December 24, 2018: Even though Islamic terrorism related deaths fell by 5,000 in 2017 (compared to 2016) and continued to decline in 2018, Iraq remains the nation with the largest Islamic terrorism problem (followed by Afghanistan, Nigeria, Syria and Pakistan). Most of the deaths in Syria come from continued fighting between government forces and rebels. The largest source of Islamic terror deaths in Syria remains ISIL (Islamic State in Iraq and the Levant) although in the last year ISIL has been taking more casualties than it is inflicting.

While the problems with Islamic terrorism in Iraq are declining the problems with neighbor Iran are increasing and causing more political disruption. The anti-Iran election results earlier in the year created some initial confusion among Iranian leaders but that is gone now and Iran is pushing Iraq hard to ignore the American sanctions and help Iran evade them. Iraq is cooperating as much as it can, but not out of sympathy for or fear of Iran but because there is money to be made helping Iran out. Even so, Iraq does not blatantly flaunt the American sanctions because in many respects Iraq needs the Americans more than they need Iran. Moreover, the United States can be more trouble, using legal means, than Iran. The Americans can respond by going after the Iraqi corruption in addition to invoking banking and other financial restrictions. At the moment most Iraqis see the Americans as the good guys and the Iranians as the bully next door, and often just down the street because pro-Iran PMF (Peoples Mobilization Forces) commanders are being more aggressive with the army and any Iraqis who openly oppose Iran. The growing number of murdered Iraqi politicians is attributed to Iranian death squads, Iran denies this but it is something the Iranians do everywhere.

All this Iranian interference increases the risk of civil war in a country that has a minority of the Shia majority willing to use violence to support Iran. Pro-Iran PMF militias take orders from Iran and that is increasingly unpopular with most Iraqis. Iraqi leaders have been subjected to a lot of pressure from Iran to ignore the American sanctions. Iran pointed out that complying with the sanctions would hurt the Iraqi economy. That pressure caused Iraqi leaders to comply with the more immediate threat (Iran) even though they realized that most Iraqis preferred the Americans to the Iranians. After all, when Iraq asked the Americans to leave in 2011 they did. Iraq is seeking an exemption to some of the Iran sanctions because otherwise the Iraqi economy would suffer and the U.S. has been granting these requests. Iraqi economists and financial experts have made it clear that the Americans have a lot of options and many of them involve going after individual pro-Iran Iraqi leaders, especially those who are the most corrupt. Sanctions on individuals have proved very effective and Iraq has a lot of eligible targets. The Kurds had another advantage in that they were on good terms with the Americans who in turn had the ability to chase down leads via the international banking system. That turned up more leads and hiding places for ISIL money. Lastly, while the Americans are withdrawing their 2,000 troops from Syria they are apparently planning on stationing many of them in Iraq, along the Syrian border to protect Iraq from continued ISIL attack

Criminal Cash Combat

With ISIL having lost all its territorial control, and most of the billions in cash, gold and valuables they had stolen since 2013, they still have nearly half a billion in cash and portable valuables left and everyone wonder where it is. For more than a year ISIL has been trying to launder (turn the loot into legitimate assets) as much of this money as possible. That had made the ISIL stash easier to spot and track. At the same time, some of this wealth is buried in remote areas of western Iraq or eastern Syria. One of these stashes has been found so far (that is known of) but more valuable are the documents being found that contain data on how ISIL is laundering their cash. The Kurds in northern Iraq has been very active in doing this because ISIL (and Arabs from the south in general) have parked a lot of money in the Kurdish north because it is safer. While the Kurds were fighting ISIL there was little interest (or resources) in auditing local firms. In 2018 that changed because there was a lot less fighting and a lot more auditing.

The ISIL cash reserve does not mean ISIL forces stop raising cash whenever they can. Local ISIL groups still use extortion, or voluntary contributions from supporters, to pay for operations. The men who collect the donations also collect information and impart ISIL warnings or instructions (like we need more money or a contact with someone). Because these fundraisers are regularly out in the open they are often captured and provide a good source of information. When possible the fundraisers are watched and followed for a while to identify more suspects. This provides evidence that ISIL still has a lot of supporters in Iraq, where the Sunni minority is still angry at losing economic and political power in 2003, power they had held for centuries (under Turkish rule and since the 1920s in an independent Iraq.) These Sunnis used to support al Qaeda and other less fanatic Islamic terror groups but now they favor ISIL because this group actually achieved some success from 2014 to 2016 and might do so again.

