Iraq running out of money to fight Daesh

Iraq was already poor before ISIS invaded. Now it's beyond that.

The Iraqi government has decided to cut the number of state-financed paramilitary forces due to a shortage of funds as the international oil price declines, a spokesman for a leading predominantly Shiite militia group said Thursday.
Karim al-Nouri, the spokesman for the Popular Mobilization Forces, an umbrella group made up mostly of Shiite militias, told The Associated Press that around 30 per cent of paramilitary troops were expected to be laid off. Some 130,000 fighters in Iraq are affiliated with pro-government paramilitary forces.

The article goes on to say that no troops would be forced to leave the frontlines and this wouldn't effect the war effort, but we already know that isn't true.
The Iraq Army famously collapsed in 2014, and it has never totally recovered.

It isn't just Baghdad. Iraqi Kurdistan has the same problem, maybe worse.

Like his comrades, Soran went unpaid for four months and said he had been put on half wages for January. This is hard to take for the peshmerga, who put their lives on the line to fend off IS. Over 1,300 have been killed, and many more injured since the summer of 2014. Moreover, they are struggling to make ends meet with part-time jobs.
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Their sense of duty has not deterred all peshmerga from turning their back on the war. But, according to KRG's deputy prime minister Qubad Talabani, the lack of pay is thinning the ranks.
"We are getting desertions. People are leaving their posts - it will increase," he told Reuters in January.
Word amongst the peshmerga is that these are not isolated cases, and that the proceeds are used to finance the perilous journey to Europe. Fed up with a stagnating economy that is showing few signs of improving anytime soon, some fighters are joining the stream of refugees flooding out of war-torn Iraq and Syria.

The pershmerga need $300 million a month directly from the United States to continue fighting this war.
Both Baghdad and Iraqi Kurdistan are bankrupt because of the crash in crude oil prices.

The Assad government in Syria has been forced to grant a blanket amnesty to army deserters, as long as they turn themselves into the army.

Last year, Syrian Observatory for Human Rights reported that some 70,000 men had avoided being drafted in to the military since the beginning of the conflict in Syria.

On the good side, ISIS isn't immune to the financial crunch.

Fighters for ISIS—the nominal government controlling sections of Syria and Iraq known also as the Islamic State, or Daesh—had their salaries cut by half late last year, according to internal government documents leaked from the Islamic State. The documents were obtained and translated by Aymenn Jawad Al-Tamimi, a research fellow at the Middle East Forum who studies ISIS.

Last October ISIS announced a month-long amnesty for deserters, certainly a sign of weakness.

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this can't continue

Iraq’s anti-corruption chief sat in his office, waving his hands in exasperation. “There is no solution,” he said. “Everybody is corrupt, from the top of society to the bottom. Everyone. Including me.”..
If, as projected, global oil prices remain at historic lows, Iraq will be unable to pay some of its civil servants, or honour pledges to build roads and power stations in the next financial year. The gravity of the crisis has created uncomfortable reckonings for Iraq’s political class, military leaders and some senior religious figures, who have led a staggering 13-year pillage that has left Iraq consistently rated as one of the top five least transparent and most corrupt countries in the world.
Across all levels of society, a realisation is sinking in that Iraq is now entering a phase that could prove every bit as destabilising – perhaps even more so – than the war against Islamic State. Jamal al-Bateekh, a senior tribal leader with the ear of the political class, said: “For 12 years we have gone through the process of opening the budget in the parliament. But we have never closed it. There has never been a reckoning. All that time, they have been dividing the carcass into pieces.”
“This is existential,” said former deputy president Ayad Allawi, whose office was abolished late last year in a cost-saving drive. “There are organised corruption syndicates running the country, let alone militias. I tell you very frankly, no Iraqi power can take action on this.”..
“The problems here are social as much as everything. You are seen as weak if you don’t steal. Everyone wants to claim power, because they know that nobody else is going to share power with them.”
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