by January 2010.

NATO

NATO opened headquarters in Baghdad and a Joint Staff Centre-Training Academy in Iraq in September 2005. The mission is supported and funded by all 26 nations of the alliance. The duration of this NATO mission is open-ended.

Proliferation and Procurement           [pic]TOP

|Iraq's current land and air forces procurement programme is unstructured and corruption-prone. |

|The country currently shows no interest in restarting its weapons of mass destruction programmes. |

|Iraq poses a key proliferation risk in terms of small-arms and military explosives. |

State legal           [pic]TOP

Development of the new Iraqi army and other security forces has driven rapid procurement programmes undertaken by the Iraqi Ministry of Defence (MoD) and Ministry of the Interior. The process has not gone smoothly, and haste has made waste on a number of occasions. Even without factoring in corruption, the MoD procurement programme does not represent a fully structured procurement effort as much of the equipment entering service was provided through no-cost or low-cost grants by foreign governments. Nevertheless, in 2007 the US has placed great emphasis on the development of the Iraqi MoD and the Iraqi army. This has led to increasingly strong investment and procurement.

Defence spending remains far below that required to reconstitute an effective offensive military capability, and any sign of a major military build-up in Iraq would trigger international censure that the fragile national recovery effort can ill afford. Despite these sensitivities, Iraq will receive 77 T-72M1 main battle tanks donated from Hungary. Other key armoured vehicle donations include: 100 M113A1 tracked armoured personnel carriers (APC), 100 Spartan APC and 50 BTR-94 APC donated by Jordan; 32 Panhard VCR and 38 Panhard M-3 APC donated by the UAE; and 30 ASV-150 wheeled APC donated by the US. In May 2007, Iraq decided not to procure a further 72 T-55 and 77 T-72 main battle tanks because these platforms were not priority requirements for counter-insurgency operations.

Instead, armoured and soft-skinned land transport vehicles have been prioritised in early Iraqi procurement plans. Iraq will be the launch customer for 400 M1151 Hummer ammunition carriers and 10 M1113 Hummer mobile workshops. Four hundred ambulances will be supplied by Turkish firm Otokar and around 200 Polish wheeled vehicles supplied by the Zasta Company. One hundred Jeep TJC vehicles will be delivered by Egyptian Arab-American Vehicles. The UK Ministry of Defence Procurement Agency has donated 72 Land Rovers. Future purchases are likely to include the Textron Marine and Land Systems M1117 Cougar Armoured Security Vehicle series and follow-on sales of new Hummer variants. In May 2007, US Congress announced the possible sale of a further 522 Humvees (or, as an alternative, 276 light armoured troop carriers), 66 heavy cargo trucks and eight tracked heavy recovery vehicles, in addition to ambulances, light vehicles and hundreds of generators. Pakistan's Heavy Industry Taxila (HIT) manufactured Talha tracked armoured personnel carriers (APC) have been purchased by Iraq since 2004 in orders likely to see final delivery of 44 Talha, 60 Al Mohafiz Security Vehicles and 300 Aahan Armoured Guard Posts.

In 2007, the Iraqi Army made a strategic shift toward US/NATO-standard small-arms systems. In a previous notification, the US government announced the sale of thousands of 5.56 mm M16 rifles, M4 carbines and M249 Squad Automatic Weapon machine guns. These will be backed by extensive ammunition, parts and training sales. Body armour, second generation night vision equipment and uniforms will also increasingly resemble US/NATO models.