Economic Growth

Foreign economists, especially those from the credit rating agencies, believe Iraqi GDP will grow four percent in 2019 if oil prices remain high (averaging $75 a barrel) and Iraqi production continues as it has for the last two years. The Arab dominated OPEC oil cartel has had some success in cutting production to keep the oil price high but non-OPEC (especially the North American frackers) have been increasing production a lot. GDP growth for 2018 was 2.8 percent and more growth was expected as more of the country recovered from the three years of ISIL violence. But basically, the Iraqi economy is still based on oil and the ability to pump and ship it to foreign customers. Iraq has ten percent of the world's oil reserves and 2017 exploration efforts have that increased by 10 billion barrels. That makes 153 billion barrels, which more than a third larger than it was after the resumption of oil exploration a decade ago. Iran has reserves of 158 billion barrels, Saudi Arabia 266 billion and Venezuela 300 billion. These four nations have the largest reserves which are about 60 percent of the world total.

What is keeping the world oil price low is fracking and related novel extraction methods. That new American technology is making much more oil and gas available and it is expected that the U.S. and Canada will soon have “proven reserves” equaling a third of the current world total. The fall in oil prices since 2013 (from over $100 a barrel to as low as $30) cut Iraqi foreign currency reserves to about $48 billion by the end of 2017, compared to $53 billion in mid-2016. That forced the government to adapt and the reserves were $60 billion by the end of 2018. By early 2018 the price of oil had climbed to $60 a barrel and later to over $80 mainly because OPEC members were not cheating on their quotas and several members were producing less than their quota because of internal security problems. Despite all that oil prices have been declining since October and are now under $60 a barrel. The ISIL crisis forced Iraq to be more prudent with its finances, and government operations in general. The Americans are no longer being blamed for all that goes wrong. Taking responsibility does indeed make it easier to deal with problems. But many Iraqi leaders and politicians still prefer to blame all the problems on America, Israel and so on.

December 23, 2018: In the west (Anbar province), Iraqi EOD (Explosives Ordnance Disposal) teams and some foreign mine clearing personnel have, over the last three years, found and disposed of nearly 50,000 pieces of ISIL ammunition, including those used for mines and roadside bombs. It was in 2015 that ISIL was first driven from parts of Anbar and became clear that ISIL would always leave lots of explosive surprises behind. The U.S. has been training Iraqis for this EOD work since 2004 and after that Iraq had its own school that has been turning out a growing number of very effective EOD technicians. These men are essential if there is to be a rapid and sustained advance into ISIL held territory or urban areas ISIL has held for a while.

Iraq declared ISIL defeated a year ago and yet the Islamic terror group continues to maintain a very visible presence in northern Iraq. In early 2018 nearly half of ISIL activity was in Iraq (and a few provinces at that) while nearly a third were in Syria (mainly in the east). At the end of 2018 ISIL is being crushed in Syria but seems to survive in Iraq. In part, this is because ISIL has succeeded in going guerrilla in Iraq by early 2018. Nearly all the ISIL attacks reported in Iraq can be classified as terrorism. This reflects a known trend that began in early 2018 as ISIL concentrated in maintaining a presence in the area north of Baghdad (Kirkuk, Diyala, and Salahuddin provinces). For 2018 ISIL carried out about 130 attacks a month and these attacks rarely involved bombings populated areas (to kill civilians). There were also more ISIL operations involving threats of violence to intimidate civilians or local security forces. There was less use of violence because ISIL has fewer bomb builders and suicide bombers (as well as the people who recruit, train and supervise suicide bombers carrying out their attack). Bombs are now used primarily against security forces. The guerilla tactics can be seen by the growing number of attacks, especial along the main roads north from Baghdad to Kirkuk and the border with the Kurdish controlled north. Attacks involving kidnapping and murder (mainly to terrorize the population into not interfering with or reporting on ISIL activity) are more frequent. In March there were seven of these attacks. That increased to 30 during May and 83 in June and, according to ISIL, about 200 in October. Most of these attacks did not involve violence but all involved threats. ISIL was counting kidnapping and extortion activities (which sometimes involved non-lethal violence). These “operations” are important because they raise money and keep locals in line. This increase in activity shows how effectively ISIL has established base areas to operate from. Most of the bases are in the Hemrin Mountains, which extend from Diyala province through northern Salahuddin province and into southern Kirkuk province. In early 2018, it was believed that there were 500-1,000 armed ISIL members operating in the Hemrins and about the same in desert areas near the Syrian border from west of Mosul south to include Anbar province. ISIL is also trying to reestablish itself in Mosul and that can be seen by the continued arrests of known ISIL members in Mosul and surrounding areas. The main point of this is that ISIL is defeated but not destroyed. The main reason for that is the nature of ISIL which, alone of all major religions, demands extreme measures for those who try to leave Islam (death), Moslems or non-Moslems who criticize Islam (death) and trying to convert a Moslem to another faith (death). The list is very long and Islamic scripture also preaches justice and honesty but it also justifies being violent when “defending Islam” against real or imagined threats. All this is a problem that many prominent Moslems are now openly recognizing and seeking a solution for. That in itself is a brave and unusual act. Yet it is deemed necessary because many of the worst aspects of Islam not only encourage terrorism but also limit academic, economic and social progress. Meanwhile, Islamic terrorism continues to mainly kill other Moslems. While Islamic terror groups preach the importance of killing non-Moslems it is also noticed that nations that are mainly non-Moslem tend to be better run, wealthier and more capable of halting of limiting Islamic terror activity. But in many Moslem nations, like Iraq, a large minority of the population continues to support Islamic terrorism as a cure for all problems real or imagined. So the Islamic terrorists tend to go where they are least unwelcome.

