Iraq’s quest for a stable and inclusive political system remains elusive fourteen years after the fall of Saddam Hussein’s regime. The end of thirty-five years of Baath Party rule has seen the country lurch from one crisis and conflict to another, with no clear path to a peaceful future. The looming military defeat of the extremist group known as the Islamic State in Iraq and Syria (ISIS) will be a welcome development for many Iraqis. But it will also usher in a new set of challenges that complicate the outlook for the country as Iraqis head toward parliamentary elections in 2018.

It should be noted that Iraqis have resisted a complete breakup of their country, and have persevered through the 2003 American-led invasion that brought down Saddam, an all-out civil war from 2006 to 2007, and the takeover of much of western Iraq in 2014 by ISIS. Violence over the past fourteen years has taken the lives of some 268,000 Iraqis, including nearly 200,000 civilians. The resilience of a society that has learned how to survive often goes unnoticed amid such political upheaval, destruction, and death. Post-Saddam Iraq has managed to write a new constitution, and has witnessed four national electoral cycles, four peaceful transfers of power, and three constitutional governments in which Sunnis, Shiites, and Kurds have been consistently represented. Iraq today can claim a flourishing civil society, a thriving media, and expanded civil and political liberties. By the standards of the Middle East, these are no small achievements.

Unfortunately, an entrenched communal struggle continues to divide Iraq and frustrate the evolution of a fully democratic system. The bargaining for power and standing among Iraq’s Sunni, Shiite, and Kurdish communities has been a feature of Iraqi politics since Iraq’s independence from Ottoman rule in 1920. And until the collapse of Saddam’s regime, the Sunni Arab minority, constituting roughly 20 percent of the population, dominated majority Shiites (60 percent) and Kurds (20 percent) in a struggle for control of Iraq. This engendered a sense of privilege among Sunnis and resentment on the part of Shiites and Kurds. Nearly all the leaders who ruled modern Iraq, including Saddam, paid lip service to an inclusive state, yet favored their own tribe and sect to create a curtain of total allegiance and security.

The chaos that gripped Iraq soon after Saddam’s fall reflected poor planning on the part of Washington’s war strategists as well as the fragility of state institutions under Saddam. Faced with near-collapse of the Iraqi state, American and Iraqi post-war planners designed a multi-confessional federal system that has turned out to further entrench the communal divisions.

Iraq’s state institutions and middle class were critical elements for Iraq’s recovery and reconstruction. But both had been weakened by Iraq’s engagement in many long wars, and the international sanctions and isolation that followed Saddam’s occupation of Kuwait and Iraq’s subsequent military defeat in Operation Desert Storm. In 2003, regime change laid bare a festering discord among Iraq’s communal groups that had been long suppressed by Baathist dictatorship.

Under Saddam state largesse had gone disproportionally to family members and a few Sunni loyalists. Opposition by Shiites and Kurds was always met with brutal force including the use of chemical weapons—notoriously in the regime’s attack on the Kurdish town of Halabja in 1988. The Iran-Iraq War from 1980 to 1988 left Iraq’s Shiites uneasy about fighting their neighboring coreligionists. Shiites also decried the killing and disappearance of many of their revered clerics and leaders during the era of Baathist rule.

With Saddam and the Baathists gone, the old order was turned upside down. As Shiites and Kurds ascended, Sunnis, having grown accustomed to power for decades, found themselves on the sidelines. A violent struggle among Sunnis seeking to regain power, Shiites trying to consolidate power, and Kurds working to expand power has been the pattern in Iraqi politics for the past fourteen years. The formidable sway of communal factions undermined Iraq’s nascent democracy, a dynamic explaining the country’s frequent lapses into political and security crises.

In July, a combined force of Iraqi army troops, Kurdish peshmerga, and Iranian-backed Shiite militias battled to eject ISIS militants from Mosul, their last stronghold in Iraq. The victory will be a landmark achievement for Prime Minister Haidar Al-Abadi’s Shiite-dominated government, but it will also bring momentous political and economic challenges.

