The Formation of a Government
Amid all the chaos in Iraq—the insurgency, the sectarian violence, the looting, the inﬂ ux of foreign insurgents, the wrecked economy, and the assassinations—the task of forming a government went on. The Iraqi Interim Government under the pro-Western prime minister Allawi lasted from June 28, 2004, until May 3, 2005.
During his brief watch, Allawi oversaw the January 30, 2005, elections to the National Assembly, which took place despite the fact that a majority of the Sunni Arab parties boycotted the election and threats of terror, especially from al-Zarqawi. In all, 275 representatives were elected, the vast majority from two parties supported by Shiis. It was the National Assembly that on April 28, 2005, voted in the new Transitional Government (as per the Law of Administration for the State of Iraq for the Transitional Period, Iraq’s working constitution at the time) by choosing the men who would ﬁ ll the key positions.
The Transitional Government
After some wrangling, the National Assembly struck a balance with Iraq’s three main groupings (Sunni, Shia, and Kurds) as well as the realities of the political apportionment of the assembly itself. The result was the election of Jalal Talibani as president and Adil Abdul Mahdi and Ghazi al-Yawar as vice presidents, all three of whom were elected by a two-thirds majority.
They comprised the Presidential Council. The Presidential Council then named Ibrahim al-Jafaari as prime minister, who in turn was elected by the National Assembly with a twothirds majority. As president, Jalal Talibani served as head of state and military commander (in addition to heading the Presidential Council), while the prime minister was head of government. INC leader Ahmad Chalabi was named one of three deputy prime ministers. Former prime minister Allawi now led the opposition.
From the outset, the Transitional Government was in crisis mode. In light of the assassination attempt on Allawi the previous month and the increased violence from insurgents and terrorists, the new government took a hard line against the ﬁ ghters. Thousands were arrested in Baghdad alone. One result of the new government dealing with intense violence was that “the demarcation between militias and the formal police and special security units became increasingly blurred” (Allawi 2007, 421).
This led to the increased politicization of the security forces. The war had also created disarray in the petroleum and electricity industries, which the insurgency targeted daily, especially after the January 2005 election of the National Assembly. The chaos within the energy sector continued throughout the entire term of the Transitional Government, which could only practice triage (repairs of damages) as the violence escalated. The effect was that Iraqis, especially in the capital city of Baghdad, faced ever decreasing energy output.
Less visible but important for Iraq’s long-term stability were the problems of Iraq’s budget and debt. At the time of the fall of the Baathist regime, Iraq’s debt totaled more than $130 billion, a good deal of it dating back to the Iran-Iraq War of the 1980s. The debt was classiﬁ ed into four categories, with the largest amount owed, more than $50 billion, to Saudi Arabia ($39 billion), Kuwait ($8 billion), the United Arab Emirates, and Qatar.
During the term of Prime Minister Allawi’s Interim Government, another of the four categories of Iraq’s creditors, the Paris Club (consisting of various Western nations and Japan), agreed to cancel 80 percent of Iraq’s $40 billion debt, though the majority of the debt forgiveness ($20 billion) was tied to Iraq’s negotiations with the International Monetary Fund. As for the budget, Allawi acknowledged that “the central problems . . . were the twin issues of revenue generation and . . . large, untargeted entitlement and subsidy programs” (Allawi 2007, 429).
Both of these problems were the direct result of a wrecked economy that neither increased oil production nor a “quick ﬁ x” cash inﬂ ux would repair. As a result, public subsidies, especially to the oil industry, were reduced, petroleum prices were increased (with a $500 million “safety net” for the poor), $1 billion block grants to the provinces were set aside, as were $500 million to capitalize regional development banks, and $300 million to support the families of Baathist victims (Allawi 2007, 431). Predictably, rioting followed the December 18, 2005, implementation of price increases on petroleum products, but the increases remained in effect.
The Transitional Government captured the world’s attention with the ratiﬁ cation of the Iraq constitution on October 15, 2005, by national referendum and the subsequent elections of December 2005. In the former, it was declared that 63 percent of Iraqis voted in the referendum and that 78 percent of these favored the new constitution.
However, the vote was actually closer than that because the referendum was not a straight up and down majority vote. It was decided beforehand that even if a majority of Iraqis favored the draft constitution, if three of Iraq’s 18 provinces voted against the constitution by a two-thirds majority or greater, then not only would the constitution have to be redrafted, but the National Assembly would be dissolved (since the National Assembly had passed the draft constitution for referendum vote) and new elections set.
Despite sectarian differences, with most Arab Sunnis opposing the draft constitution, only two of the provinces, Salahad-Din and al-Anbar, both heavily Sunni, voted against the draft constitution by the stipulated two-thirds. With the passing of the draft constitution, Iraq became a federal nation, a move pushed by the Kurds. The Presidential Council announced soon after the referendum that new legislative elections (under the auspices of the new constitution) would be held on December 15, 2005.