Thursday, February 23, 2012

Iraq: Key facts and figures

Seven years after it led the invasion of Iraq, the US now has fewer than 50,000 soldiers in the country and is due to have withdrawn all its troops by the end of 2011.
Billions of dollars have been spent on rebuilding the country's infrastructure, but there is still a long way to go.


Overall, 23% of Iraq's population lives below the poverty line (spending $2.20 per person per day), according to figures from the Iraqi government and the World Bank.
The latest report from the World Food Programme [pdf] in November 2008, described an estimated 3.1% of Iraqi households - 930,000 people - as "food insecure", living with hunger and fearing starvation. That represented a considerable improvement on 15.4%, the figure when the survey was last carried out in 2005.
However, the WFP also found a further 6.4 million people would be vulnerable to food insecurity without the Public Distribution System, which provides monthly food rations to 90% of the population.
Graphic of ownership of household goods
In January 2010, there were approximately 1.3 million landline telephone subscriptions and 19.5 million mobile phone subscriptions, according to the Brookings Institution. That compares with a pre-war level of 833,000 landline subscriptions and no cellular network.
There are also now 1.6 million internet subscribers, compared with 4,600 before the US-led invasion.
The UN reported in 2004 that car ownership had doubled since 2003, but between then and the Iraq household socio-economic survey in 2007, the figure remained relatively static, rising to just above 25%.


According to data supplied by the ministry of electricity, Iraq is only generating 8,000 of the 13-15,000 megawatts (MW) of power required to meet Iraqi needs (50-60%). This figure does not include the Kurdistan region, where conditions are better.
The situation is worst for Iraq's internally displaced, where more than a third of households (37%) receive less than four hours of electricity per day. The lack of reliable electricity supply from the national grid has led to widespread use of backyard and neighbourhood generators.
Low electricity supplies are hampering the pumping of water to Iraqi households and severely restricting economic development.
Map showing access to water supplies in regions of Iraq


World Bank figures released in February 2010 show that potable water service is available to just under 70% of the population outside of Baghdad and can drop to as low as 48% in rural areas. In some areas, water is available only in the evening; and in many areas, village residents illegally tap into water pipelines.
In Baghdad, 25% of residents remain disconnected from the water supply network and rely on expensive alternative sources of drinking water, such as delivery by tankers.
According to Unesco, decreasing water supplies have been exacerbated by drought conditions between 2005 and 2009, which have devastated agriculture and decimated livestock.
Fewer homes are connected to wastewater sanitation systems than to potable water sources. According to the figures, less than 8% of the homes outside Baghdad are connected to sewerage systems.
An outbreak of cholera in August 2008 affected nine provinces in the country and was due to the poor standard of sanitation. According to the World Health Organization "outbreaks will recur in Iraq until access to safe water and proper sanitation is ensured for all people". Diarrhoea, a symptom of other waterborne diseases, was also reported to be on the increase.
Map showing access to water supplies in regions of Iraq


Most coalition troops have withdrawn from Iraq. The last US combat brigade pulled out in mid-August, leaving fewer than 50,000 US Army personnel in the country. Under a US-Iraq deal, all American troops will leave the country by the end of 2011.
The number of deaths, military and civilian, is continuing to fall. Iraq Body Count (IBC) says 4,645 civilians were reported killed in violence in Iraq in 2009, which was about half the level in 2008 and the lowest annual total since the invasion in 2003.
At the end of April 2010, IBC said 1,010 civilians had been reported killed so far this year. The IBC counts reported deaths and then cross references them with official figures from Iraqi hospitals and ministries.
Graph showing civilian casualties in Iraq from 2003 to 2010