Post-ISIS, Iraqi leaders will have to re-accommodate minority Sunni Arabs, normalize the political role of majority Shiites, tackle anew the question of Kurdish autonomy and even independence, and address the rampant corruption and mismanagement in the petroleum-dominated economy. They will need to manage a plethora of issues related to the rise and fall of ISIS whose resolution will be critical to long-term stability. Among the issues are the continuing role of American military forces who trained Iraqi troops, the fate of Shiite militias that grew in strength during the fight against ISIS, and the future of the Iranian Quds Force involved in bolstering the Shiite militias.

Iraqis also face steep challenges in rebuilding the territories liberated from ISIS, about a third of the country. Political leaders will grapple to secure billions of dollars from an impecunious Iraqi treasury to reconstruct cities whose institutions and infrastructure have been ravaged by ISIS rule and the liberation battles. An even greater task will be creating a sustainable governing formula for the liberated territories. The future structure, for example, will undoubtedly need to minimize the role of Iraq’s Shiite-dominated central government, whose interference under former Prime Minister Nouri Al-Maliki is seen by many as a factor enabling ISIS to find a haven in Sunni Arab regions of the country.

The Sunni Arabs
Real and perceived, poor accommodation of the Sunni Arab community constitutes the single most critical failure of post-Saddam planners. It turned out to be a strategic blunder that has undermined political stability up to the present moment. It may be argued that no amount of accommodation could have tempered the response of Sunnis to the loss of a century of political dominance. But the punitive posture adopted toward aggrieved Sunnis by Iraq’s new power brokers accelerated the risk of reprisal. It wasn’t long before resentful Sunnis, utilizing the ousted regime’s manpower and knowhow, launched a lethal insurgency that, in one iteration or another, has plagued the country ever since.

Reactionary attitudes, fueled by a new sense of entitlement and fear of the Baathists’ return to power, had blinded Shiite and Kurdish leaders to a more inclusive vision of post-Saddam Iraq. For Sunnis the writing on the wall appeared shortly after Saddam’s fall when the U.S.-led Coalition Provisional Authority disbanded the Iraqi army and barred former Baathists from jobs in the Iraqi government sector. Vast numbers of Iraqi Sunnis were tossed out of work. The drafting of the constitution in 2005 was then accomplished with remarkably little Sunni Arab representation. Discontented with the unfolding political trend, Sunnis boycotted the January 2005 election and came close to voting down the constitutional referendum in October 2005.

The Sunni Arab grudges gradually evolved into an armed movement that drew thousands of foreign jihadists to the cause. The insurgency culminated in the sectarian war from 2006 to 2007 that left thousands of Iraqis dead and derailed an ambitious state-building project. After a short respite, Sunni grievances manifested more ruinously in 2014 with the rise of ISIS, a development that exposed the continuous failure of the Baghdad government to accommodate the restive Sunni Arab minority.

As Iraqis contemplate a more successful post-ISIS approach to the protracted Sunni dilemma, the initial success of the Sahwa (Awakening) councils, set up by the U.S. military in 2006 as a bulwark against foreign jihadists, suggests that the Sunni question is indeed amenable to economic and political solutions if carried out with enough determination and sincerity. The Sahwa councils sought to delink Iraqi Sunni insurgents from foreign jihadists through material incentives coordinated by tribal chiefs such as salaries and promises of rejoining the national security forces in return for deserting Al-Qaeda in Iraq. But during Al-Maliki’s second term in office, as American forces withdrew in accordance with President Barack Obama’s campaign pledge, the Baghdad government emasculated the Sahwa councils. Salaries were stopped and the plan for reincorporating fighters into the army did not materialize. Al-Maliki pursued a campaign of random arrests on suspicion, held prisoners without trial, and his troops were implicated in a shooting incident in Hawija Sunni camp in 2013 killing dozens of protesters. This pushed many alienated Sunnis to welcome ISIS fighters as a counterbalance to Al-Maliki’s rule. ISIS’s epic rout of the Iraqi army in capturing Mosul in 2014 became a moment of reckoning for Iraq.

