Nine months after the withdrawal of US troops, Iraq is still unstable. Terrorism remains the country’s biggest problem, but the catastrophic conflict in Syria – of all things – provides some hope.

In August, Iraq exported more than 2.5 million barrels of oil per day – breaking a 30-year-old record. It was welcome news for the war-torn country, where such reports of success are rare. But even these figures offered only limited respite. Though the oil industry accounts for over 90 percent of Iraq’s income, it provides few opportunities for Iraqis themselves, since it employs barely one percent of the Iraqi workforce.

Agriculture comprises a disproportionate sector of the Iraqi economy – supplying a fifth of all Iraqis with a living, but only four percent of the gross domestic product, leaving those who depend on it in relative poverty.

And the Iraqi private sector has developed much less than had been hoped. The country is struggling with widespread poverty, an employment rate of 18 percent, rising illiteracy, and above all rampant corruption. And state institutions are far from adequately established.

Iraq broke its oil production record in August

Religious and political terror

The police are still a long way from being able to provide security. There were attacks on all a variety of Iraq’s religious groups across the entire country throughout the month of Ramadan, making clear just how powerful several terrorist organizations still are.

Apart from the internationally active al Qaeda, non-fundamentalist groups are also keeping the country in fear, while radical Sunnis, Shiites, and Kurds are all using violence in an attempt to expand their political influence.

Terrorism is feeding on Iraq’s violent past and the legacy of Saddam Hussein’s vicious 30-year dictatorship, says Usama Hasan of the Quilliam Foundation, a London-based anti-Islamist think tank. “As in many Arab countries, social order was based on the massive use of violence by a repressive and tyrannical system,” he told Deutsche Welle. “It was a police state that depended on incarceration, murder and torture. All that served to terrorize the population.”

A fifth of Iraqis live on farming

Although the US invasion destroyed the regime, Hasan argues that Saddam’s system is still very much present – mainly because it has not been adequately replaced by constitutional structures. It will take years, he believes, for democracy and civil structures to develop.

Arab Spring provides hope

But whether terrorism continues to thrive remains unclear. Somewhat paradoxically, the increasingly violent Syrian conflict could limit the violence in Iraq in the long term. The theory goes that if Iran acknowledges that its attempts to keep Syrian President Bashar Assad in power have alienated all its neighboring countries, it will allow its influence in Iraq to slip.

Hasan believes that Tehran has much to gain from a stable Iraq – but its main aim is to contain US influence in the region. “And that can be done without violence,” he says.

Iran’s major Sunni rival Saudi Arabia is also distancing itself from terrorism, but there is an important distinction to be made, says Islam scholar Thomas Pierret. “The Saudi state does not support Islamist terrorism,” he told DW. “But private sponsors there and elsewhere in the Gulf region do.” These sponsors, says Pierret, have sent financial aid to terrorist groups everywhere, including Chechnya and Afghanistan, in the hope of seeding a particularly fundamentalist form of Islam. And they only give money to certain carefully selected groups. “They have very precise criteria,” he says. “They require those they support to be good Muslims, and, if possible, Salafists.”

Bin Laden’s death has been a blow to al Qaeda’s influence

Limited funds

But even this money is not infinite. Many Iraqis have no time for Salafism, says Hasan, which is why al Qaeda has shrunk in the past few years. “The group has not managed to secure the support of the Iraqis,” he said. “Many Iraqi fighters – nationalists who initially fought against US forces – joined forces with the Americans to fight al Qaeda. They have rejected the group’s strict interpretation of Islamic laws.”

For that reason, the terrorist network has grown weaker in the country – a development that can also be seen on a global level. “Al Qaeda has suffered a huge blow in the past year through the murders of important leaders like Zarqawi and of course bin Laden,” said Hasan.

Still, due to the Syrian regime’s incremental collapse and the porous border to Iraq, terrorists now have easier access to Iraq. That in turn means that state and security institutions have an even greater responsibility to protect their citizens.

Iraqis still have to live with terrorism on a daily basis. Too many social and economic problems remain unsolved – both security forces and the country’s political leaders face major challenges.