June 27, 2012: Oil production exceeded three million barrels a day this month, the highest rate of Iraqi production in twenty years. Within the year Iraqi production is expected to exceed Iran's and be second only to Saudi Arabia. The economy is growing, as is foreign investment, with the growth in oil production. But the government is still very corrupt and inept. That's an ancient local tradition that has not changed. The terrorism is still there, but most of the attacks are directed at Shia civilians and government officials. The aim here is to restart war between Shia and Sunni militias, a war the Sunnis lost five years ago. But diehard Sunni Arab extremists are willing to risk having all Sunni Arabs killed or driven out of the country, on the off chance that the Sunni Arabs could again seize control of the country. The leader in this effort is the local al Qaeda franchise. While somewhat weakened by the movement of many members to neighboring Syria, there are enough still in Iraq to make a major effort this month. The security forces promise a major counter-terrorism effort, which might happen as the government continues to remove commanders who proved incapable of preventing terrorist attacks. The deaths of foreign pilgrims, especially those from Iran, is particularly embarrassing. It's also bad for the economy as pilgrims spend, as well as worship at local shrines.
The Sunni Arabs are a minority (about 15 percent of the population) and do not have the many leadership positions they used to hold in government and the military. The Shia majority (over 60 percent of the population) have no intention of losing control of the government or the security forces. The Sunni are still very numerous in the business community and among university trained professionals. The government does not want to lose these people and their skills. But if the Sunni Arab terrorism cannot be stamped out, there could be another Shia backlash. The last one was halted because the American troops were available to supervise the deal. Not this time, and that has a lot of Iraqis worried. Of more immediate concern is the incompetence of the government and inability to provide many basic services (electricity, clean water, sewage removal, plus law and order). The pro-Iran Shia religious groups offer a religious dictatorship as a solution, but most Iraqis want no part of that either. Getting the current government to work has proved very difficult. Compromise is not a popular tactic in Iraq and greed takes precedence over everything else. A solution is like the weather, everyone talks about it but no one can do anything about it.
One of the major crises facing the government is the growing autonomy of the northern Kurdish provinces. Despite threats from the Iraq government, the Kurds up north are developing new oil fields and building pipelines to export the oil via Turkey. This would make the independent minded Kurds even more difficult to rein in. But all the Iraqi government can do about it now is issue the occasional press release.
Terrorists have been very active this month, killing 175 people so far. This will be the second highest monthly death toll since January (225 dead). Most Iraqis are unaffected by this violence, which is directed at Shia pilgrims and Shia officials and security forces, especially in Baghdad. Corruption and incompetence in the security forces makes it difficult to get a truly effective counter-terrorism effort going. But with every terrorist attack, the clean government crowd gains a few more members. Meanwhile, most Iraqis continue to tolerate the corruption, on the off chance that they might get a taste and to avoid any retribution from some vindictive politician.
The U.S. has 15,000 troops stationed in neighboring Kuwait and has agreed to keep 13,500 there indefinitely, as a guarantee that any Iranian aggression would not succeed. Iran has, for thousands of years, been the local superpower and Arab states in the region fear renewed Iranian attempts to turn them all into provinces of an expanded Iranian empire.
June 26, 2012: The government backed away from its plan to close 44 news outlets (including foreign operations for BBC and Voice of America). The protests, both local and international, caused the government to allow the outlets, which are often critical of the government and expose corrupt behavior, to continue their work. But there are still many government officials who want to shut down all critical media outlets.
June 24, 2012: Turkish warplanes hit PKK targets in the Kurdish north. This is in response to attacks on police and soldiers in southeastern Turkey. The PKK gunmen are based across the border in Iraq.
June 19, 2012: Turkish warplanes hit PKK targets in the Kurdish north.