Sunni Arabs, Interest Group Politics and Cash Flow

By Fester

The New York Times reports that the Iraqi government is looking to spite the main forces responsible for the decrease in violence in Iraq in order to save money:

After months of promises, only 5,000 Awakening members — just over 5 percent — have been given permanent jobs in the Iraqi security forces. Those promises were made last year when Iraq was flush with oil money.

Now with Iraq’s budget battered by falling oil prices, the government is having trouble paying existing employees, much less bringing in Sunni gunmen already regarded with suspicion by the Shiite-led government.

In interviews with leaders from a dozen local Awakening Councils, nearly all complained that full-time jobs were lacking, that pay was in arrears and that members were being arrested despite promises of amnesty.

Abu M suspects that this is mainly a political decision that is at best partially informed by economic circumstances and not an economic decision in and of itself: "Perhaps, as Ollivant noted, the Iraqi leaders "are well and faithfully implementing the policy preferences of their constituents." How else to explain this? (I don't buy that it's about oil prices.)"

I think he is onto something here as an interest group political analysis could be fairly valuable, although I do think economics and cash flow play a large part in this probable decision tree. As I wrote earlier this month, crashing cash flows means people have to make tough choices:

Paying everyone off when oil was north of $100 per barrel was easy. Paying everyone off at a half to a third of the price of the primary revenue generator is a whole lot harder. The Iraqi government had the ability to throw money around for about eighteen months:

One of the great advantages that the Maliki government has enjoyed since 2007 had been ever increasing global oil prices. This gave them a whole lot of money to throw around and buy off competing interest groups as well as build up primary loyalties to the Maliki government. However over the past couple of months, oil prices have collapsed, and with it, the ability of the Iraqi government to throw money at problems.

Not paying the Sons of Iraq/the Awakening Councils/most former Sunni Arab insurgents may be a logical political choice as Maliki figures that he has consolidated strong US support and internal Shi'ite support for his position as he has effectively co-opted the nationalistic/anti-US strain of the Sadrists with a reasonably successful SOFA and SCIRI has discredited itself by being too corrupt and too ineffective during its hold on power. He is probably betting that if he wants to hold onto power, he needs to hold onto the Shi'ite communities by distributing to them a high proportion of valuable public goodies that are still available to be distributed. In a budgetary environment with sharp spending limits, a dollar spent on unpopular Sunni Arabs is a dollar that can not be spent in Baghdad (now mainly a Shi'ite city) or Karbala or Najaf.

The bet that Maliki is making is that the Sunni Arab tribal and insurgent militias are mainly mau-mauing for a bigger slice of the pie which the US can pay for and that he can continue to buy off enough Sunni Arab tribal elites with his diminished cash flow that his improved military can handle any groups that go back to full combat operations, or at least force them to concentrate enough for US air power to hit them.