What Now for Iraq's New Rulers?

At 10:26 am on June 28, Paul Bremer – Iraq's Coalition administrator for over a year – handed a sheaf of documents to Chief Justice Midhat Mahmoud, thus formally transferring sovereignty to an Iraqi government.

The move came two days earlier than expected, presumably to throw off the timing of anti-Coalition groups reported to be planning a string of car bombs and other mayhem to disrupt the transfer.

As word spread, Iraqis expressed approval but little outright jubilation: no celebratory gunfire, no festivities in the street.

This may partly stem from the low-key nature of the ceremony. But Iraqis are also ambivalent about the transfer itself. Many have long called for them to be allowed to run their own affairs, and are frustrated both with the Coalition's failure to solve the country's problems and with what they saw as an arrogant refusal to admit errors.

The Coalition-appointed Iraqi Governing Council also failed to win much support. Though many members retain personal popularity, the institution discredited itself through what was perceived as a public lack of resolve and private nepotism.

However, much of the thunder of the transfer was stolen the month before by the appointment of a president and prime minister – good news for the many Iraqis who are tired of anarchy. Although he himself enjoys little grassroots support, Prime Minister Iyad Allawi has managed to win something of a honeymoon through his vow to take the "necessary measures" to improve security.

More popular, perhaps, is the president, Sunni tribal leader Sheikh Ghazi al-Yawar. Not only did he win credibility by openly criticising the Coalition, but his demeanour and his headdress and stately robes are cited by many as a sign that he is a man who will know how to handle traditional society, and how to wield his authority in a way that people respect.

Yet there are many other Iraqis who have no confidence in their new leaders.

A spokesman for the Muslim Scholars' Board, an influential Sunni group, declared that sovereignty without a troop withdrawal was a "formality" that "deceived the Iraqi people and the world". Others flatly labelled the new government as American puppets.

Although these politicians were not necessarily Washington's first choices, they were ultimately approved by the Coalition. Moreover, the sovereignty granted them is not complete. Foreign troops will remain in the country under a United States-dominated command, and – thanks to a late decree from Bremer – will enjoy immunity from Iraqi courts along with many foreign civilians.

Meanwhile, some Iraqis on the other side of the political spectrum believe that the Americans, whatever their faults, are better equipped to restore security than a scrambled-together national government, and worry about a descent into chaos.

The Allawi government is now in a race against time. In order to deal with the security situation, Iraq's new rulers must be able to extend their authority into recalcitrant regions, and command Iraqi troops and police who have so far been reluctant to fight the insurgents.

If they cannot improve the security situation, they will find it extremely difficult to hold elections by the scheduled date of January 2005, since the bombers who have hit police stations and other civilian targets in recent weeks could easily hit voting queues as well. If elections are postponed indefinitely, then – given the importance many Iraqis, including the leading Shia cleric Grand Ayatollah Ali al-Sistani, attach to a vote – the new government will face a serious crisis of legitimacy that will make it even harder to exert authority.

The main perpetrators of the bombings are thought to be radical Islamists – including Jordanian radical Abu Musab al-Zarqawi's al-Tawhid wa al-Jihad organisation and the remnants of the formerly Kurdistan-based Ansar al-Islam – together with some former Baathists.

Most observers believe the attacks are intended to spread panic and disrupt the interim government's ability to project its authority. A letter purportedly written by Zarqawi suggests that the Islamist radicals aim to disrupt the creation of a functioning government, and to pin the Americans down in an endless jihad.

This may conflict with the goals of mainstream Iraqi insurgents in Sunni Arab areas, who say their main aim is to drive the foreigners out. But in the short term the goals of all these groups converge, and to avoid detection and capture the radicals almost certainly depend on tolerance if not outright cooperation from the mainstream insurgents.

Allawi may have promised "necessary measures" such as martial law to restore security, but given that the country's military and paramilitary forces are very much works in progress, he might have difficulty coming down harder on the insurgency than Coalition forces have done.

