In the last two months, a new foe has reared its head. The collapse in the price of oil on the world markets, thanks to a decision by Saudi Arabia to start a price war with its geopolitical foes Iran and Russia, has slashed the Iraqi government’s budget.
Around 90 per cent of its income comes from oil, and a price cut from $140 at its peak, and from $80 a year ago to $40 today has had a major effect.
“Of course, it has affected all aspects of the Iraqi government, and the first impact is on the Ministry of Defence,” the defence minister, Khaled al-Obeidy, told The Sunday Telegraph in an interview.
Mr Obeid was speaking after a tour of the front lines north-east of the town of Haditha, in Anbar province. On arrival by an air force C-130 plane at Camp Speicher in Salaheddin province, the start point for the surge west across the Anbar desert, he was met by local government officials complaining that delivery of funds from Baghdad was late - as well as by the weaponless policemen.
“We will speak to the ministry of interior and help them get weapons,” Mr Obeid promised The Telegraph. “The governor indicated that funds had been stalled. But we are pretty sure we will be able to send them the money.”
The trip to the front was not the best advertisement for the army’s state of preparedness - or its funding. Two Humvees - armoured Hummer jeeps - in the minister’s convoy ran out of petrol in the desert.
The chief of staff, Lt Gen Othman al-Ghanimi, praised recent advances by the army. Ten days ago, the Iraqi government forces swept 50 miles west across a desert area known as Jazeera Samarra - Samarra Island - as they sought to relieve the 18-month siege of the Anbar city of Haditha.
They also cut the supply lines between the jihadists’ two major Iraq centres, Fallujah and Mosul.
“This was an operation of the Iraqi army and Iraqi air force,” he said.
Yet the strong presence of Iraq’s Iranian-backed Shia militias, whose members lined the roads and whose graffiti covered the local buildings, showed that the army is still reliant on irregular forces, ones with which the US-led coalition will not co-operate.
“We are the shock force,” said Hussein Mohammed Hassan, a militiaman from the Iran-linked Badr Corps standing near Lt Gen Ghanimi. “We do 70 per cent of the fighting.”
The future of Iraq may be a race between the improving army and the declining politics, in part a result of the dependence on oil.
The weaker the army as Isil is pushed back, and the stronger the Shia militias, the less likely it is that any power will be able to stick Iraq’s competing sects and regions back together again.
The government has already been forced to cut public sector pay, which has caused outrage among a population which has become used to the state providing employment as a matter of right.
In a furniture shop in Baghdad’s Kerrada neighbourhood which reported a 50 per cent drop in takings this year so far, an off-duty army officer shopping with his wife said everyone blamed the government for their pay cuts, not global economics.
“Of course it’s their fault, everyone agrees on this,” he said, refusing to give his name. “As for the oil price fall, they should have thought about this before and built some reserves.”
The economic crisis, also blamed on government corruption, has revived the fortunes of Iraq’s most famous political Shia cleric, Moqtada al-Sadr, whose Mahdi Army was once the scourge of British and American forces and who now leads his supporters on anti-government supporters.
In this, he wins grudging backing from a wide and surprising variety of allies, from diplomats to economists, who also say the government needs reform. They may have a very different view of what that means, however,
Majid al-Suri, an independent economist, said that the Iraqi state increasingly was not working. He said that reliance on government to provide jobs had led to an unsustainable rise in its budget - the number of public sector employees has grown from 650,000 to 4.5 million since the overthrow of Saddam Hussein in 2003.
He gave as a reason the decision after the US-led invasion of 2003 to build a democracy based on sectarian attachment, where balance was provided by sharing of power in government between the sects.
That formula, based on the peace deals in Lebanon and Northern Ireland, in Iraq has created both an inbuilt Shia majority emphasising the sectarian divide, and a culture of political patronage.
Political leaders provide jobs in return for a blind eye being turned to massive corruption. “These leaders are not millionaires, but billionaires,” Mr al-Suri said, referencing widespread reports of the personal wealth of former prime minister Nuri al-Maliki and a host of others.
The off-duty officer and the shop manager Baraa Abdullah’s view of reform is very different. “If you have a degree you have a right to be given a public sector job,” Mr Abdullah said. “This is how the Iraqi state works.”
The west has been hoping that Gulf countries might support Iraq in the war against Isil as compensation for the cut in oil prices. But no support has been forthcoming. “They are receiving absolutely zero assistance from the region,” one western official said. “They are fighting an existential war on behalf of the region and getting absolutely nothing for it.”
He said there was more reason to be optimistic now, although the politics remained difficult, than at any time since the Isil surge, partly because of the army’s gains.
“The Iraqi army has become a respected institution around which people can coalesce,” the official said. “It’s a long way off before the Iraqi army is the sort of unit that it was 35 years ago but it’s emerging as something that people can look up to.”
In the desert, Lt Gen Ghanimi said he could break the siege of Haditha in two days, if he were not determined to press ahead slowly, clearing Isil’s booby-trap bombs as he went.
The Shia militias were more scathing. Ahmed al-Asadi, their main spokesman and an MP, said the record of the army and its allies in the Sunni tribes, even with American air support, suggested that it found retaking ground difficult.
“They retook Ramadi, but at a cost of 80 per cent of the city destroyed,” he said. “As for the rest, there aren’t enough forces able to liberate it. If there were, we wouldn’t have the problem we have.”
