Expert Commentary

A Western "Fix" For Iraq? Forget It.

This article takes a look at the importance of history when assessing political risk. Not doing so can prove disastrous, as the situation in Iraq illustrates.

Political Risk
April 2004

There was a lot of bipartisan agreement on the need to invade Iraq last year. It turns out that some of the intelligence used to secure Congressional votes to justify the invasion was flawed in a number of fundamental respects, even though it was thought to be accurate at the time. There is little doubt that some members of Congress who voted for the invasion at the time would not have knowing what they know now. The problem is that the deed is done and the Bush Administration, Congress, and the American people must consider what comes next in Iraq.

It was initially thought by some in the U.S. government that the liberation of Iraq would result in an outpouring of gratitude by a cross-section of Iraqis. Having been under the thumb of such a brutal dictator for so long, logically, it made sense that this might be the case. What I fail to understand, however, is why a closer reading of the history of Iraq was not taken into consideration. If Iraqi history had been examined and taken seriously, no one should have come to that conclusion. Although other agendas may have spurred our path to war, a good look at history would surely have led us to foresee the mess we are in today.

This article examines the importance of history when assessing political risk, and why it is particularly important for companies to make a thorough assessment of the political environment in which they are to participate before making the decision with a cross border trade or investment transaction.

The Importance of History

Consider this brief snapshot of Iraqi history.1 What is today known as Iraq has, throughout history, been composed of separate and distinct ethnic and religious groupings. In ancient times, Iraq was home to several civilizations, including the Sumerians, Akkadians, Babylonians, and Assyrians. In the 16th century, the area came under the control of the Ottoman Turks and passed into direct Ottoman administration in the 19th century. At that time, Iraq was composed of three provinces: Basra (the south), Baghdad (the center), and Mosul (the north).

During World War I, the British invaded Iraq as part of their war against the Ottoman Empire. The British had intended to grant Iraqis limited control of their own affairs, but by 1920 they faced opposition on two fronts from two different religious groupings, resulting in their premature, forced withdrawal by 1921. Subsequent to Iraq’s admission to the League of Nations in 1932 and the commencement of the exportation of oil in 1934, a series of minority uprisings and coups plagued the country, and Iraq’s political history has been filled with turmoil ever since.

In my view, the root of Iraq’s troubles then and now are the result of the British decision to draw the boundaries of modern-day Iraq along geographical, rather than ethnic or religious lines. Had the British instead decided to divide Iraq up into three states along ethnic and religious lines, Iraq would undoubtedly have avoided its turbulent post-World War I history, and Saddam Hussein would never have come to power. The Iraq of the Ottoman Empire was divided into three parts that largely represented these groupings—Mosul being largely Kurd, Baghdad being largely Sunni, and Basra being largely Shiite.

Just as it made no sense to divide Iraq along geographical lines, it made no sense to divide the former Yugoslavia up along geographical lines. We have seen the result of that mistake, and I predict we will see a similar result in the coming months and years in Iraq. Iraq has become the Balkans of the Middle East. Just as Kosovo is again erupting, we have unleashed a cauldron that will boil and fester and erupt for decades to come. Who sent the British packing? The Sunnis and Shiites—the same groups that are today opposing U.S. administration of Iraq. The British faced a two-pronged assault on their rule and the United States will likely experience exactly the same thing. Centuries of history have proven that social engineering does not work. Change must come from within. Human beings are hard wired to be tribal. Our instincts are to identify with others like us and to be suspicious of other groups. It takes great liberalizing institutions, decades, and much motivation to live with and be tolerant of those who do not share a culture, religion, ethnicity, or general worldview. Iraq—devoid of any such institutions and absent anything approaching a homogeneous environment—was never a candidate for imposed tolerance, civility, or democracy. It was incredibly naïve of the architects of the Iraq War to ignore the lessons of history and believe that the U.S. experience in Iraq would be any different than that of the British. To achieve a solution approaching harmony in Iraq, the United States would have been wise to do what the British did not—permit the break-up of Iraq along ethnic and religious lines instead of attempting to forcibly retain the artificial borders created by the British.

Anyone who wonders whether a relatively small group of insurgents can prevail over a majority need look no further than the Bolsheviks in Russia or the communists in China. The opponents of the U.S. administration in Iraq are not simply Al Qaeda-affiliated terrorists and this is not merely one of the fronts of the war on terrorism (mind you, by invading Iraq, the United States has made the country a magnet for Al Qaeda devotees and created a link with Al Qaeda that did not exist before the invasion). The troublemakers in Iraq have deeply rooted historical grievances and what we are witnessing is a continuation of centuries-old religious and ethnic conflicts. The United States has unleashed these forces by invading Iraq and will now have an extremely difficult time managing the consequences.

The Consequences of Ignoring History

What might these consequences be? I fear the result will be civil war culminating in a Shiite-led theocratic state—one of the worst possible outcomes for America. The Shiites are the majority of the Iraqi population and have been brutally repressed for decades. They believe that they should have been ruling Iraq all along, and that the U.S.-led invasion of Iraq is an opportunity to settle the score. This will, in turn, rouse the anger of the Sunnis. The Shiites will, with the help of Iran, likely assume control of Iraq.

The Kurds, who had been relatively appeased, will become emboldened by the experience because they will not be any more successful in establishing a Kurdish state than they have been in the past. Establishment of a Kurdish state could solve a variety of problems for surrounding countries, which have substantial Kurdish populations. The Turks, Iranians, and Syrians all have their own “Kurdish problems,” but the resolution of these problems ultimately requires that they cede a portion of their national boundaries to the Kurds—a prospect that is unlikely to occur quickly or voluntarily. Whatever the outcome in Iraq, the inability to solve the Kurdish question will exacerbate the ethnic conflicts in Iraq and inflame existing Kurd-related conflicts in the surrounding states ad infinitum.

Let's call a spade a spade and admit that at best, the Iraqis will have limited sovereignty over their country for a long time to come. In the end, it does not matter whether or not the U.S. government pushes back the June 30, 2004, date for handing administration of Iraq over to an interim Iraqi-led ruling body. The result will be the same. Iraq is spinning out of coalition control and will continue to do so. Civil war and Shiite rule appear inevitable. It is entirely possible that Iraq may yet split into two or more states that better represent the ethnic and religious composition of the country.

Lessons Learned

Governments and businesses ignore the lessons of history at their own peril. History is a useful guide in considering what is likely to happen in the future in one’s home country or a country half way across the globe. To the extent businesses can liaise with governments in considering a course of action in a country, they would be well advised to do so. Businesses that do so can at least hopefully gain some insight into what lies in store vis-à-vis government policy in the near- or medium-term. For governments, it is an opportunity to integrate concerns of the business community into the crafting of foreign policy. Had the U.S. government done so in the case of Iraq, the outcome might not have been as potentially catastrophic.

1Material sourced from The Columbia Encyclopedia, 1993.

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