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Measuring Stability and Security in Iraq

December 2007
Report to Congress
In accordance with the
Department of Defense Appropriations Act 2007
(Section 9010, Public Law 109-289)

Executive Summary

This report to Congress, Measuring Stability and Security in Iraq, is submitted pursuant to Section 9010 of the Department of Defense Appropriations Act 2007, Public Law 109-289 as amended by Section 1308 of Public Law 110-28. The report includes specific performance indicators and measures of progress toward political, economic, and security stability in Iraq, as directed in that legislation. This is the tenth in a series of quarterly reports on this subject. The most recent report was submitted in September 2007. The report complements other reports and information about Iraq provided to Congress and is not intended as a single source of all information about the combined efforts or the future strategy of the United States, its Coalition partners, or Iraq.

The strategic goal of the United States in Iraq remains a unified, democratic and federal Iraq that can govern, defend and sustain itself and is an ally in the war on terror. This report measures progress towards, and setbacks from, achieving that goal during the reporting period (September through November 2007).¹ There has been significant security progress, momentum in reconciliation at the local and provincial levels and economic progress. However substantial the security progress made since the last report, sustained and durable progress depends on further progress in attaining political and economic objectives. The United States, its Coalition partners and others in the international community remain committed to assisting the Government of Iraq (GoI) in capitalizing on this progress.

The continued implementation of the New Way Forward strategy combined with the surge in overall force levels in Iraq has considerably improved overall levels of security during the past quarter. Improved security is beginning to achieve momentum that, if maintained, may lead to sustained stability. The “tribal awakening” movement has grown as an increasing number of sheikhs—Sunni and Shi’a—have chosen to stop resisting the Coalition. They are instead working together with the GoI and the Coalition, including with Provincial Reconstruction Teams, to improve security and economic conditions at the local level. “Concerned Local Citizen” (CLC) programs have been established through which members of communities work with Coalition and Iraqi forces to protect their neighbor-hoods and critical infrastructure, with greater than 75% under U.S.-funded contracts. This program enhances the ability of Coalition and Iraqi forces to interact with local residents and obtain information on insurgents and illegal militia activity. The CLC movement is proving crucial to the counterinsurgency effort and will require continued support. Efforts to transition these CLC personnel to regular positions in the army or police or to provide other employment opportunities are underway but these efforts are moving slowly. The pace of integrating the CLC members into GoI institutions, lack of alternative employment and fears by the Maliki government that these forces may return to violence or form new militias are of concern.

The number of security incidents has fallen significantly and is now at levels last seen in the summer of 2005. Although ethno-sectarian violence continues to be a concern, overall civilian casualties, enemy attacks and total improvised explosive device attacks have decreased markedly over the reporting period. For example, the number of high-profile attacks in Iraq declined by over 50% since March 2007. The overall reduction in security incidents can be attributed to several factors, including the continued decrease in capabilities of al Qaeda in Iraq (AQI) and militia extremists, increased tribal initiatives against AQI and other extremists, Muqtada al-Sadr’s ceasefire order to his Jaysh al-Mahdi militia, the increased capability of the Iraqi military and police, the separation of Iraq’s previously mixed sectarian communi-ties into homogenous neighborhoods and the sustained presence of Coalition and Iraqi forces among the population.

Coalition forces continue to transfer responsibility for security to the GoI. Karbala Province transitioned to Provincial Iraqi Control (PIC) on October 29, 2007, bringing the total number of provinces for which the GoI has lead security responsibility to eight of eighteen provinces. In particular, Anbar Province continued to show significant improvements in security. Despite AQI’s assassination of Sheikh Abd al Sattar Biziah Fitikhan al Rishawi on the first day of Ramadan, the Sahawa al Iraq (SAI)² movement, under the leadership of his brother Sheikh Ahmad, continued its opposition to AQI and Sunni resistance elements. In the southern provinces, Iraqi forces have taken a more assertive role in the security of Basrah City in preparation for the transition of Basrah to PIC in December 2007.