The Iraqis might be able to make better use of intelligence. Groups such as the Kurdish parties often complain that they put their intelligence networks at the disposal of the Coalition, only to find that the Americans fail to act on their reports while denying them access to resources – prisoner interrogations, for example – needed to capitalise on their successes.

The Iraqis also say that they would avoid the kinds of mistakes, such as overly intrusive raids, that have stirred up so much anger against the Coalition, and that incursions into urban areas – with the inevitable civilian casualties – may seen as less offensive if carried out by local troops.

In the short term, however, the Iraqi government will need to depend on the 160,000 foreign troops in the country. Even if these forces attempt to keep a lower profile, insurgents may try to keep up a steady run of attacks to goad them into the active counterinsurgency measures that inevitably trigger a backlash from civilians.

Moreover, the new government must be able to order Iraqi troops into battle. Former interior minister Nuri Badran was recently heard to quip that he held authority over a radius of four kilometres, because that was the range of his radio. Many police refuse to enforce the law in their communities, either for fear of revenge by suspects' relatives or associates, or because they are being paid off.

The new government has inherited a state left in tatters by 12 years of sanctions and finished off by the war. Since the early Nineties, Iraqis have increasingly turned to their tribes and mosques, rather than to their government, for aid and protection.

The most extreme case of local autonomy is Fallujah, less than an hour's drive from Baghdad. Thanks to the suspected presence of Zarqawi and other extremists, it is also the new government's most pressing problem.

A fighting alliance of Islamists and former Republican Guards defend their "free city", and impose a strict version of religious law on the inhabitants.

The insurgents have even co-opted the very Iraqi security units, largely recruited from the area, formed to pacify them. Republican Guard officers decked out in their old uniforms walk down the streets being saluted by soldiers of the Fallujah Protection Brigade in US-issue fatigues and flak vests, while police have been spotted directing rocket fire at Marine patrols.

The US military was unwilling to pay the political price of subduing Fallujah, partly because Iraqis with tribal ties to the city, or in some cases simply stirred up by images of foreigners wreaking destruction on an Iraqi town, were launching solidarity attacks up and down the highways that formed the Coalition's main supply routes.

The new Iraqi government might be able to subdue Fallujah by force, if Iraqi troops in the streets indeed prove less offensive than foreigners. More likely, it will have to convince Fallujah's rulers – and influential figures in other towns in the Sunni triangle - that harbouring bombers who strike at the rest of the country is not in their interests.

An Iraqi government may also be better placed than the foreigners to strike a deal with the Muslim Scholars' Front - to which many of the insurgents nominally claim allegiance - which may oppose a foreign troop presence but has also condemned many of Zarqawi's tactics.

The north-east Baghdad slum of Sadr City is another zone that lies beyond the power of the central state. Here, the Mahdi Army loyal to radical Shia leader Muqtada al-Sadr, son of a revered cleric after whom the area is named, patrolled the streets until very recently and threatened swift execution to any Coalition "spy".

Sadr, like many postwar leaders, rose to power by providing services to his community during the chaos immediately after the US invasion. Clerics loyal to his father organised vigilantes to stop the looting and scavenged water, petrol and food for local residents. Sadr established himself as a patriotic icon by leading an April 2004 uprising.

The young radical is now thought to be remaking himself as a statesman, declaring a unilateral ceasefire with the Coalition and ordering his followers to cooperate with the police. Some believe that he is now exploring alliances with Kurds, secular Shia, and Sunni leaders in an electoral front.

This pattern - leaders with neighbourhood or provincial political machines tailored to a particular ethnic or confessional group, working in partnership with similar political bosses from other groups and competing with other integrated alliances – is one possible model of how Iraqi national politics could operate in the years ahead.

The north, where the Kurdish Democratic Party, KDP, and the Patriotic Union of Kurdistan, PUK, have run a state within a state since 1991, also lies beyond Baghdad's authority. Its regional autonomy is guaranteed by the interim constitution.

