This is the story about the connection between the banking crisis in Lebanon, the construction boom in Baghdad and the highest religious authority of the Iraqi Shiites, Grand Ayatollah Ali al-Sistani.
The ayatollah made the news this week when he received a few landowners from Baghdad who complained that Shiite militias had wrested their land from them. They owned land that had been in the family for generations, in a neighborhood that is currently very popular among investors and builders. They had been forced to hand it over for a ridiculously low price under threat of violence.
That the very elderly Sistani, who is known for hardly receiving any visitors, received the two men and two women himself is already a signal. And in addition, his office released a photo of the meeting.
Without naming the militias, the ayatollah condemned the practices of influential entities operating outside the boundaries of the law that ‘violate both religious and legal rules’. He emphasized that ‘authorities must protect the property and rights of their citizens and take action against those who want to harm them through terror and intimidation, especially against those operating in an official capacity’.
Complained
With this he indirectly supports the work of an investigative committee that Prime Minister Sudani recently formed to investigate the complaints. Many citizens have complained on Iraqi TV and on the internet about becoming victims of this kind of practice.
For there is big money to be made in construction in Baghdad. Apartment complexes are popping up everywhere in the city, and usually without a clear plan. The city of nine million is in need of new homes – but not at the prices they are going for. Per square meter prices have sometimes risen from $1,200 to $5,000.
The construction market is the new destination for money of corrupt politicians and officials in Iraq. Previously, it went out of the country by the planeload, especially to Lebanon. But a lot of money was also laundered in housing construction in the Kurdistan Region. Now it comes to builders and brokers in plastic bags, drums and suitcases.
In Kurdistan, the construction market is largely saturated. Due to the banking crisis in Lebanon, Iraqi corruption money is stuck there as well. The personal sanctions imposed by the Americans against some of the most notorious swindlers and stricter rules for international banking left those with black money no choice: they had to launder it in their own country.
Need
For years hardly anything was built in Baghdad, while there is an enormous need for affordable housing for the middle and lower classes. According to the Iraqi government, there was a need for 2.5 million new homes in 2021. However, construction activity mostly consisted of private individuals demolishing their home to build a new and larger one in its place. A few new neighborhoods also emerged, where Iraqis could buy plots of land to build their homes on.
However, the construction of gated compounds with high-rise apartment buildings is something of recent times. Since corrupt politicians, officials and militia leaders could no longer get their money out of the country. The same goes for unbridled construction: who builds high-rises under the fumes of the Dora power station, where residents will never be able to open a window? Or near the runways of Baghdad International Airport?
The problem in the busy city is that there is not unlimited space for high-rise buildings. Unlike in Erbil, where there was room along the three ring roads in the zoning plan. So those who have black money to launder set their sights on pieces of undeveloped land that have been in the hands of Baghdadis for generations. Which are usually designated for agriculture according to the zoning plan. But corrupt politicians and officials can work around that.
How to get that land if owners don’t want to sell? Most Shiite parties in government and sharing in the corruption have militias. Which in turn have economic interests. And so the urging, coercion and threats begin.
Interests
The stakes are high. A few weeks ago I wrote here about the feud between the cardinal of the Chaldean Church and the leader of a ‘Christian’ militia. That feud was partly about the land (and homes) of Christians who fled Baghdad because of the violence (from Al-Qaeda and the resistance against the American occupation). Those small plots of land are a coveted target too.
More shopping malls have already been built with corruption money than there are citizens going shopping there. The construction market in Baghdad will also become saturated, but for now there are still families who sell their old 300 m2 family home to buy a new 100 m2 apartment. There are still young couples who both work and can get a mortgage.
Of course there are also money launderers who have to spend their money. For example, part of last year’s ‘heist of the century’ went into construction: 55 homes or buildings with a total value of $286 million. No longer traceable, because they are usually registered in the names of relatives or fronts of the money launderer.
But the vast majority in Baghdad who need a home cannot afford the high prices. Young families continue to live with their parents or in-laws. As a real estate agent told the Washington Post: in the popular neighborhoods you can hardly buy anything for a million dollars anymore. ‘For whom is the land? Clearly no longer for ordinary people.’ He wonders if his grandchildren will still be able to afford their own home. ‘Certainly not. No one can afford that anymore.’
Character
The construction boom could also have consequences for the older homes in the city, some which are on the Tigris or in the former Jewish neighborhood. Renovating them is expensive and therefore they are deteriorating. It is easier to sell them and then buy a new apartment with that money.
This changes the character of neighborhoods. As in Zayouna, an area where all homes are built on 600 m2 plots. Now those are being demolished and two or even three homes are being built on that same piece of land. And just as bad is that the green spaces are disappearing; the palm groves and fields that formed the lungs of the city are slowly being built up.
It also means that certain neighborhoods that were once mixed, are now almost entirely Shiite. Mansour, an expensive, popular neighborhood with money launderers, was Sunni and has become partly Shiite. And it means that certain neighborhoods are now controlled by certain militias, which means that, for example, nightlife venues on the Tigris have to pay protection money to a pro-Iranian militia.
Power
I remember my fixer in Baghdad telling me a few years ago that the militias also had a good role to play. If you had problems that could not be solved through the police, you went to the most important militia in your neighborhood. They would take care of it for you. If you were a doctor and were threatened because your patient had died; the militia could protect you.
Many who made use of this did not realize how much power they were also giving those militias. And certainly did not foresee where that would lead. Unless they were perhaps in the system themselves and shared in the corruption pot.
