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Kurdistan - Iraq - Corruption

Widespread and pervasive corruption and lack of government transparency, including with regard to oil revenue, were major problems in the IKR. According to the Kurdistan Commission on Public Integrity, corruption in the IKR was extensive. Weak budgetary oversight and lack of training for personnel further hindered the commission from fighting corruption effectively. Allegations and rumors of missing oil revenue were rampant, but there had been no audits or unbiased investigations as of year’s end.

Political nepotism and weak governance in Kurdistan led to corruption, according to the Norway-based U4 Anti-corruption Resource Center, further ensuring that resources were not properly invested. "Levels of corruption in the Kurdistan Region of Iraq, while lower than in Iraq as a whole, are relatively high compared to other countries in the region. Corruption challenges are rooted in the strong role that the two established political parties have in the political system, nepotism, a weak bureaucracy and the difficulties associated with managing oil revenues. While progress has been made on delivering the government’s 2009 ‘Good Governance and Transparency Strategy’ and the ‘Vision for 2020’, there have been few high-profile convictions for corruption cases. A challenging media environment remains a serious constraint on effective anti-corruption reform."

Corruption continues to be a problem in Iraq, stymying economic growth and adding to the pervasive distrust and political frag- mentation. Transparency International’s 2011 "Corruption Perceptions Index" gives Iraq a 1.8 out of 10, which places it in the bottom 10 of the 182 countries ranked and (right below Haiti) and qualifying it as "highly corrupt."

Kurdistan’s ruling Barzani family controls a large number of commercial enterprises in Iraqi Kurdistan, with a gross value of several billion US dollars. Barzani has been accused by critics of amassing huge wealth for his family instead of serving the population. Barzani’s son is the Kurdistan region’s intelligence chief and his nephew Nechirvan Barzani is the prime minister. One of the most sensitive subjects is the Barzanis’ involvement in the economy of the oil-rich oil Kurdish region. Barzani family has long been the dominant force in Kurdish politics, holding various top positions in the regional government. One Barzani brother has a share of the Coke franchise, another has Pepsi.

Corruption, including bribery, raises the costs and risks of doing business. Corruption has a corrosive impact on both market opportunities overseas for international companies and the broader business climate. It also deters international investment, stifles economic growth and development, distorts prices, and undermines the rule of law.

Tawfik-Shukor et al. described the Kurdish health system as “centralised, politicised, nontransparent, disorganised with no clear governance, regulatory financing or accountability framework let alone vision or goals”. There are also accusations of corruption, predatory behaviour and mismanagement.

The theory of street-level bureaucracy elucidated by Michael Lipsky employees of the state with the discretion to dispense public rewards and sanctions, including teachers, law enforcers and health workers. The Kurdish health system is intensely overcrowded. The hospital-based health-seeking culture, lack of appointment system and the fact that the public system is free, or has a very minimal charge for services, mean that a large number of patients utilize the services available, within the 2- to 3-min time slot designated for each consultation.

Along with being poorly motivated, physicians in Kurdistan have been described as patient-unfriendly, inefficient and corrupt. Negative pressures as well as constant exposure to dilemmas, for instance, the ever-present gap between demand for services and limited resources, as well as high workload and low government salaries, are said to compel behaviours and practices that enable them to cope with such unfavourable conditions. Low government salaries, combined with the high expectations health workers have of their work, mean it is inevitable that health workers will seize opportunities that are rewarding professionally and financially. It is not so much the morally corrupt few, as the behaviorally corruptible many who are the problem.

The Kurdistan Regional Government argues Iraq’s dismal rankings regarding corruption cloak a less corrupt business environment in the IKR. Since at least 2009 the KRGs’ Office of Governance and Integrity has campaigned for separate treatment for the IKR in Transparency International and other reporting. To investigate government misconduct, the KRG launched a Transparency and Integrity Board.

Fundamental reforms promised in 2016 to overcome Iraqi Kurdistan Region’s economic crisis are on the right track and 93 corruption cases have been documented to the public prosecutor and commission of integrity, Massoud Barzani announced on 10 June 2016.

Critics say the security forces are heavy-handed, and the government still owns a piece of everything, but there is no denying Kurdistan welcomes private sector investment. Investors may come under pressure to take on well-connected local partners to avoid systemic bureaucratic hurdles to doing business. Similarly, there are widespread reports of corruption involving government payrolls, ranging from “ghost” employees and salary skimming to nepotism and patronage in personnel decisions.

There are three principal institutions specifically designated to address the problem of corruption in Iraq. CPA Order 57 established Inspectors General (IGs) for each of Iraq’s ministries. The Commission of Integrity (COI), initially established under the Coalition Provisional Authority (CPA), is an independent government agency responsible for pursuing anti-corruption investigations, upholding enforcement of laws and preventing crime. The COI investigates government corruption allegations.

Neither the COI nor the IGs have effective jurisdiction within the IKR. Regional Government revenues and expenditures are audited by the Kurdistan Board of Supreme Audit with KRG Parliament oversight. The Iraqi Kurdistan Parliament (IKP)KRG passed the Commission on Public Integrity (Law No. 3 of 2011), which established an independent regional Commission of Integrity that has yet to be staffed. In 2014 the Commission distributed more than 700 financial disclosure forms to high-ranked KRG officials. The IKP KRG Parliament has also established an a permanent integrity committee to promote anticorruption efforts in the region, but during 2012 the committee’s chairman and three of the other seven members resigned and had not been replaced at the time of publication of this statement.

The Kurdistan Commission on Public Integrity is responsible for distributing and collecting financial disclosure forms in the IKR. The commission reported that by August 2015 the Kurdistan region’s president, all members of its parliament, and 20 of its 23 ministers had submitted financial disclosure reports. There was no information available indicating that public officials faced penalty for financial nondisclosure.




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