December 21, 2018: The U.S. granted Iraq a 90-day extension on the original 45-day exemption on some Iranian sanctions. Iraq made a case that they needed an exemption to some of the Iran sanctions because otherwise, the Iraqi economy would suffer. This was especially true with Iraqi dependence on Iran for electricity and natural gas imports.

In the south (Basra), for the second week in a row police used bullets as well as tear gas to try and disperse continued weekly demonstrations against the local government (which continues to be too corrupt and ineffective for most people living in the area). The demonstrations have been going on since July.

December 19, 2018: The American president, in keeping with a campaign promise, announced the withdrawal of American forces (about 2,000 troops) from Syria and about half the 14,000 U.S. troops in Afghanistan. No timetable was given but preparations are being made to establish new American bases in the south (Anbar province) and north (Kurdish controlled border area). This campaign promise arose from the fact most Americans have noticed that since the 1990s there have been a growing number of overseas military operations undertaken by different American governments and that these operations, initially described as short-term, never seem to end. For example, there are still U.S. troops stationed in Kosovo, an assignment which was to have ended within a year but somehow never did. Putting American troops into Syria was supposed to be temporary until ISIL was destroyed. That task has largely been accomplished and the remaining anti-ISIL forces in Syria can mop up.

In the northwest (Duhok province) Turkish air and artillery strikes at suspected PKK positions has caused hundreds of civilians to flee their homes.

December 18, 2018: Parliament agreed to approve three more government ministers but five are still pending. This is seven months after the elections and the main reason is the size and complexity of the party coalition used to form the current government. There are more political groups that can threaten to leave the coalition if their veto of a ministerial candidate is not acted on. The differences are particularly acute between Shia nationalists (led by the Sadr coalition) and the pro-Iran parties (particularly Badr).

In the north (along the border between Diyala and Salahuddin province) local security forces began a major operation to drive ISIL forces from seven villages in this border area.

December 16, 2018: Turkey carried out airstrikes against PKK targets in northern Iraq over the past few days. Targets were in the northeast as well as the northwest (Sinjar).

December 13, 2018: In the north, the autonomous Kurdish government gave in to Turkish (and Iraqi government) pressure and shut down all political parties allied with the Turkish separatist PKK or not on the Iraqi government list of approved parties. The PKK finds itself in big trouble because of the renewed Iran sanctions. The Iraqi Kurds, in order to maintain good relations with the United States has to observe these sanctions. That means Turkey is the only way they can export their oil and maintain access to the outside world. The Turks are taking advantage of this.

December 12, 2018: Iraq and Jordan agreed to establish several new border crossings in 2019 in order to revive trade and travel between the two countries. That had been disrupted since 2014 because of ISIL activity.

December 11, 2018: In the west across the border in Syria (Deir Ezzor province), Iraqi F-16s attacked two ISIL targets killing an estimated 44 Islamic terrorists and destroying equipment and weapons stockpiles. These two ISIL bases are near the Iraqi border where a number of ISIL members are still maintaining a presence. ISIL targets in this area were hit by Iraqi F-16s on November 20 killing at least 40 Islamic terrorists. Syrian Kurd SDF militias are on the ground shutting down these ISIL base areas.