The stabilization of Iraq will greatly depend on the extent to which Sunnis are accommodated economically as well as politically. The full reincorporation of Sunnis into the national life requires ingenuity, generosity, and vision by all sides. Shiites and Kurds must recognize that it is in their interest to see Sunnis stable and thriving; Sunnis, humbled by the disaster brought on the country by ISIS, should be more eager to secure their place in a new political reality.

Decentralization in Iraq is likely to become a goal for Sunnis. The community is not short of representation in the current national system. They occupy a quarter of the seats in parliament and a third of the places in government ministries. But the political turmoil and security collapse brought on by the Sunnis underlines the ineffectiveness of Sunni representation in central institutions. Post-ISIS recovery in the Sunni region necessitates promoting local leaderships able to coordinate with national and provincial authorities in addressing demands. But longer term, Sunni Arabs may advocate decentralization as an effective means for addressing their need for political accommodation. Iraq, the argument goes, will benefit from letting people of distinct cultures and beliefs define their own security and development priorities while limiting the federal government’s heavy-handedness in servicing their needs.

Any prospect for a Sunni regional autonomy on the model of Kurdistan, though constitutionally acceptable, will be hindered by the paucity of natural resources in the Sunni provinces. The prospect of autonomy therefore may encourage Sunnis to vie for a share of Kirkuk’s oil fields when the fate of the city is finally decided among its Kurdish, Turkmen, and Sunni Arab inhabitants.

If managed well, the Baghdad government’s $100 billion pledge for the reconstruction of Mosul and other Sunni cities should provide ample opportunities for Sunni youth to reenter Iraq’s economy and help restore public services and repair infrastructure. Another crucial aspect of recovery is the need to establish judicial and rehabilitative processes for Sunni youth captured and imprisoned during the insurgency.

The Kurds
The Kurds are the supposed winners of post-Saddam Iraq. The northern region administered by the Kurdistan Regional Government (KRG) is praised as the only normal part of country. It possesses world-class infrastructure and services, thanks to the nearly three decades of relative stability, development, and American economic, political, and diplomatic support.

The end of Baathist rule in Iraq presented the Kurds with a historic opportunity to consolidate the proto-state they had begun quietly building even while Saddam was in power. The focus of the Kurds’ efforts has gradually moved from constitutional and democratic issues to control of land and oil. The KRG enjoys its own government, parliament, army, foreign representation, and flag, but it still depends on the federal government in Baghdad for money. According to the 2005 constitution, KRG is required to sell the region’s oil production through the central government in exchange for 17 percent of the national budget allocated in proportion to population. When the KRG sought independent oil investments in 2012, it entered into a protracted conflict with Baghdad. The Iraqi government withheld budget allocations to punish the Kurds for selling oil on the black market, and the Kurds in turn threatened to sell more oil if payments were not received. There have been numerous unsuccessful attempts to reach a settlement of the dispute.

The other bone of contention is land. Though the constitution restricts Iraqi Kurdistan to the three historic Kurdish cities of Erbil, Dohuk, and Sulaymaniyah, Kurdish leaders lay claim to all cities and districts where Kurds form a majority of the population—including the oil-rich Kirkuk. In the battle against ISIS, Kurdish peshmerga took control of disputed territories including Kirkuk and eastern Nineveh. Kirkuk’s final status was meant to be finalized in a 2007 referendum required by the constitution, but the referendum has been postponed until a census can be completed.

It seems unlikely that Kurdish forces will withdraw from Kirkuk and Mosul, which would complicate relations with the Baghdad government and perhaps more importantly with the Sunni Arabs of those cities. Such a move would come in the context of Kurdish plans to hold a referendum on Kurdish independence, to be held in both KRG jurisdictions as well as in contested areas. Kurdish leaders do not intend to automatically declare independence in the event of “yes” vote, but would use the outcome as leverage in talks with the federal government on oil and land.

Factors weighing against Kurdish independence include increasing doubt about landlocked KRG’s economic self-sufficiency, given recent lower estimates of the region’s oil reserves. The U.S. and Turkish governments oppose Kurdish secession from Iraq; Washington’s declared strategic objective is a united Iraq, and Ankara fears that a move toward Kurdish independence by Iraqi Kurds will embolden Turkey’s own Kurdish separatists. Iraqi Kurdish leaders themselves exhibit differences in their positions on independence, with the Kurdistan Democratic Party taking a harder line than the Patriotic Union of Kurdistan.

