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FACTBOX-Key political risks to watch in Iraq
02/08/2011

By Patrick Markey

BAGHDAD Aug 2(Reuters) - Iraq's negotiations over whether some U.S. troops remain after a planned withdrawal at year-end and the consequences for Prime Minister Nuri al-Maliki will dominate the country's agenda.

Maliki signals he may seek civilian trainers instead of keeping U.S. troops on Iraqi soil, a sensitive issue requiring the backing of parliament. Washington wants Baghdad to decide quickly whether troops stay, but talks may be complicated by a U.S. demand Iraq grant any troops legal immunity.

While violence has fallen since the worst days of sectarian conflict in 2006-2007, bombings, assassinations and attacks by Sunni Islamist insurgents and by Shi'ite militias still occur daily. Attacks on U.S. troops also increased earlier this year.

Some Iraqis want a U.S. presence to help their still fragile transition, especially in northern areas disputed between Iraqi Arabs and Kurds. Any perception President Barack Obama has disengaged could worsen sectarian differences and encourage meddling by others, like Shi'ite Iran or Saudi Arabia.

Popular protests over poor basic services have ebbed, but demands are still simmering for the government to improve electricity, water and food ration supplies.

Multibillion-dollar deals Baghdad signed with energy majors that could quadruple oil output capacity in six years and power Iraq into oil's big league are moving ahead only slowly.

Increased production would give Iraq the money it needs to rebuild, but everything depends on whether the OPEC member can secure its vital oilfields, refineries and other infrastructure.

Iraq is isolated from world markets. Only a few dozen firms are listed on the stock exchange. Iraq's dinar is thinly traded and the exchange rate is effectively determined by the central bank in its dollar auctions.

Below are some of the major risks facing Iraq.

 

DEBATE OVER U.S. TROOPS

The year-end deadline for the remaining 46,000 U.S. soldiers to leave is nearing, but Iraqi officials have yet to state clearly what they want from Washington. Maliki says the decision rests with local political parties.

Keeping U.S. troops in Iraq risks upsetting Moqtada al-Sadr, whose Shi'ite militia fought U.S. and Iraqi troops after the 2003 invasion. Sadr's political movement overcame its antipathy towards Maliki to become a kingmaker for the prime minister.

Sadr has in the past threatened to revive his militia, or organize protests, if U.S. troops stay. His reaction may depend on how Maliki packages any U.S. military aid, and also on how splintered Sadr's own movement has become.

But other groups like the Kurds are more openly keen for U.S. troops to stay on.

Maliki has said repeatedly that Iraq's army and police can handle internal security. But his military commanders and some Iraqi soldiers say U.S. troops will be needed after the withdrawal deadline, especially to train up weak air and naval defences and back up intelligence.

Both U.S. Defense Secretary Robert Gates and Admiral Mike Mullen, chairman of the U.S. military's Joint Chiefs of Staff, recently pressed Maliki to decide quickly, saying otherwise it would difficult to roll back the withdrawal.

Maliki could seek trainers for his defence and security ministers as an option that would be more palatable at home and allow him to bypass parliament. But U.S. officials said training would likely not rely only on contractors and would need lawmakers to give legal safeguards for U.S. military to stay on.

 

WHAT TO WATCH:

- Decisions by Iraqi political blocs that indicate how much room Maliki has to manoeuvre.

- Iraq ministries signing deals for civilian trainers.

 

PROTESTS, POLITICAL WRANGLING

Maliki has eased pressure on his government from social protests, by increasing spending on a food-ration programme and signing deals to boost electricity output. That may give Iraqi politicians more breathing space than other leaders in the Arab world where protests have demanded changes in government.

But Iraqis are fed up with shortages of food rations, water, power and jobs eight years after the invasion that toppled Saddam Hussein. Rising temperatures in a nation whose electrical grid offers only hours of power a day can spark discontent.

The inclusion of the Sunni-backed Iraqiya political bloc in the new governing coalition was a key step toward avoiding a slide back into sectarian violence. But its leader, Iyad Allawi, says Shi'ite leader Maliki failed to live up to his agreements.

Lengthy delays in appointing a new defence and security minister could further irritate Sunnis who feel marginalised.

In a signal of his clout in the legislature, Maliki has won parliamentary approval to slash the size of his government, which contained an unwieldy total of 43 cabinet posts.

But ongoing tensions may hamper decision-making and stall key legislation, including a new oil law, and telecommunications reform.

WHAT TO WATCH:

-- Rising discontent over intermittent power, corruption

-- Political deadlock affecting investment laws

-- More splits within the power-sharing coalition

 

A SURGE IN VIOLENCE

The number of civilians killed in Iraqi violence rose to 159 in July from 155 a month earlier and matched January for the highest number of deaths this year. Despite improvements, Iraq remains vulnerable to Sunni insurgents and Shi'ite militias.

Political feuds, Sunni discontent or an attack on a holy site could rekindle sectarian violence, especially as armed groups increase assaults as a way to show they are pressuring the U.S. troops. Already, insurgents are focussing attacks this year on local government and Iraqi troops.

U.S. troops in June suffered their worst casualties since 2008 with 14 servicemembers killed. U.S. officials say those attacks have now dropped off, but violence from Iranian-backed Shi'ite militias remains a risk.

Attacks on oil facilities could push up global oil prices since Iraq has the world's 4th largest reserves. Recent attacks on southern oil facilities showed even areas considered safer can still be vulnerable.

WHAT TO WATCH:

-- Attacks on oil facilities or foreign oil workers

-- A major attack in Baghdad testing local forces

-- Another spike in attacks on U.S. troops

 

KURDISH-ARAB CONFLICT

Tension between Arabs and minority Kurds, who have enjoyed virtual autonomy in their northern enclave for 20 years, is festering and will become a key potential flashpoint should U.S. troops withdraw at the end of the year.

Kurds hope to reclaim areas they deem historically Kurdish and their peshmerga troops briefly surrounded the key disputed city of Kirkuk in February in a show of force.

With a big show of military force in April, the Kurdistan Regional Government quelled long-running protests in the city of Sulaimaniya that sought an end to corruption and authoritarian rule. Those protests for reform may resurface.

Key to the disputed territories is oil. The semi-autonomous Kurdish region has deals with foreign companies, but the central and regional government must resolve oil revenue disputes.

WHAT TO WATCH:

-- Clashes between peshmerga and Iraqi troops

-- Passage of long-awaited oil legislation

FACTBOX-Key political risks to watch in Iraq -  Source


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