The US government and others estimate that 1.5 million Iraqis fled their homes to other parts of Iraq or other countries to escape the sectarian conflict sparked by the 2006 Samarra mosque bombing.
It is believed that another 200,000 had already been displaced following the US-led invasion, while approximately one million people left Iraq during the rule of Saddam Hussein.
The United Nations High Commissioner for Refugees (UNHCR)estimates that 427,000 Internally Displaced Persons (IDPs) and 79,000 refugees returned to their areas of origin between January 2008 and July 2010. The number of those returning dropped by 29% in the first half of 2010, compared to the same period in 2009, UNHCR figures show.
However, there are still approximately one million Iraqi refugees abroad and 1.55 million IDPs, a third of whom are living in settlements or camp-like situations in extremely poor conditions, it says.
The UNHCR registered nearly 35,000 refugees inside Iraq at the end of 2009, mostly Palestinians, Syrians and Iranians. They are primarily located in the areas administered by the Kurdistan Regional Government (KRG) and Baghdad. In addition there are 3,800 asylum-seekers from Iran, Syria and Turkey.
A refugee camp for Palestinians in the desert near the Syrian border was recently closed and the occupants moved over the border into Syria, but a further 10,000 remain - mostly in Baghdad.


Iraq relies on oil for over 40% of its gross domestic product and over 90% of government revenues. It has the fourth largest proven oil reserves in the world, with about 10% of the world's oil reserves, according to theOrganization of Arab Petroleum Exporting Countries (OAPEC).
Oil production figures dipped at the start of the invasion but have since remained relatively buoyant. As of April, 2.41 million barrels of oil a day were being produced, still well below the 1979 peak of 3.5 million barrels a day.
Oil production figures


The number of Iraqis employed in the public sector has doubled since 2005, with the public sector currently providing 43% of all jobs in Iraq and almost 60% of all full-time employment. But constraints on the federal budget caused by the drop in global oil prices have curtailed new public sector recruitment.
Unemployment stands at 15% and a further 28% of the workforce is underemployed, which may increase in the coming years, particularly amongst youth, according to a UN analysis of 2008 figures from Iraq's Central Organisation for Statistics and Information Technology.
The number of unemployed people below the age of 34 amounts to more than one million people, three-quarters of them male.
Only 18% of women are employed.
Young people were increasingly vulnerable to poverty and food insecurity as 450,000 entered the labour market facing limited job prospects, the UN report said.
Source: BBC

Tuesday, February 21, 2012

Iraq Weekly Roundup, 21 February 2012

There was a fall in the number of attacks recorded in Iraq last week, but the death toll was nonetheless higher than normal following a mass-casualty suicide attack targeting a police academy near Palestine Street in Baghdad.  Clusters of violence occurred in Mosul, Baghdad, Kirkuk, Ba’qubah, Ramadi and Nassiriyah, although overall militancy was down in all of these cities.

In total, at least 45 people were killed and 74 injured in nationwide incidents, of which 19 were killed and 29 injured in the suicide attack. Otherwise a fall in the total number of non-suicide bomb attacks left six people dead and 39 injured. A slight rise in the number of small arms attacks left 19 people dead and six injured. There were no indirect fire attacks (rockets and mortars) or abductions reported.

Al-Qaeda and Syria
Meanwhile, security force patrols and operations were stepped up in the province along the border with Syria amid fears of criminal and militant infiltration. However, while the Iraqi security forces are concerned about militants crossing from Syria into Iraq, it is more likely that greater numbers are going in the opposite direction. 

There is mounting evidence that groups such as al-Qaeda are directing their efforts towards the collapsing regime on Iraq’s doorstep in the hope of being able to capitalise on the cover that the lawlessness in the country will afford them.

Monday, February 20, 2012

Worldwide Risk updates

The National Transitional Council (NTC) sent military forces to the south eastern town of al-Kufra, where clashes between rival local tribes have killed dozens of people. Militiamen from the Zwai tribe have clashed with fighters from the Tibu ethnic group led by Isa Abdel Majid, who they accuse of attacking al-Kufra backed by mercenaries from Chad.