The Shiites
The majority Shiite community, which inhabits large quarters of Baghdad and nine provinces in the south of Iraq including the holy cities of Najaf and Kerbala, have not fared as well in post-Saddam Iraq as is commonly believed. Large numbers have fallen in the sectarian fighting, and many Shiite areas remain as impoverished as they were under Saddam’s rule. But their biggest shortfall is lack of meaningful political representation. While Shiites have certainly made political gains, the fruits of victory have gone to a small network of Shiite factions that tightly controls power and resources. The bulk of Iraq’s oil reserves, estimated at 153 billion barrels, is located in Iraq’s southern Shiite provinces. Although Iraqi oil revenues neared $100 billion for a few years prior to the price collapse in 2014, Shiite communities in Iraq have little to show for it.

Shiite parties have made financial fiefdoms out of government ministries allocated to them according to Iraq’s political system of appropriation (muhasasa). These parties whose political survival depends on the money siphoned from the ministries under their control have resisted any attempt at reform despite public outcry and calls from the Grand Ayatollah Ali Al-Sistani, the country’s highest Shiite religious authority.

To accommodate loyalists, party leaders have padded the public payroll at the expense of a disappearing private sector. Many of the government’s eight million employees are ghost workers who do not show up for work or whose salaries go directly to the party. Of course, Sunni Arabs and Kurds are also implicated in government corruption. Iraq consistently ranks among the worst countries in Transparency International’s corruption perception index (166 out of 176 in 2016).

The mismanagement of the economy has disproportionately affected the traditionally poor Shiite majority. Local industry is unable to compete with cheap Chinese and Iranian products, while a weak banking sector and poor infrastructure in addition to security problems have discouraged foreign investment. Iraq’s economy is heavily dependent on the oil sector, making it vulnerable to fluctuations in oil prices and rendering long-term development planning difficult. The current 20 percent budget deficit caused by low oil prices is partially mitigated by loans from the International Monetary Fund, but related austerity measures will squeeze Iraq’s poor further.

The growth of Shiite militias is another serious challenge to Iraq’s future stability. The militias were initially formed to defend Shiite communities and holy sites in Baghdad, Najaf, and Kerbala after the disbanding of the Iraqi army in 2003. The militias have risen in might and stature through the 2006–2007 civil war and especially in the battles against ISIS. The prominence of the militias gives Shiite parties another tool of influence in their struggle for power in post-ISIS Iraq. Some of the leaders of militias have become so popular they may win positions in the 2018 national elections. However, such further securitization of Iraq will face opposition from other Iraqis, risk greater Iranian involvement in Iraqi affairs, anger Arab neighbors anxious to see Iraq return to the Arab fold, and pose a challenge to America’s future involvement in Iraq.

Shiites have grown weary of political nepotism and are increasingly disenchanted with the new ruling class. While there are no signs of new Shiite parties strong enough to compete in the 2018 elections, awareness of the need for change is growing among the youth. The new generation is demonstrating a willingness to relax their religious sentiments in favor of a more secular and less corrupt leadership that will bring effective governance and better management of the country’s resources.

What to Expect
Whether Iraq’s state institutions can rise above confessional politics will largely determine the next phase in the country’s long quest for stability. Collective and sustained efforts will be needed to transform the post-Saddam political order into real progress in governance, communal peace, and economic development—especially for communities devastated by war.  It is unrealistic to expect a swift overhaul, given the repeated efforts for political and economic reform that have been frustrated by the narrow interests of powerful individuals and small groups of the new political class. Perhaps the best hope is that Prime Minister Al-Abadi and his eventual successor will push for incremental measures toward securing Sunni communities and settling disputes with the Kurds. For fundamental change that includes an end to corruption, Iraq may have to wait for the birth of a new political generation.

Muhamed H. Almaliky is the director of the Iraqi American Institute and a research fellow at the Weatherhead Center for International Affairs at Harvard University. He has been a contributor to Foreign Affairs.