While the GoI’s lack of progress on key legislation has been disappointing and has hindered “top-down” reconciliation, “bottom-up” reconciliation initiatives gained momentum as tribal and local outreach efforts expanded during this quarter. The Council of Representatives (CoR) passed an important pensions law, which has been signed by the Presidency Council, and some legislative progress has been made on the de-Ba’athification law (now known as the Accountability and Justice Law), which received two readings in the CoR. In addition, Iraq and the United States signed a Declaration of Principles for a Long-Term Relations of Cooperation and Friendship Between the Republic of Iraq and the United States of America on November 26, 2007, which establishes a framework for continued bilateral cooperation. Following this, the GoI signed the United Nations Security Council Resolution renewal letter, which is consistent with the road map laid out in the Declaration of Principles.

On the international front, on November 2-3, 2007, Turkey hosted the second Iraq Expanded Neighbors Ministerial Conference, which concluded with a commitment to establish a temporary office in Baghdad to support the Neighbors Process, the reiteration of broad international support for Iraq’s efforts to achieve political reconciliation, support for an expanded United Nations Assistance Mission in Iraq (UNAMI) and recommitment to the International Compact with Iraq (ICI). As part of its expanded mandate, UNAMI has committed to providing technical assistance and personnel to help staff the Neighbors Process support office. Since the last report, Iraq has made progress in implementing the ICI economic initiatives.

The Iraqi economy continues to improve and overcome many challenges to stability and growth. Estimated nominal gross domestic product (GDP) is US$60.9 billion. Real GDP will increase by an estimated 6.3% in 2007 as growth in the non-oil sector continues. The inflation rate has continued to decline due to the Central Bank of Iraq’s tight monetary policy implemented through appreciation of the Iraqi dinar. Year-on-year headline inflation as of October 2007 is 20.4%, which is down from 52.8% one year ago and year-to-date inflation is 4.2%. Iraq has maintained satisfactory performance on its Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) and has a Board date on December 19, 2007 for a new SBA program that is likely to be approved. Crude oil production and oil exports are higher than during the same period in 2006. State-provided electricity outputs for September through November 2007 averaged 107,581 megawatt hours, a 14% increase over production rates for the same period in 2006. Although the GoI will probably not fully execute its capital budget prior to the end of its fiscal year, Iraq has dramatically improved capital spending and, based on August data, has already executed the amount spent 2006. As of this writing, the CoR has held two readings of the draft budget law. Although the budget process is ahead of last year’s timeline, the CoR’s early December recess will delay approval of the budget until after the start of Iraq’s fiscal year on January 1, 2008.

As for development of the GoI’s security forces, the military and police continue to expand in number and improve in capability. Iraq’s basic combat and basic police training facilities continuously operate at or near capacity. As of November 15, 2007, the Coalition and the Ministry of Defense have generated 117 army battalions that are conducting operations at varying levels of capability; another 42 are currently in or planned for force generation. Ten divisions, 34 brigades, and 108 battalions have the lead in counterinsurgency operations in their areas of responsibility. Many elements of the Iraqi Army are now capable of conducting counterinsurgency operations, but most also remain dependent on Coalition enablers.

Coalition advisors report steady but inconsistent improvement in the abilities of the Ministry of Defense and the Ministry of Interior to perform key ministerial functions; develop and implement plans and policies; and provide direction and oversight to intelli-gence, personnel management, acquisitions, logistics, communications and budgeting. U.S.-funded programs and advisory efforts continue to improve the capabilities of the Iraqi forces but internal sectarian biases, commissioned and non-commissioned officer shortfalls, logistics deficiencies and a depend-ence on the Coalition for many combat support functions continue to hinder the Iraqi forces’ ability to operate without Coalition assistance.

In summary, tactical and operational momentum has been achieved, and there have been notable overall improvements in the security situation. These improvements, combined with an increase in provincial government expenditure rates, have contrib-uted to improvements in the delivery of essential services and other key programs to the Iraqi people. Cooperation with Iraqi and Coalition forces by tribal leaders—both Sunni and Shi’a—has advanced “bottom-up” reconciliation and assisted in countering extremism. The numerous “tribal awakening” movements and the CLC program are making progress at the local level, but challenges remain at the national level. The key to long-term success will be the GoI’s ability to capitalize upon local gains, pass key legislation and promote national reconciliation.