December 9, 2018: In the west (Anbar province), local officials confirmed that the Americans appear to be establishing a third base along the Syrian border, 30 kilometers north of the Euphrates River near the Nineveh province border. Other two American bases in Anbar are at the Tanf crossing (near the Jordan border) and further north at the Qaim border crossings into Syria on the Euphrates River.

December 8, 2018: The Iraqi Air Force received another six FA-50 jets from South Korea. Iraq had ordered 24 of the new South Korean FA-50 light fighters in 2013 for use as trainers and attack aircraft. Iraq is receiving a variant of basic T-50 jet trainer. The T-50 was designed to be capable of air combat and is actually quite formidable. South Korea also sold the Philippines and Indonesia T-50s. The Iraqi FA-50s were supposed to be delivered in 2015-16 but the ISIL uprising interrupted this plan. T-50 pilot and ground crew training was to have started in 2014 but was delayed by the war with ISIL. This delayed delivery of the FA-50s for two years. With this delivery, all of the 24 FA-50s have arrived. The Iraq sale was worth $1.1 billion dollars and was the largest single South Korean arms sale to date.

November 29, 2018: In the United States (Washington DC) the Americans put a vast trove of Iranian weapons or fragments (of ballistic missiles, naval mines, remotely controlled bomb boats or UAVs) collected from countries throughout the Middle East (Iraq, Syria, Yemen, Saudi Arabia, Afghanistan and so on) as evidence of illegal Iranian arms exports. Most of the items displayed have Farsi (the Iranian language) markings. Opening the display in Washington makes it accessible to many foreign embassy personnel and journalists. Two more interesting items (Iranian made rocket launchers) were recently found in Yemen. And Iranian weapons are so common in Iraq that it is no big deal unless it is components for landmines and roadside bombs. These are provided by Iran to be used against Iraqi security forces and American troops.

November 28, 2018: For the first time an Iranian B-747 freighter aircraft delivered missile components directly to Lebanon. These components add GPS guidance to long-range unguided rockets. The transport flew over Iraq and Syria.

November 26, 2018: In the east (Deir Ezzor province), SDF (Syrian Kurd rebels) forces repelled a complex and desperate attack by as many as 500 ISIL fighters seeking to protect their last stronghold near Hajin city and the Iraqi border. The attack began on the 23^rd and involved numerous attack groups and dozens of suicide bombers advancing out of a widespread fog. The SDF lost 92 dead over three days, the most ever in a single battle. Since SDF began moving against this ISIL stronghold in early September the primarily Kurdish group has lost over 450 dead. The three day ISIL offensive was stopped by stubborn SDF defensive tactics, which had American artillery and airstrikes on call. ISIL lost over a hundred known dead but many of the ISIL bodies are in what is still ISIL territory where airstrikes hit any group seen moving during the battle. Because of that a lot of the ISIL attackers never reached SDF positions. Many of the attackers, especially suicide bombers, got close to SDF forces by claiming to be civilians fleeing ISIL. There are a lot of civilians in this ISIL controlled area. Many of them are wives and children of ISIL fighters but many are not and are discouraged from leaving the area. ISIL wives are often willing to participate in suicide attacks and take the kids with them. Now SDF forces will advance into this last ISIL stronghold and have to deal with landmines, explosive traps and suicide bombers that appear to be civilians. This is why ISIL is often described as a suicidal death cult. The hundreds of ISIL fighters surrounded near Hajin are all diehard and desperate Islamic terrorists who realize this is their last stand and the possibility of getting out is very low. After this most recent battle and the heavy losses SDF suffered there is even more resolve by the SDF to ensure that none of the ISIL personnel escape. Taking prisoners is unlikely because the trapped ISIL men know about the growing number of captured ISIL men and women being sentenced to long prison terms or execution.

November 25, 2018: American commanders have told Iraqi officials that American forces would not automatically intervene if Iran controlled militias, especially PMF (Peoples Mobilization Forces) groups went to war with the Iraqi government.

November 24, 2018: At the request of Iran, Iraqi banks banned the sale of dollars to anyone traveling to Iran. This is part of an Iranian program to ban the use of dollars by Iranians.