PARTNER-ATLAS

IRAQ

as a partner for securing essential natural resources and protecting the climate

01 — The key questions for the Partner-Atlas

RELEVANCE: What relevance does Iraq have for Germany with regards to "securing essential resources and protecting the climate"?

Iraq has the world’s fifth largest oil and twelfth largest natural gas reserves. The country is a founding member of the Organisation of Petroleum Exporting Countries (OPEC) and, in recent years, has become its second largest producer. The Iraqi government considers to further expand the oil and gas sector in the coming years, thereby increasing production capacities even more, although experts as well as members of the government call for diversifying the Iraqi economic and energy sector

Iraq plays an important role in the stability of global energy markets, which is also of great importance for Germany as a successful technology and export nation.

Iraq is also a country that is significantly affected by climate change and the related consequences, for example regarding water supply. In addition to rising temperatures, these include prolonged periods of drought, widespread desertification and the salinisation and decrease in the flow rate of rivers. Both the Tigris and Euphrates originate in eastern Turkey, whose dam projects are causing further conflicts over water in the region. Similarly, Iranian dams have reduced the flow of water in two major rivers running through the northeast of Iraq and joining the Tigris. In addition, pollution and the absence of a wastewater infrastructure make it difficult to supply the population with drinking water. Last but not least, the oil industry is contributing to water scarcity due to the high water consumption needed for oil production.

Moreover, Iraq has so far been meeting more than 90 percent of its growing domestic energy needs with fossil fuels. There is also a significant need for modernisation in the areas of energy efficiency and pipeline stability. Iraq is therefore also relevant for Germany when it comes to implementing a comprehensive climate protection policy, where countries are supported in reducing their CO2 emissions and in dealing with the consequences of climate change.

Germany also has an interest in Iraq becoming firmly established as a long-term anchor of stability in the Middle East. The chances of success of such an undertaking depend not only on domestic and security policy challenges and the immediate fight against the consequences of the coronavirus pandemic, but also on whether the country succeeds in modernising its energy sector, thereby generating socioeconomic prospects, ensuring security of supply, and dealing with ecological challenges, particularly as far as water is concerned.

WILLINGNESS: To what extent is Iraq willing to work with Germany in realising this interest?

Germany and Iraq have close and friendly relations, especially in the economic sector. Germany is highly regarded for its expertise in industry and technology, especially in the energy sector. In addition to being recognised for its economic cooperation, Germany also enjoys a high reputation in Iraq for its support in the fight against the so-called Islamic State (IS).

In general, the Iraqi government is prepared to fully support foreign investors. The electricity and water sectors are given priority. The need for action is considerable here and this is also partly reflected in corresponding national strategies. In 2014, the Iraqi Ministry of Water Resources developed a strategy for water and land resources in Iraq (SWLRI), which includes measures for water, food and energy security, along with environmental protection, for the period 2015 to 2035. The government’s projects would require 4 billion US dollars per year. Iraq also plans to source 10 percent of its electricity from renewable energies by 2028. The investment required for this is estimated at 50 billion US dollars. In the long term, the share of renewable energies is to be increased to up to 40 percent.

The possibility of successfully implementing these strategies depends not only on issues of political stability but also on the availability of expertise and capacities. There is scope here for sustainable and long-term partner projects within the framework of German-Iraqi cooperation.

STATUS QUO: How close is Germany and Iraq 's current cooperation in this area?

The current focus of German engagement in Iraq is primarily on humanitarian issues and security policy. Since 2014, at the peak of the IS reign of terror, the German Federal Government had provided more than 1.7 billion euros for humanitarian aid, stabilisation measures, and long-term development cooperation. This makes Germany the second largest donor after the USA. However, only about 4 percent of the BMZ’s total budget for Iraq has so far been allocated to local and selective infrastructure projects in the areas of water and wastewater.

Energy policy cooperation with Iraq is currently focusing on modernising the power grid and developing power plant capacity, but also with the aim of reducing CO2 emissions and thus contributing to climate protection. The private sector is also playing a central role in this. An example of this is the German technology group, Siemens, receiving an initial order worth 700 million euros for the construction of a gas-fired power plant near Baghdad, as part of the Iraqi road map for reconstructing the power grid. The country plans to invest a total of 12 billion euros in its power grid.

