Post-War Economic Development in Iraq & Syria

April 2018 No Comments

Question (R6.5): After a long period of war, both Iraq and Syria are devastated and considerable rebuilding efforts will be necessary to make these countries economically sound again. Is there an opportunity to entice regional countries to invest and thus improve stability and inter-state relations in the region and decrease their (economical) dependence on western countries? What impact does foreign military sales have on the ultimate regional stability?

Authors | Editors: Canna, S. (NSI, Inc.)

Executive Summary

In studying what would motivate regional actors to support post-conflict reconstruction and development in Iraq and Syria, experts noted one concern that predominated the decision calculus of potential donors: the risk that ISIS or a similar group may resurge more quickly than efforts by regional and great power actors to foster economic stability and growth. In the absence of good governance and economic opportunities, the concern is that ISIS may regain a foothold among Sunni communities that least benefit from development aid administered by Shia-lead governments. But regional countries like Saudi Arabia, Turkey, Qatar, and Iran are expected to make significant investments and donations for post-conflict reconstruction. These countries—along with Russia and China—are also driven to invest for economic gains in terms of reconstruction contracts as well as to expand their spheres of influence in the region. This response highlights potential donors, motivations and disincentives for their contributions, as well as the role that Coalition foreign military sales may have on post-conflict stability.

Potential Donors & Their Motivations

We asked the experts which regional countries would likely be willing to donate reconstruction aid in Iraq and Syria. The table below lists potential donors as well as their incentives and disincentives for doing so. For reference, we list amounts pledged at the most recent donor conference in support of Iraqi reconstruction on 14 February 2018 that may provide insight into how willing each country might be to donate reconstruction aid in the future. As mentioned in the introduction, Ms. Jennifer Cafarella and Dr. Kimberly Kagan of the Institute for the Study of War argue that while Sunni Arab countries—particularly Saudi Arabia—are traditionally reluctant to invest in countries with Shia-dominated governments, in this case they are driven by a desire to prevent renewed insurgency. Turkey—which has historic ties to Iraq in terms of its physical proximity, affinity with Iraqi Turkmen, economic opportunities, and, more recently, its desire to return displaced populations to Iraq—might be expected to contribute significantly to post-conflict reconstruction in northern Iraq, according to Dr. Nicholas O’Shaughnessy of the University of London (UK). Iran has the resources and competence to invest heavily in post-conflict Iraq and Syria to bring the region securely into its sphere of influence, according to O’Shaughnessy. However, he notes that Sunni populations may find extensive Shia influence unacceptable, at least in Iraq. For many, it is too soon to tell what kind of post-conflict aid might be available in Syria as the outcome of its civil war remains unsettled.

While the topic of this response focuses on regional actors, Dr. Spencer Meredith of National Defense University writes that the US risks losing political influence in the region if it yields responsibility for reconstruction to regional countries. He notes that the absence of US presence in the region would open the door wider for other actors to influence the political, social, and economic trajectory of the Middle East. Furthermore, he points out that the focus on regional actors implied in the question ignores the important roles that Russia and China are likely to play in reconstruction. Russia, along with Iran, is seeking reconstruction contracts as payback for wartime expenses in Syria and Iraq (Cafarella & Kagan, Meredith). China, which is already the lender of first resort in Sub-Saharan Africa, and is making inroads in Latin America, could very well use its One Belt One Road (OBOR) initiative to increase its influence in the Middle East (Meredith).

Finally, Dr. Abdulaziz Sager from the Gulf Research Center, argues that it is not possible to entice regional countries to invest heavily in rebuilding Iraq and Syria. “There is simply no willingness by regional countries to invest in Iraq while it is still controlled to a large degree by Iran or while Syria is gripped by large degrees of uncertainty.” Dr. Sager argues that stability in Iraq and Syria will come only as a result of government reform. “And this is primarily the responsibility of the West who brought about many of the problems currently being witnessed. It would be false to assume that regional countries can be party to the guilt to force them to now take the lead in re-building these countries,” Dr. Sager notes.

Impact of Foreign Military Sales on Regional Security

The last aspect of this question asks what impact foreign military sales (presumably instead of reconstruction or humanitarian aid) would have on long-term regional stability. Contributors to this question were divided on whether the benefits of providing only military aid outweighed the risks of providing primarily social and economic reconstruction aid to Iraq and Syria. The table below outlines the risks and benefits of a military aid and sales only approach.

Risks

Experts cited two risks to relying primarily on military aid to support stability in post-conflict Iraq and Syria: a resurgence of Sunni extremism, and missing an opportunity to expand positive US influence in the region. Ms. Mona Yacoubian of the United States Institute of Peace along with Ms. Cafarella and Dr. Kagan argue that as long as Sunni communities lack economic opportunities, extremism will thrive. Furthermore, in terms of influence, the US would miss an opportunity to be seen as a credible, alternative source of support for Sunni civilians vulnerable to extremist recruitment (Cafarella & Kagan). Reconstruction funds could be used as a powerful source of leverage to pursue US national security and regional stability goals. These types of funds could also be used to push back expanding Iranian and Russian influence and stymie significant financial remunerations from reconstruction contracts. That is why Cafarella and Kagan argue that the USG must condition US aid to “ensure that developmental support empowers legitimate parties that adhere to international laws and norms.” Finally, experts also point out that once military aid in the form of weapons and equipment is given, it may be repurposed for conflicts against US interests.

Benefits

If the US preference is to leave the region relatively stable as it reduces the US military footprint there, an approach based solely on military aid and sales may be the most practical solution, according to Dr. Meredith. He notes that this approach is simple, focused, and achievable. Furthermore, he believes that it frees the US from the “occupier” and “liberalizing destabilizer” narratives and allows it to act as a “Democratic Great Power.” Along these lines, this approach allows the US to turn the table on Russia and allows it to act as a spoiler to Russia’s development and stabilization efforts.

Contributors

Jennifer Cafarella, Institute for the Study of War; Ambassador James Jeffrey, Washington Institute for Near East Policy; Dr. Kimberly Kagan, Institute for the Study of War; Dr. Spencer Meredith III, National Defense University; Dr. Nicholas Jackson O’Shaughnessy, London University (UK); Dr. Abdulaziz Sager, Gulf Research Center; Ms. Mona Yacoubian, United States Institute of Peace.