Iraq After the Sharm el-Sheikh Meeting

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By Emile El-Hokayem and Elena McGovern – Earlier this month, more than sixty nations gathered in Sharm el-Sheikh in a show of support to Iraq’s battered institutions. This ministerial-level meeting, chaired by UN Secretary General Ban Ki-Moon,  was meant to increase international understanding of Iraq’s various needs and affirm the legitimacy of Iraq’s new institutions by adopting the International Compact with Iraq, a plan jointly developed by Iraq and international organizations, that maps a road to the political and economic recovery of Iraq. Sadly, however, little substantive progress was achieved.

The International Compact with Iraq (ICI) details the steps and strategies Iraq intends to adopt to overcome its current ills. It is based on the compelling and parallel assumptions that an international commitment is indispensable for state-building and that Iraq needs to commit to a transparent work plan to attract foreign support. Its effectiveness, however, is as contingent on political progress and state consolidation inside Iraq as it is on regional and international buy-in.   

Significant progress was made at Sharm el-Sheikh on the issue of debt relief.  The international community forgave $30 billion dollars in prewar debt, including Egypt, China, the United Kingdom, Spain and South Korea. But resistance remains. Most notably Saudi Arabia, while agreeing to forgive up to 80% of Iraqi debt, has yet to finalize its commitment. Other key creditors, mainly Russia, previously Iraq’s major trade and arms procurement partner, and Kuwait, which is owned reparations from its 1990 invasion by Iraq, failed to make offers of immediate debt relief.

The ICI also requests financial assistance to promote economic development and the rebuilding of vital infrastructure. Iraq’s needs are considerable, and oil revenues not as high as expected given the decrepit state of its oil facilities and the siphoning of revenues by a number of actors. Iraq must create an environment conducive to economic growth. The hope is that micro-lending, loans to small and medium enterprises, and the planned restarting of state-owned industrial plants will create jobs and lure the unemployed away from radical groups. To this end, several countries have offered assistance to reform Iraq’s banking and financial sectors.

Additionally, at the initiative of the Iraqi government, three working groups to address refugee issues, border security and energy and electricity have been established. The goal is to associate all concerned countries to a problem-solving approach on discrete topics. Iraqi refugees currently exceed 2 million, with more than a million in Syria. This massive exodus is depriving Iraq from human and financial capital, and could cause economic and political dislocation within host countries. Common management of this crisis is essential to mitigate its potential consequences. Border security is another sensitive issue, as Iraq’s porous borders are allowing foreign fighters to join the ranks of the anti-coalition and anti-government forces. These working groups are a good way to engage Iraq’s neighbors on both a strategic and day-to-day basis, however the clear lack of political will suggests that they will fail to address the core of these issues.  

The European Union used the ICI forum to reaffirm its commitment to the future of Iraq.  In addition to the 14.2 billion euros of financial assistance that the EU has given to Iraq since 2003, continued assistance will amount to another 1.8 billion euros in 2007. The Europeans have also committed to building the capacity of the Iraqi government, strengthening energy cooperation and continuing humanitarian support.

But at the end of the meeting, the EU also offered a heavy dose of reality. While an EU statement confirmed that it was “ready to continue to develop a close co-operation and partnership with Iraq,” German Foreign Minister Frank-Walter Steinmeier described the meeting as only a “first step to get the parties involved in talks,” and “certainly…not a breakthrough.”  

Overall, the meeting focused both the international community and the Iraqi government’s attention on the most pressing issues needed to stabilize the country, including the restoration of good governance and the rule of law.  The responsibility to accomplish such goals lies in large part with Iraq’s political actors, the most powerful of which seem utterly uncooperative.  The hope is that post-Sharm el-Sheikh, the Iraqis will demonstrate a deeper commitment to follow through with its promises and obligations.  

Surprisingly, the Sharm el-Sheikh conference also served to modestly attenuate the tensions between the United States and several regional states. After much speculation regarding a possible meeting between Secretary of State Rice and Iranian Foreign Minister Manoucher Mottaki, no real contact between the two countries materialized save an exchange of pleasantries and a brief meeting between U.S. ambassador to Iraq Ryan Crocker and Iranian deputy foreign minister Abbas Araghchi. But Rice did speak to someone – Syrian Foreign Minister Walid al-Moallem.  In the first diplomatic contact between the two countries in over two years, the 30-minute meeting focused on the passage of foreign fighters over the border between Syria and Iraq. Rice described the meeting as “professional.”

Despite the good intentions of Sharm el-Sheikh, many of Iraq’s goals for the meeting missed their mark.  Several states appeared unwilling to act in the spirit of the summit and to make substantial changes to their policies. Additionally, the drama between the United States and Iran distracted conference attendees, and the media, from the real issues at hand.  Was the conference important? Yes. But whether or not it was the much-needed catalyst for a step forward in Iraq is yet to be seen. 


Emile El-Hokayem is a Research Fellow at the Stimson Center with the Southwest Asia/Gulf project, focusing on the security and politics of the Persian Gulf, with a particular emphasis on the Iranian nuclear issue, Iran-GCC relations and regional security.   

 Elena McGovern is a Research Assistant with the Southwest Asia/Gulf project. 

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