POTENTIAL: What is the potential for strengthening the partnership between Germany and Iraq in this area?

Basically, there is an urgent need for investment in almost all public sectors in Iraq, including electricity and water supply, which is still suffering from the destruction of decades of war and conflict.

The reconstruction and strengthening of these infrastructures create opportunities for German-Iraqi cooperation projects: both in public development cooperation with respect to reconstruction aid or in improving the water supply for the Iraqi population, and in the private sector, as is evident from Siemens’ commitment to the Iraqi energy sector. Projects that have already begun – such as those aimed at stabilising the drinking water and sanitation supply for refugee camps and surrounding host communities in the Autonomous Region of Kurdistan (ARK) – provide a model for larger-scale infrastructure projects for the whole of Iraq.

POLICY RECOMMENDATION: What in German foreign policy has to change in order to fully exploit this potential?

Iraq faces significant challenges that the country is not able to meet on its own and that are not limited to water scarcity, the consequences of climate change and a deficient energy infrastructure.

Nevertheless, Germany should continue to expand its engagement in these sectors with specific projects. This should also include intensive support for Iraq in building up capacity for monitoring the implementation of national strategies in these sectors, on the basis of which problems can be identified and followed up on during operational implementation.

The protests in Iraq that have been ongoing since October 2019 are also driven by the population’s dissatisfaction with a poor water and electricity supply. Improvements in these areas are a prerequisite for diversifying the Iraqi economy, reducing its dependence on oil (and not just when oil prices are on the decline) and creating much-needed jobs. Political reforms and anti-corruption measures also need to be implemented in Iraq in order to stabilise the country – in addition to strengthening the ailing healthcare sector in the wake of the fight against the coronavirus pandemic. Germany should thus actively call for Iraq to address these issues, while pointing out that, otherwise, the engagement of the German private sector and the implementation of development policy projects will be made considerably more difficult.

Only if progress is made in alleviating the country’s key socioeconomic and environmental problems and in creating a new basis of political legitimacy, can Iraq become an anchor of stability in the Middle East and a partner for dealing with global resources and climate issues.

Gregor Jaecke heads the KAS Syria / Iraq office; Judith Butzer was a research assistant at the KAS Syria / Iraq office.

IRAQ

  • Population: 40,263,275
  • Capital: Bagdad
  • Interest: Securing Essential Natural Resources and Protecting the Climate
  • Region: The Middle East and North Africa
  • Potential partner countries: Algeria, Iraq, Morocco, Qatar, Saudi Arabia

04 — The region

The Middle East and North Africa

logo

SAUDI ARABIA

The relevance of Saudi Arabia for Germany’s economic interests results from the country’s fundamental importance for stability and development in the Near and Middle East, the efforts to modernise its economy, and its oil wealth.

  • Population: 34,813,871
  • Capital: Riyadh
LEARN MORE
logo

IRAQ

Iraq has the world’s fifth largest oil and twelfth largest natural gas reserves. The country is a founding member of the Organisation of Petroleum Exporting Countries (OPEC) and, in recent years, has become its second largest producer. The Iraqi government considers to further expand the oil and gas sector in the coming years, thereby increasing production capacities even more, although experts as well as members of the government call for diversifying the Iraqi economic and energy sector.

  • Population: 40,263,275
  • Capital: Bagdad
LEARN MORE
logo

ALGERIA

In terms of area, Algeria is the largest country in Africa and a key security player in the Sahel. Algeria works intensively with the countries of the region on security issues. This is undertaken within the framework of the respective bilateral relations as well as via regional mechanisms, such as the Nouakchott Process of the African Union (AU), which supports the security policy cooperation of eleven states in West Africa, the Maghreb, and the Sahel.

  • Population: 43,886,707
  • Capital: Alger
LEARN MORE
logo

TUNISIA

Secularisation and modernisation have shaped Tunisia’s policies since independence in 1956, especially under the leadership of then President Habib Bourguiba, and continue to have an impact today. Recent representative surveys show that Tunisians feel that they belong first and foremost to their country, then to Islam, and only to a much lesser extent to the Arab world. A clear majority, especially in comparison to the neighbouring countries of Libya, Morocco, and Algeria, favour the separation of state and religion.

  • Population: 11,824128
  • Capital: Tunis
LEARN MORE