Basra should be Iraq’s most successful province. It lies furthest from IS’s front lines and has a tradition as the country’s most cosmopolitan city. It remains the country’s dynamo. It has Iraq’s only ports, and oil production that generates around 95% of the government’s oil revenues. But four decades of war, sanctions, occupation, neglect and Shia infighting have rendered it decrepit and dysfunctional. Its utilities are worse than those of Mosul, Iraq’s second city, which is controlled by IS. Power cuts last most of the day. The water is stickily saline. The air is acrid from oil plumes and from sewage that dribbles into collapsed canals which once saw Basra called “the Venice of the East”. Cholera is back. “Our health was better under sanctions and Saddam Hussein,” says a local councillor.
With nothing to do, the city’s youth turn to militias for jobs. They are probably the province’s largest employer...International oil companies might have kick-started the economy, but chose to locate all but essential operations abroad. Though local hire is cheaper, under their oil contracts, whoever they hire the Iraqi government pays. Such are the inflated costs that producing a barrel of Iraqi oil costs twice as much as in Saudi Arabia.
The oil companies argue that foreign labour is more reliable. But had the security environment been better and had Iraq paid its dues, they might have established training centres and universities in Iraq just as they did in Saudi Arabia. By sealing themselves off from Iraq, they are creating a vicious circle. As the gap between them and the locals widen, grievances mount. Worried about the prospects, Occidental Petroleum Corp, America’s fourth-largest producer, asked the government to buy back its stake in Zubair, a large southern oilfield, last month.
Iraqi politics compounds the lack of opportunity. The ruling parties in Baghdad divvy up the oil revenues before they trickle south. Their local representatives immobilise the rest. Basra’s governor, council head and mayor all belong to rival religious Shia parties. Each vetoes the others’ decisions and projects. Their militiamen jostle for control on the streets. In October 2014 Badr, the most powerful militia group, took over Saddam’s palace, from where the British ran their occupation in 2003, and pinned portraits of Iran’s supreme leader, Ali Khamenei, and Shia Iraq’s own religious leader, Ali al-Sistani, on its walls. Posters of their martyrs line Basra’s highways. The limited political freedoms gained since Saddam’s fall are receding…
“The middle class are selling what assets they still have and are fleeing the country,” says a local journalist, who is toying with following them. Flights bound for Istanbul leave full and return half empty. But the numbers in Basra are quickly replenished. Land clearance for oilfields has triggered a rural flight, ringing the city in shantytowns. More arrive from poorer neighbouring provinces with no oil. As an urban middle class is replaced by more conservative, poorer people from the countryside, Basra’s character is changing…. Restoration of the city’s grand old Jewish and Greek palaces stopped when Saddam was overthrown.
An hour’s drive north of Basra, the city of Amara shows what could be possible. There, the Shia religious parties co-operate, holding each other to account rather than blocking each others’ projects. The province has revamped its roads and sewage system and sports flashy government buildings. Chinese contractors shop in the markets without their security escorts. Two new gas-powered plants are set to fire up next year. But much worse can happen, too. In 2013 Iraqis in the disenfranchised north-west staged months of protests, which the authorities ignored and then fiercely repressed. Islamic State took their place, offering another way.
Excerpts from Iraq: The blighted city, Economist, Nov. 21, 2015, at 48.