In the field of air mobility, Iraq has also benefited from no- or low-cost equipment transfers. Jordan has donated two eight-ship squadrons of Jordanian UH-1H Huey medium military transport helicopters. A third light transport squadron will comprise airframes donated by the UAE, including four Bell Jet Ranger light helicopters and seven Comair 7SL six-seat fixed wing aircraft built by Aerocomp International. This force is likely to make up part of the future VIP fleet used by government officials. The fledgling Iraqi Air Force (IQAF) is adding US military surplus to its holdings, with three Lockheed Martin C-130E medium transport. Australian firm Seabird, meanwhile, has delivered all ten of the Seeker SB7L-360 multi-mission surveillance aircraft. The IQAF is looking to increase its capabilities with the potential acquisition of eight basic two-seat turboprop counter-insurgency (COIN) aircraft by April 2009. The deal sits alongside a USD900 million contract notified to US Congress by the US Defense Security Co-operation Agency, which includes 24 King Air 350ERs for Intelligence Surveillance and Reconnaissance (ISR) and 24 King Air 350ER or PZL M-18 Skytruck aircraft for a light transport role.

Uncertainty surrounds the status of a raft of Polish helicopter contracts that committed Polish Bunar arms consortium to supply 44 helicopters to the nascent Iraqi military (24 reconditioned Mil Mi-17 'Hip' medium military transport helicopters and 20 Polish-built Sokol W-3 medium military transport helicopters, manufactured by the PZL Swidnik company). In April 2006 it was announced that only two Sokol W-3 helicopters will be used by Iraq for VIP transport, while the medium helicopter requirement will instead be met by new-build Mi-17 helicopters from Russia.

In the 2010-2015 timeframe, Iraq has announced that the IQAF intends to buy 30 Lockheed Martin F-16 fighter aircraft.

The Iraqi Coastal Defence Force (ICDF) will purchase four shallow-draught armed Diciotti-class P61 offshore patrol vessel (OPV) that Fincantieri developed for the Armed Forces of Malta from the Saettia-class OPVs in service with the Italian Coast Guard. The Iraqi forces modernisation programme also calls for another 15 smaller patrol boats and two offshore support vessels.

| |The Iraqi navy patrol craft Fatah. (Multinational Security Transitional Command - Iraq (MNSTC-I)) |

| |1335027 |

Imported military training has been more significant than any platform purchases. Military Training Teams (MTT) include around 4,500 embedded US military advisors. In addition to assisting with initial force generation, these instructors are achieving some success in mentoring Iraqi security forces. Earlier attempts by contractors to train, equip, coach, teach and mentor Iraqi forces simply did not produce the desired results in terms of quality, quantity or sense of urgency. Embedded MTT trainers and partnering Iraqi and Coalition units have had a measurably superior effect.

State illegal           [pic]TOP

There is no evidence that Iraq's government plans to reconstitute the country's prior weapons of mass destruction programme or seek offensive weaponry that might contravene the Missile Technology Control Regime. Seizure and monitoring of Iraqi nuclear, chemical and biological warfare specialists has been carried out reasonably successfully. A raft of programmes have been developed to track and rehabilitate approximately 25,000 scientists. Within the Iraqi budget, the Ministry of Science and Technology allocated USD13.4 million exclusively for the purpose of hiring "1,500 defence industry engineers and scientists", and to re-establish "control over nuclear sources". The Nation Building Projects section of the 2004 Coalition Provisional Authority (CPA) budget indicated that approximately USD60 million was being allocated for "WMD Scientist Retention", with follow-on funding for this programme set at USD20 million per year for 2005 and 2006. The US Department of State provides approximately USD2 million of annual funding from its Nonproliferation and Disarmament Fund to the Iraqi International Center for Science and Industry (IICSI). The US Department of Energy (DOE) also hosts Iraqi nuclear scientists through its National Nuclear Security Administration (NNSA) programme by funded Sandia National Laboratories and the Arab Science and Technology Foundation (ASTF), based in the UAE.

Non-state legal           [pic]TOP

Iraqi citizens are entitled by law to keep a single rifle in their household for personal protection. Gun ownership is near ubiquitous.

Non-state illegal           [pic]TOP

Due to the massive proliferation of war matériel in Iraq, large numbers of Iraqis have illegal access to multiple small-arms, heavy weapons and explosives.

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