ISHM: March 2 - 9, 2023

Key Takeaways:

• Court Targets Former Finance Minister And Close Kadhimi Aides; Sudani Visits Cairo; Senior U.S., German Officials Visit Iraq -- On March 3, an Iraqi court issued warrants to freeze the assets of former Finance Minister Ali Allawi and three senior aides to former PM Kadhimi for allegedly "facilitating" the infamous theft of $2.5 billion from government tax deposit accounts. Kadhimi dismissed the warrants as a political witch hunt designed to distract from the real culprits. On March 5, PM Sudani visited Cairo and met with Egypt's President Abdul-Fattah al-Sisi as the countries continue to enhance ties with each other and neighboring Jordan. On March 7, Defense Secretary Lloyd Ausitn visited Baghdad and Erbil for meetings with Sudani, his Iraqi counterpart, and Kurdish leaders. Austin said his visit was on an invitation from Baghdad, and stressed that Washington would continue to support Iraqi forces in the fight against ISIS. Austin also condemned Iranian rockets attacks on Kurdistan, and emphasized that Erbil and Baghdad, and their security forces, should work together. On March 7, Germany's Foreign Minister visited Iraq for talks with Iraqi leaders focusing on Iraqi refugees in Germany, Berlin's assistance to Iraq in dealing with climate change and economic development, and the Sinjar normalization agreement. In other developments, on March 4, Iraq's parliament resumed discussions about amending the provincial elections law amid continued objections from small parties and independents. Coordination Framework representatives said a final draft endorsing their amendments could be finalized by the end of the week. more...

• New Mass-Casualty Attack In Diyala Raises Fear Of Security Collapse -- On March 6, eight civilians were killed and at least two were seriously injured during a complex militant attack near the Muqdadiyah district. The attack began with the detonation of an IED targeting a civilian vehicle followed by small arms fire targeting people who gathered at the explosion site. All of the victims were members of local tribal leader, Sheikh Mustaf al-Tamimi. The attack, the latest in a string of incidents that raised fear about deteriorating security in Diyala, prompted PM Sudani to visit the province and call a meeting with security commanders whom he gave two weeks to extend government control over volatile parts of the province. In other developments, between March 3 -- 7, the explosions of two other IEDs in Kirkuk and Salah ad-Din killed a former head of security for the Iraqi Turkmen Front party and one PMF fighter. more...

• Lukoil Eyes 30,000 BPD From The Eridu Field; TBI To Loan KRG IQD400 Billion; Baghdad Asks Ankara To Release More Water As Drought Looms -- On March 6, Iraq's Oil Ministry signed the commercial development agreement for the Eridu oil field with Russia's Lukoil and Japan's Inpex. The field is to produce 30,000 bpd by 2025, with an ultimate production target of 250,000 bpd. On March 7, Rudaw reported that the Trade Bank of Iraq (TBI) agreed to a proposal by PM Sudani to loan the KRG IQD400 billion in stopgap funding until the KRG can get its share of the federal budget. On March 8, Iraq's Water Resources Ministry said Baghdad made an official request to Turkey to release a combined 900 cubic meters per second of water through the Tigris and Euphrates rivers to help Iraq deal with an intense water shortage that's impacting large parts of the country. Last week, the Water Resources Minister warned that the Euphrates could dry completely if Turkey continued to ignore Iraq's demands to release more water. In other developments, on March 7, Iraq's Planning Ministry reported that inflation had gone up 3.6% in January. more...

For more background on most of the institutions, key actors, political parties, and locations mentioned in our takeaways or in the stories that follow, see the ISHM Reference Guide.

Court Targets Former Finance Minister And Close Kadhimi Aides; Sudani Visits Cairo; Senior U.S., German Officials Visit Iraq

On March 3, an Iraqi court in Baghdad issued warrants to freeze the assets of former Finance Minister Ali Allawi and three senior aides to former Prime Minister Mustafa al-Kadhimi for allegedly "facilitating" the infamous theft of $2.5 billion from government accounts holding tax deposits. The three officials include Kadhimi's former chief of staff Raed Johi, his adviser, Mushriq Abbas, and private secretary, Ahmed Najati. The asset freeze warrants also targeted two individuals, Abul-Amir Hassoun and Mohammed Hassoun, who were identified as Kuwaiti businessmen with ties to the former Finance Minister. Kadhimi defended his former associates, saying they had no connection to the matter and had fulfilled their legal duties to the investigation. The former prime minister dismissed the warrants as a witch hunt that's politically motivated and designed to hide the tracks of the real culprits.

Between March 3 -- 7, Iraq's Integrity Commission said that courts in Baghdad and Dhi-Qar had ordered several former senior government officials to appear in court in connection with various alleged cases of corruption. The targeted officials included three former general directors of the Iraqi Civil Aviation Authority, a former chairman of the National Pensions Commission, a former Minister of Culture (along with his deputy and office chief), and a former governor of Dhi-Qar province.