The arrest of Jaime Herrera Herrera, a drug maker for the Sinaloa cartel, will have little impact on the cartel’s trade in methamphetamine but will further impede its efforts to assert control over its existing territories. Any decline in revenue along with a corresponding loss of personnel will hit the cartel hard as Los Zetas seek to encroach upon their western strongholds. Increased violence in these regions should be anticipated.

North Korea
The DPRK stepped up its rhetoric by targeting the series of joint military drills planned by South Korea and the US. In return, live fire exercises by the North are anticipated although artillery attacks are not expected.

Ibrahim Khalil Daudov, Dagestani branch commander of Doka Umarov’s Caucasus Emirate insurgency, was reportedly killed by police in Dagestan on 11 February in a raid against Islamic militants near the village of Gurbuki; his body remained unidentified until 14 February.  His death comes as part of a recently launched campaign against insurgents in the Chechen-Dagestani border area.   

Violence continued in and around Dakar ahead of presidential elections on 26 February, with six having been killed thus far. Demonstrations have occurred following police use of teargas nearby a Mosque in the capital on 17 February. Security forces are expected to respond to increased violence with a heavy handed response.

An explosion damaged a polling station in the southern port city of Aden on 20 February, one day before presidential elections were due to begin. Former Vice-President Abd-Rabbu Mansour Hadi is the only candidate in the elections due to terms agreed in a transition deal. There is a risk of further attacks by Islamist and southern separatist militants throughout the country over the election period.


Source: AKE

Friday, February 17, 2012

2nd Foreign Energy Company Ready To Leave Iraq Showing The Difficulties Of Working In The Country

2nd Foreign Energy Company Ready To Leave Iraq Showing The Difficulties Of Working In The Country BY: Musings On Iraq

Norway’s Statoil Hydro is contemplating departing Iraq. It is currently working with Russia’s Lukoil, and the Iraqi state-run North Oil Company in a joint venture to develop the West Qurna Phase 2 field in Basra. Since late-2011, Statoil has been considering selling its share of the company, because of the various problems it has run into in Iraq, and now appears ready to finalize that deal.
Norway's Statoil won an auction for the West Qurna Phase 2 field along with Russia's Lukoil in Iraq's second auction in Dec. 2009

Statoil first entered the Iraqi petroleum industry in December 2009. That month, the Iraqi Oil Ministry held the second auction for several petroleum fields across the country. Russia’s Lukoil and Norway’s Statoil put in the winning bid for the West Qurna Phase 2 field in Basra. It has estimated reserves of 12.876 billion barrels. At that time, West Qurna was not operating. The two foreign companies agreed to form a joint venture with the state-run North Oil Company, and eventually raise production from zero to 1.8 million barrels a day in several years. After reaching an initial output mark, Lukoil and Statoil would begin being paid $1.15 per barrel of petroleum produced. The first goal was producing 130,000 barrels a day by January 2013, then 150,000 barrels by the end of the year, and 400,000 barrels by 2014. These technical service agreements benefit the Iraqi government as it gains the foreign know how and technology of international energy companies who have to put up a large amount of start-up money, and get production going before they receive any form of compensation. Even when they do, the Iraqi government was able to negotiate very low profits for them. Corporations like Statoil were willing to accept these stiff terms at first, hoping that they could enter the Iraqi market, which had been cut off since 1990 by international sanctions, and then get better terms or more fields later on.

Statoil quickly ran into problems with West Qurna Phase 2. One of them was that local tribes were demanding that they be paid for losing their land to the companies. One sheikh told Reuters that his people had sabotaged some of the work at the field to push their case. An Iraqi oil official claimed that these protests had pushed back the timeline for starting production at West Qurna, and that the Oil Ministry was talking about setting up some kind of payment plan as a result. Next, Statoil and Lukoil found that West Qurna was littered with old ordinance like mines and unexploded artillery shells from the Iran-Iraq War. As a result, contractors had to be hired to clear the fields, which again hindered work. All these issues meant that by January 2012, West Qurna Phase 2 was still not producing any oil, more than two years after the initial auction. Frustration with these delays, and the tough terms included in the original contract, all contributed to Statoil changing its opinion about operating in Iraq.

