View the latest commentary on Iraq from The PRS Group. Now more a decade on from the overthrow of Saddam Hussein, Iraq remains deeply troubled by dangerous ethnic and sectarian divisions, woeful security conditions, and chronic political instability in Baghdad that has undermined the

1. Reproduction without written permission of The PRS Group, Inc. is strictly prohibited.
Quantitative Risk Global Expertise Independent
IRAQ: NATIONAL INTEGRITY AT RISK
Now more a decade on from the overthrow of Saddam Hussein, Iraq remains deeply troubled by dangerous ethnic
and sectarian divisions, woeful security conditions, and chronic political instability in Baghdad that has undermined
the central government’s efforts to firmly establish its authority throughout the country. Those weaknesses have long
prevented Iraq from realizing the potential of its massive oil reserves, and more recently have exposed the country to an
existential threat in the form of ISIL, a Sunni jihadist movement that over several weeks in June and July managed to
gain effective control over something close to one-third of Iraq’s territory.
The Iraqi armed forces, Shiite militias, and the Kurdish
military (peshmerga) have managed to halt the advance of
ISIL, helped greatly by air support from the US and other
international military forces. However, pushing ISIL out
of the areas it currently controls will be no easy task. The
militants completely overwhelmed the undisciplined
Iraqi soldiers, many of whom simply shed their uniforms,
dropped their weapons, and fled the battlefield. As a
result, the militants managed to rapidly take over key
towns in the north of Iraq, and, more important, gained
access to arms, ammunition, advanced weaponry, and
vehicles, all donated by the US, that were abandoned by
retreating Iraqi troops.
Any hope of pushing the group back and restoring government control over captured territory will, at a minimum,
require the formation of a stable, inclusive administration in Baghdad. On that score, Iraq’s track record does not offer
much cause for optimism.
The task of pulling together a coalition that includes Shiite, Sunni, and Kurdish factions was handed to Haider al-
Abadi, a member of former Prime Minister Nouri al-Maliki’s Islamic Dawa Party. A political moderate and former
exile, Abadi’s chief political asset is the fact that, unlike Maliki, he has done nothing to alienate the non-Shiite groups
on whose support the stability of his government will depend.
The new government, which was formed in haste against a backdrop of crisis, meets the basic criteria for inclusiveness
that is essential to creating even the possibility of stability. However, it is one thing to form a national unity government,
but quite another to hold it together. The jihadist incursion has further heightened sectarian tensions, with many Shiites

2. Founded in 1979, the PRS Group is among the earliest commercial providers of political and country risk forecasts. Origi-nally
the Political Risk Services division of Frost & Sullivan, Inc. and then of UK-based IBC Group (now known as In-forma),
the firm occupies a niche market in the risk sector through the application of two globally recognized, proprietary,
quant-driven, and back-tested methodologies: Political Risk Services (PRS) and the International Country Risk Guide
(ICRG). A number of products based on these two risk rating systems are produced at regular intervals throughout the year.
The firm and its methodologies for assessing risk are the product of research conducted by Professors William Coplin and
Michael O’Leary of the Maxwell School of Public Affairs at Syracuse University in conjunction with the US Department
of State and the CIA. The overall goal was to develop an intellectually rigorous way of assessing the various components of
country risk that could be applied to a range of institutional settings. In the wake of the Iranian Revolution, where many
foreign firms were nationalized, the importance of the work intensified.
Our publications and data are used extensively worldwide by investors and businesses, colleges and universities, private
equity groups, and all of the main multilateral institutions.
Christopher McKee, PhD
CEO & Owner
Client Relations
Office: +1 (315) 431-0511
Fax: +1 (315) 431-0200
custserv@prsgroup.com
Headquarters
The PRS Group, Inc.
5800 Heritage Landing Dr., Ste E
East Syracuse, New York
13057-9378 U.S.A.
www.PRSgroup.com
About Us Contact
Quantitative Risk Global Expertise Independent
Reproduction without written permission of The PRS Group, Inc. is strictly prohibited.
openly voicing suspicions that their Sunni compatriots are only too willing to collaborate with ISIL. Likewise, the
assignment of the Defense and Interior portfolios, a perennial source of conflict between the Shiite and Sunni blocs, has
not yet been determined.
At the same time, the occupation of the disputed city of Kirkuk by Kurdish military forces at the height of the jihadist
incursion in June also poses a potential obstacle to sustained cooperation between Kurdish and Sunni political forces.
There is also the still-unresolved issue of the legality of oil contracts issued by the KRG without the approval of the
Ministry of Oil, and a related controversy over the KAR’s direct exports of oil produced in the Kurdish region. Abadi has
devised a roadmap to resolve the main issues concerning Kurdish oil investments and territorial disputes, but the Kurds
are demanding action within three months, a time frame that would be logistically difficult and politically dangerous
even under stable conditions.