Allawi did manage to broker a deal calling for the demobilisation of militias and other forces including the Kurdish parties' peshmerga. However, the Kurds are reluctant to surrender this final guarantor of autonomy, and it is likely that the soldiers will simply be given some other paramilitary status.

Kurds in the north are also furious that United Nations Resolution 1546 on the status of sovereign Iraq contains no mention of their self-rule zone. Many fear that other Iraqis have little understanding of their bloody history, their aspirations for independence and their distrust of rule from Baghdad.

Ever since the wrangling over the interim constitution, when Shia leaders resisted provisions that would have given the Kurdish provinces a veto when it came to adopting a permanent constitution, those fears have been on the upswing.

The Kurds are also increasingly disillusioned with their own leadership. The self-rule zone has enjoyed security and prosperity (at least relative to the rest of the country) over the last decade, and civil society is in bloom.

However, democratic development has not kept pace, and the region is still very much the domain of the two parties. Now, many Kurds are concerned that this lack of democracy will result in a sell-out of their national interests. In what can partly be read as a gesture of no confidence in the Kurdish leadership, a grassroots movement claims to have collected 1.7 million signatures on a petition calling for a referendum about Kurdish independence.

Kurds are also pushing for the return of tens of thousands of refugees to the disputed city of Kirkuk and other areas from which they were ethnically cleansed under Saddam. Kurds also claim that the oil-rich city should be part of a future federal region of Kurdistan, an idea opposed by many of the city's Arabs and Turkoman. Clashes and assassinations are common, but have not boiled over into large-scale communitarian violence.

Currently, Iraq is badly fractured, with many communities – in some cases neighbourhoods – falling under their own informal self-government.

This might not be an altogether bad thing. Shia, Kurds, and Sunni Arabs often have very different ideas about what the country should look like, and thus no central government will have much legitimacy. In the medium term, it would be better if the regions form ties with the centre as they need them, rather than having the centre force its authority on the provinces.

Such a state, though it may be weak, ridden with corruption, and in places in thrall to tribal or religious mafias, might at least be an improvement on Baathist tyranny.

In the long run, as the state rebuilds itself and a politically sophisticated middle class emerges, tribally or mosque-based patronage systems will become less important – a phenomenon that is already visible in the north.

Ultimately, a federal Iraq may even prove more economically and politically dynamic than over-centralised states like Egypt, where non-responsiveness to local concerns can prove paralysing.

For such an arrangement to hold together, a national government needs to emerge rapidly that is governed by nominally democratic rules, and in which regional bosses can compete peacefully for their share of the federal pie.

Several things could derail this. Allawi or other leaders might succumb to the temptation to exploit the security situation to perpetuate their stay in office, although given the weakness of Iraq's government right now and its desperate need for legitimacy, this scenario is unlikely.

Another pessimistic scenario would be a vicious circle where continued attacks prevent elections taking place - but without elections, the new government's legitimacy dwindles to a point where the regions simply ignore it. That could see Iraq heading towards failed statehood. Many Iraqis fear that neighbouring countries, which want Iraq to remain weak, will do what they can to push this process along.

However, there are a number of factors working in Iraq's favour. The country's political discourse puts a high premium on Muslim and national unity: the Muslim Scholars' Front, the senior Shia ayatollahs, and even the firebrand Muqtada al-Sadr have played a role in ensuring that Sunni-Shia tensions have produced relatively little sectarian violence.

Most public figures also agree in principle that the country needs free and fair elections. Despite the odd bout of nostalgia for Baath-style law and order, authoritarian rule has been largely discredited by the Saddam Hussein era.

If Allawi and his colleagues can prove their assertion that an Iraqi hand at the helm can restore security, then Iraq may move towards a government which, though far from perfect, will be more democratic and representative than any the country has had in the past.

Steve Negus is IWPR's editor/trainer in Baghdad.