Iraq: What Does the Future Hold?

It is always uncertain to make predictions about the future, but this is especially true for Iraq. Just a few years ago, the likelihood of the country descending into civil war was all but certain. Now security has improved, the number of violent attacks has plummeted, and economic indicators such as oil exports and the import of goods are heading in the right direction. What lies ahead for Iraq, after U.S. troops leave the country as scheduled at the end of 2011?

Look for the recent return of Muqtada al-Sadr, after three years abroad in Iran, to make some waves. Al-Sadr is a Shiite cleric who once led his followers into battle against the U.S. and Sunni Muslims, but now exerts power through electoral means. He is reported to have grown in charisma even as he has moderated his approach, but his Mahdi Army "death squads" that wreaked havoc throughout 2006 and 2007 may have left a legacy of resentment among Sunni Muslims, making it difficult for his political party to make headway beyond certain regions of Iraq.

According to an insightful article on the blog Epic USA, one of Iraq's biggest problems going forward will be the ethnosectarian nature of its politics. Each of the major groups, Shiites, Sunnis and Kurds, needs to have more or less equal representation in the government, and voters in these groups will generally only vote for a candidate from their own group. Within these groups are many smaller political factions, making compromise difficult on any major issue, such as oil policy or the autonomy of the Kurdish people.

Poverty is also an endemic problem in Iraq, with more than 20% of its population under the poverty line, making less than $67 a month, according to 2010 data. While a significant number of the poor are urban, the majority are rural, living far from the centers of commerce with farming prospects weakened by the long conflict. Unemployment in Iraq stands at approximately 30%. Basic services, like water and electricity, are hard to come by in many areas. Any optimistic forecast of macroeconomic growth will have to take into account the poor, the unemployed and the utility shortages.

During the height of the sectarian conflict, Iraq was regarded as the world's second most failed state, next to Sudan. It has improved impressively in recent years, but huge challenges still remain, as a legacy of Saddam Hussein's rule and of the damaging invasion that overthrew him.