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1 1 (June 4, 2021)

handle is hein.crs/govednv0001 and id is 1 raw text is: Iraq and U.S. Policy Iraq Pre pares for October 202 Election as Security, F iscal Challenges Persist Iraq is preparing for a national electionplanned for October 10, 2021, roughly sixmonths earlier than required, butlater than originally proposed. Since ending the Islamic State (IS, aka ISIS/ISIL) group's control ofterritory in Iraq in 2017, Iraqis have sought more accountable governance, improved service delivery, and greater economic opportunity. Security institutions have used force to contain and dispeise mass demonstrations, and a shadowy campaignof violence by militia actors has sought to silence activists. Prime Minister Mustafa alKadhimihas led Iraq's government since May 2020, after months of political deadlock following theprotestor-demandedres ignation in late 2019 of his predecessor. Extensive negotiations leading to Kadhimi's nomination occurred during a period of serious escalation in U.S.-Iran tensions that played out through attacks in Iraq. Ongoing attacks by Iran-backed groups targeting U.S. and Coalition forces-and their Iraqi hosts-have tested Kadhimi's tenure. Continued dependence on oil revenues and expansive state liabilities left Iraq vulnerable to financial collapse in 2020, as the systemic effects of the Coronavirus Disease-2019 (COVID-19) pandemic exacerbated underlying economic and fiscal challenges. Strains between the national government and the federally recognized Kurdistan RegionalGovernment (KRG) have not been resolved, and remnants of the Islamic State group exploit resulting weaknesses in Iraqi security arrangements. Protests subsided in early 2020 amid COVID-19 mitigation measures, but again spread and intensified in May 2021, with demonstrators insisting that the government identify and prosecute suspects in a series of assassinations and kidnappings since 2020 of protest leaders, activists, and a prominent security researcher. These incidents have intensified public scrutiny of Prime MinisterAlKadhin's credibility and his government's ability to act against armed groups operating outside state control. New Election Law, Established Political Elites In late 2019, Iraq's parliament (Council of Representatives, COR) adopted a new election law to replace the country's list-based electoral s ystemwith an individual candidate - and district-based system. In October 2020, the COR finalized the law, creating 83 multi-seat electoral dis tricts in which candidates will compete as individuals rather than running as members of party lists across governorate (province)-wide districts. Some voting systems experts and observers ofIraqipolitics warn that the electoral system changes alone will not ensure more accountable leadership or result in better governance. Establishedpoliticians have organized into coalitions that largely mirror those that competed in the 2018 national election. Individuals 6 Updated June 4, 2021 associated with the protestmovement may competein the election, though some have called for an electoralboycott. Figure I. Iraa Sources: CRS, using ESRI and U.S. State Department data. Economic and Fiscal Difficulties Mount During 2020, COVID-19 mitigation measures deepened an economic contraction that had already begun in urban areas paralyzed by protests in late 2019. In parallel, a precipitous drop in globaloil prices slashed state revenues through the middle of 2020, but price increases have since created sont fiscalbreathing room. Iraq estimates that its gross domestic product declined 11% in 2020, and the budget deficit grew to 20%. Iraq remains dependent on oil exports for more than 90% of its budgetrevenue, most of which pays salaries and benefits to state employees andretirees. The International Monetary Fund has recommended reversing the unsustainable expansion of wage and pension bills, reducing inefficient energy subsidies, and raising non-oil revenues, along with supporting vulnerable citizens with targeted cash transfers. Iraqi leaders publicly describe the condition of state finances as dire, but they havenot changedpatterns of state spending fundamentally. After the CORdeclined to approve a 2020 budget, it granted the government approval to borrow to pay state salaries in November 2020. In December2020, the CentralBank of Iraq devalued the dinarby more than 20% relative to the U.S. dollar, allowing the government to more easily meet domestic payment commitments, but raising consumer fears of inflation. Since 2020, protests have followed some cabinet-approvedpublic spending cuts, and some politicians have derided austerity measures in populist critiques of the government. The COR-approved 2021 budget did not include some cabinet- ttps://crsreports.cong re

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