On March 4, Iraq's parliament resumed discussions about proposed amendments to the provincial elections law amid fresh (but small-scale) protests against the amendments in Baghdad and several southern provinces. During the Saturday session, ruling parties in favor of the amendments made a new push to adopt the modified Sainte Lague system of proportional representation instead of the single non-transferable vote system favored by independent lawmakers and small parties. Moeen al-Kadhimi, a representative from the Coordination Framework, said the final draft could be finalized and passed by the end of the week, expecting the legislation to treat each province as a single district, and adopt a quotient of "1.7 or 1.9" in calculating the electoral threshold in the modified Sainte Lague system. In related updates, the parliamentary legal committees announced after a subsequent meeting on March 7 that its members insist on canceling out of country voting because of "lack of feasibility and high cost."

On March 5, Iraqi Prime Minister Mohammed al-Sudani visited Cairo where he met with his Egyptian counterpart Mustafa Madbouli and Egypt's president Abdul-Fattah al-Sisi as the countries continue to enhance ties with each other and neighboring Jordan. A statement by Sudani's office said the Iraqi prime minister's talks in Egypt focused on expanding bilateral cooperation in various sectors, increasing trade, and activating the joint committees formed by the two countries. After the meetings, Egypt's prime minister alluded to plans to expand existing power grid connections with Jordan from 550 megawatts to "2000-3000 megawatts...to reach Iraq too."

On March 6, Masrour Barzani, the prime minister of the Kurdistan regional government (KRG) and senior figure in the Kurdistan Democratic Party (KDP) called on his cabinet ministers from the rival Patriotic Union of Kurdistan (PUK) to end their boycott of cabinet meetings. Barzani said that he had sent multiple letters to the PUK ministers asking them to rejoin the cabinet but "unfortunately, they were not allowed [by PUK leaders] to participate so far. The PUK members of the KRG cabinet have been refusing to participate in cabinet meetings since December of last year over what the party described as the unilateral tendencies of the KDP in governing the region.

On March 7, U.S. Defense Secretary Lloyd Ausitn visited Baghdad for meetings with Prime Minister Sudani and Iraqi Defense Minister Thabit al-Abbasi. Upon his arrival in the Iraqi capital, the U.S. defense chief said he was on a mission "to reaffirm the U.S.-Iraq strategic partnership as we move toward a more secure, stable, and sovereign Iraq." Speaking at a press conference, Austin said his visit was on an invitation from the Iraqi government, and stressed that Washington would continue to support Iraq's security forces in the fight against ISIS. A statement by Sudani's office said the prime minister expressed his government's "keenness to strengthen and consolidate relations with the United States of America at various levels and fields." Secretary Austin later traveled to Erbil, where he met with Nechirvan Barzani, the president of the Kurdistan region. Speaking at a joint press conference with Barzani, Austin condemned Iranian rockets attacks on the region, emphasized that Erbil and Baghdad and their security forces should work together, and also urged political leaders in Kurdistan to resolve their differences.

On March 7, Germany's Foreign Minister Annalena Baerbock visited Iraq for meetings with Prime Minister Sudani, her Iraqi counterpart Fuad Hussein, and other Iraqi leaders. During a joint press conference, Hussein said he and Baerbock discussed the conditions of Iraqi refugees in Germany, Berlin's assistance to Iraq in dealing with climate change and rebuilding Iraq's economy and infrastructure. Hussein also said they discussed the war in Ukraine, calling for an end to the conflict. During their meeting, Sudani and Baerbock attended a signing ceremony for a five-year agreement between Germany's Siemens and Iraq's Ministry of Electricity to overhaul and maintain three power plants (Kirkuk, al-Rashid, and al-Sadr). During the talks, the visiting minister also affirmed Germany's support for the Iraqi government's efforts to introduce economic and governance reforms. The German minister later met with Kurdish leaders in Erbil and Sulaymaniyah, where she discussed internal political tensions in Kurdistan, the relations between the Kurdistan region and Baghdad and emphasized the need to implement the Sinjar normalization agreement to provide suitable conditions for the return of displaced communities.

On March 9, the Ishraqat Kanoon bloc in parliament presented a request to the speaker of parliament to adopt the electronic voting mechanism to replace the traditional show of hands. The request letter, endorsed by the signatures of 175 lawmakers, argued that reactivating the electronic voting system, which was abandoned years ago, would increase transparency and streamline the legislature's meetings.

On March 9, KRG President Nechirvan Barzani arrived in the Emirati capital of Abu Dhabi on an invitation from UAE President Mohammed BIn Zayid. Rudaw reported that Barzani is scheduled to hold talks with Bin Zayid focusing on trade relations and energy.

Sources cited in this section include: Nas News, al-Hurra, ISHM archives, Rudaw, Middle East Eye, al-Sumaria, Iraq's parliament, al-Mada, INA, Iraqi PM's office, AP, Shafaq, Kurdistan24, Social Media, PUKMedia, al-Araby.

New Mass-Casualty Attack In Diyala Raises Fear Of Security Collapse

On March 3, security sources in Kirkuk said that an improvised explosive device (IED) detonated under the vehicle of Ahmed Tahir, a former head of security for the Iraqi Turkmen Front party. The explosion, which occurred at the residence of the targeted individual in central Kirkuk resulted in his death.