By mid-2011, the Norwegian company had enough of the difficult conditions in Iraq. In June, it started talking about renegotiating its deal with the Oil Ministry, claiming that it could not reach the production targets included in its contract, and that government red tape was holding up work. By January 2012, the Norwegians had changed their tone once again, and this time were talking about selling their share of the joint venture all together. Some analysts believed that this might have just been a bargaining tool to get better terms from Baghdad, but reports now make it seem like the corporation is serious about departing. In February for example, Reuters noted that the Norwegians had gone to the Oil Ministry, and that it had initially agreed to the sale. Statoil officials said that they were more interested in investing in Norway and the United States, than Iraq. If the Norwegians went ahead with this, it would be the second time a foreign energy company pulled out of Iraq. Kazakhstan’s KazMunai Gas withdrew from a deal for the Akkas natural gas field in Anbar in mid-2011 after the local government there staged protests, made demands for greater control over its energy resources, and requested economic concessions. That was the first time a corporation decided to leave Iraq’s oil and gas fields. That experience, and Statoil’s show how hard it is for some to operate in Iraq’s environment.

If Statoil goes ahead with its sale it would highlight the limits of working in the country. Many locals and provincial governments want a piece of the country’s greatest assets its oil and gas, which can complicate things with protests and attacks on equipment. Fields in southern Iraq are also littered with the remnants of the Iran-Iraq War, making it impossible to do anything until they are cleared. To add to that the government’s red tape can be maddening. Prime Minister Nouri al-Maliki is the acting Interior Minister right now, which means that all visas have to be okayed by his office or him personally. That causes huge delays for companies to get their workers and personnel into Iraq. That’s especially important, because the country lacks the skilled work force to develop its oil fields. That same bureaucracy has slowed down the payment to some of the companies operating in Iraq. Those revenues are very limited as well, because of the technical service agreements the government offered. Some of the major oil companies can probably wait out these difficulties. Others like Statoil may not have the resources and patience to wait for their deals to come to fruition. If it exits Iraq, it may not have a big affect either. It is the junior partner in the joint venture, with only 18.75%. That means West Qurna Phase 2 will still be developed, and other corporations will still be interested in Iraq, but it does take some of the veneer off of the country. Many businesses were willing to accept Baghdad’s terms, because the country has such huge, untapped reserves of oil and gas. Now, companies are beginning to form a more realistic view of what Iraq is like, and could use that in their negotiations with the Oil Ministry.


El Gamal, Rania, “Iraqi tribal disputes pose new challenge to oil firms,” Reuters, 5/29/11

Gismatullin, Eduard and Stigset, Marianne, “Statoil May Renegotiate West Qurna Contract, Questions Schedule,” Bloomberg, 6/23/11

Kramer, Andrew and Werdigier, Julia, “Exxon Spars With Iraq Over Lack of Payment,” New York Times, 12/22/11

Lando, Ben, “Joining The Global Oil Sector: Challenges And Opportunities Facing Iraq,” Middle East Institute, 4/29/11

Mohammed, Aref, “Landmines hamper Iraq oil boom, delay investment,” Reuters, 11/16/11

The National, “Iraq oil deals,” 12/12/09

Rasheed, Ahmed, “UPDATE 2-Statoil seeks Iraq’s OK to sell oilfield stake,” Reuters, 2/2/12

Reuters, “UPDATE 1-Iraq Oks $998 mln oil contract with Samsun-source,” 1/24/12

Smith, Grant, “Statoil Seeks to Sell West Qurna-2 Stake in Iraq, MEES Reports,” Bloomberg, 1/13/12

Smith, Patrick, “Analysis: Iraq’s oil projections wildly optimistic,” AK News, 5/15/11

Monday, February 13, 2012

Risk Updates

Rio de Janeiro has been relatively calm since the beginning of a city-wide police strike on 10 February. In contrast to the strike in Salvador a week previously, authorities are intent upon cracking-down on striking police officers, insisting they are breaking their covenant with the public. Despite the current calm, however, the potential for an increase in low-level crime and looting remains. 