On March 6, security sources in Diyala said that five civilians were killed and at least three were injured during a complex militant attack near the village of al-Haziniyah, south of the Muqdadiyah district. According to the sources, the attack began with the detonation of an IED targeting a civilian vehicle followed by small arms fire targeting people who gathered at the explosion site. Subsequent reports said the attack left eight fatalities and two severely injured. All of the victims were reportedly members of local tribal; leader Sheikh Mustaf al-Tamimi. The attack, which is the latest in a string of incidents that raised fear about deteriorating security in Diyala, prompted Prime Minister Sudani to visit the province and call a meeting with security commanders there on Wednesday. A government statement said Sudani ordered military reinforcements to the province and gave local commanders two weeks to extend government control over volatile parts of the province.

On March 7, the Popular Mobilization Forces (PMF) said that an IED explosion struck a vehicle carrying PMF fighters during operations in the Amerli sector in Salah ad-Din province. The explosion killed one PMF fighter and wounded another fighter.

On March 8, security sources in Kirkuk said that ISIS militants attacked Iraqi security forces with small arms fire at a village west of the Tuzkhormatu district, south of Kirkuk. The attack killed one servicemember and wounded another.

On March 8, the Security Media Cell reported that Iraqi F-16 jets conducted three airstrikes against a cell of ISIS militants in the Pulkhana mountains in the western parts of Salah ad-Din province. Ground troops inspecting the site of the airstrikes confirmed that three militants were killed in the operation.

*Sources cited in this section include: al-Sumaria, NINA, Shafaq, Ultra Iraq, ISHM archives, Iraqi PM's Office, INA. *

Lukoil Eyes 30,000 BPD From The Eridu Field; TBI To Loan KRG IQD400 Billion; Baghdad Asks Ankara To Release More Water As Drought Looms

On March 6, Iraq's Oil Ministry signed the commercial development plan agreement for the Eridu oil field with a consortium of foreign oil companies operating the field. Oil Minister Hayan Abdul-Ghani said the field is expected to produce 30,000 barrels per day (bpd) by 2025 during the first phase of the development, adding that peak production is expected to reach 250,000 bpd. Eridu (formerly known as exploration block 10) is located in Dhi-Qar and Muthanna provinces, and holds an estimated 12.9 billion barrels in reserves, according to the ministry. The operating consortium comprises Russia's Lukoil and Japan's Inpex.

On March 7, Iraq's Planning Ministry reported that inflation during the month of January 2023 increased 3.6% compared to December of 2022. The Ministry noted that inflation levels in January were up 7.2% when compared with the same month in 2022. According to the ministry, the cost of transportation increased by 7.7%, while dining costs were up 6.7%, and tools and equipment rose 4.2%. Additionally, foods and nonalcoholic beverages increased by 3.8%, and miscellaneous goods and services increased by 3.9%.

On March 7, the Iraqi government decided to form a team led by the Ministry of Reconstruction, Housing, and Public Works to prepare plans to create new cities to address housing shortages across the country. According to a government statement, the new team will be empowered to approve plans for new urban developments and negotiate with developers and investors for the execution of development projects using "innovative partnership models" with the private sector.

On March 7, *Rudaw *reported that Prime Minister Mohammed al-Sudani had asked the Trade Bank of Iraq (TBI) to extend a loan of IQD400 billion to the Kurdistan regional government (KRG). The news came days after reports that the KRG and federal government had reached a preliminary agreement about the KRG's share of the federal budget. A member of the parliamentary finance committee with knowledge of the proposed loan said that TBI management had approved the loan request, which would be repaid from the KRG's share of the federal budget when released.

On March 8, a spokesman of Iraq's Water Resources Ministry said the country had made an official request to Turkey asking the upstream country to release additional amounts of water to the Tigris and Euphrates rivers to help Iraq deal with an intense water shortage that's impacting large parts of the country. A ministry spokesman said the request to release a combined 900 cubic meters per second from the two rivers was made by Iraq's Defense Minister Thabit al-Abbasi during a recent visit to Ankara. The spokesman explained that the additional release was supposed to begin on March 5, noting that it would take several days after that to determine how much water the Turkish side actually decided to send downstream to Iraq. Last week, Water Resources Minister Aoun Thyab warned that the Euphrates could dry completely if Turkey continued to ignore Iraq's demands to release more water. Thyab added that Turkey has been releasing only half of the 500 cubic meters per second that Syria and Iraq combined are entitled to under existing agreements.

On March 9, the Central Bank of Iraq (CBI) issued instructions to all banks to exclusively use the local currency in all electronic transactions, including at ATMs, points of sale, and other electronic payment platforms . The move is part of CBI measures meant to mitigate the ongoing shortage in foreign currency that has negatively impacted the value of the dinar in recent months. As the markets closed on Thursday, the exchange rate on the parallel market was around IQD1,578 to $1, which remains significantly higher than the official rate of IQD1,300 to $1 set by the Central Bank of Iraq (CBI) in February.

*Sources cited in this section include: Iraq's Oil Ministry, INA, Nas News, Rudaw, ISHM archives, al-Sumaria, NRT. *