China reported slowdowns in both imports and exports for January 2012, resulting in a trade surplus of US$27.3 billion, a six-month high. Imports dropped by 15.3 per cent while exports dropped 0.5 per cent. Continuing economic crises in the US and the EU, China’s largest export markets, will be a major challenge to continued Chinese economic growth in 2012. 

President Joseph Kabila’s top presidential aide, Augustin Katumba Mwanke, died in a plane crash in Bukavu on 12 February.  ‘AKM’ was extremely influential in Congolese business politics, particularly in mining deals. His death will provoke an internal power struggle, compounded by the current delay over the formation of a new government. Mining firms should expect increased confusion over decision-making processes in the coming months.

Parliament approved further austerity measures in a vote on 12 February in a bid to secure a further tranche of financing before a bond redemption on 20 March. The vote will see minimum wage floor lowered by 22 per cent, the cutting of 15,000 public sector jobs and a further trimming of the government’s spending budget. Despite wider cuts, Greece’s ability to control its debts as the economy stalls remains under question.

The Iraqi government banned ExxonMobil from participating in the country’s fourth oil and gas bidding round scheduled for May. The move is in return for contracts signed between the oil major and the Kurdish Regional Government in October which the government regards as illegal.

A Tibetan nun was confirmed dead in Sichuan province, south-western China, after setting herself on fire on 11 February. One of over 20 reported self-immolations over the past year, this latest casualty comes amidst growing unrest in the region. Violence and protests may worsen leading up to the Tibetan new year on 22 February.

Incumbent candidate Gurbanguly Berdymukhammedov reportedly won a landslide victory in the 12 February presidential election, with most votes counted. Berdymukhammedov’s victory comes as no surprise in a country with little legitimate opposition to the regime and he is unlikely to face any significant challenge to his rule in the medium term.

The first draft of Zimbabwe’s new constitution was rejected by the ruling ZANU-PF party as it barred any future electoral candidate who had already held power for 10 years. As Mugabe continues to push for 2012 elections, regardless of reforms stipulated in the 2008 political agreement, Zimbabwe is set for a tumultuous year.

Source: AKE

Iraq Weekly Roundup, 13 February 2012

SummaryLevels of violence fell in Iraq last week. At least 19 people were killed and 55 injured in nationwide incidents which is a relatively low figure.

TacticsA total of 16 bomb attacks left five people dead and 39 injured – a relatively low figure. There were no suicide bombings recorded. A fall in the number of small arms fire attacks left 10 people dead and three injured. Indirect fire attacks (rockets and mortars) left one person dead and 13 injured.

Geographic DistributionViolence was concentrated in the central provinces and Baghdad. The North of the country was unusually quiet, with no major incidents recorded in Mosul city at all. Kurdistan saw Turkish military operations around the border, involving clashes with the terrorist PKK organisation.

Incidents in the SouthA kidnapped woman was rescued by the authorities in an operation in Basrah. An Iraqi private security company employee and three local residents were killed in a small arms fire exchange in West Qurnah.

Business RisksFrom a business perspective, the government announced that oil major ExxonMobil would not be allowed to participate in an upcoming oil and gas bidding round after it controversially signed contracts with the Kurdish authorities in October 2011.
Political Instability
From a political perspective the Iraqiya bloc returned to parliament last week after it boycotted proceedings following the arrest warrant issued for vice-president Tariq al-Hashimi.

Source: AKE