A year since Iraq announced "victory" over the Islamic State group, the country finds itself in the throes of political and economic crises left unresolved during the long battle against jihadists.

Unified against the common menace of IS, Iraq's political elites are now at loggerheads over the drawn-out formation of a cabinet as the threat of renewed popular protests looms.

Iraq is no stranger to instability. It fought an eight-year war with Iran in the 1980s, then a conflict over Kuwait followed by a crippling international embargo and the US-led invasion that toppled Saddam Hussein in 2003.

A sectarian war ensued, capped in 2014 by IS's devastating sweep across a third of the country.

Backed by a US-led international coalition, Iraqi troops and paramilitary forces battled the jihadists for three years, until Baghdad finally declared it had won in December 2017.

After decades of nearly back-to-back wars, Iraq's decision-makers are now forced to face deep-rooted dilemmas left festering for years.

"In Iraq you've seen many 'missions accomplished'," said Renad Mansour, senior fellow at Chatham House in London.

"But as usual, the much more challenging victory is the political victory -- which has always been left for another day."

Five months after Baghdad declared its win, the country held legislative elections that did not produce a clear governing coalition.

Then-prime minister Haider al-Abadi failed to hold on to his position despite claiming credit for victory, as people turned to populist parties who tapped anger over corruption.

The ongoing power struggle among various parties has stymied efforts by new premier Adel Abdel Mahdi, widely seen as a weak consensus candidate, to form a government.

- 'Little to celebrate' -

In October, Abdel Mahdi managed to fill 14 of the cabinet's 22 posts, but repeated efforts to hold a parliamentary vote on the remaining eight, including the key interior and defence ministries, have failed.

"The distribution of power, the race to acquire as many government positions as possible under the guise of real competition between parties -- that is at the root of the problem," Iraqi political analyst Jassem Hanoun told AFP.

"Iraq is still living in a transition period, without political stability or a clear administrative vision for the country."

As the process drags on, observers have wondered whether Abdel Mahdi could step down, further destabilising a country just getting back on its feet.

"Withdrawal is an option," a source close to the government said, adding that Abdel Mahdi "has his resignation letter in his back pocket".

"Only if the political situation gets significantly worse can I see him taking it out of his pocket and using it," the source said.

But the thorny issues facing Iraq extend beyond the capital.

Much of the country remains in ruins after three years of ferocious fighting, including large swathes of one-time IS capital Mosul and the northern Sinjar region.

An international summit in Kuwait in February gathered around $30 billion in pledges for Iraq's reconstruction -- less than a third of what Baghdad hoped to receive.

More than 1.8 million Iraqis are still displaced, many languishing in camps, and 8 million require humanitarian aid, according to the Norwegian Refugee Council.

"If this is what 'victory' looks like, then there is little to celebrate for millions of Iraqis still haunted by the crimes of the IS and the long war to eliminate it," said NRC's head Jan Egeland.

- 'Disaster' -

Violence has dropped across Iraq, according to the United Nations, which recorded the lowest casualty figures in six years in November with 41 civilians killed.

But the threat of hit-and-run attacks lingers.

A recent study by the Center for Strategic and International Studies found that while the total number of IS attacks in Iraq had dropped in 2018, those against government targets had increased compared to 2017.

Observers are also worried that the bitter squabbles among Iraqi's political forces could turn violent.

"Because of the divisions among the parties, anything is possible," Hanoun said.

One scenario would be a conflict among the country's competing Shiite Muslim factions, which he said would be a "disaster".

But another major fault line divides Iraq's entrenched politicians and an increasingly frustrated public.

Deadly protests in the summer of 2017 saw tens of thousands turn out over unemployment, a lack of public services, and accusations of corruption.

Rampant power cuts mean millions of Iraqis have just a few hours of state-provided electricity per day. The country is ranked the 12th most corrupt in the world, according to the Transparency International Corruption Perceptions Index.

Protest leaders have threatened a return to the streets if these issues, as well as the political stalemate, are not resolved.

"There's certainly a conflict within the Shiite camp, but the biggest conflict will be between the people and the whole system," said Mansour.

"Summertime will be a test for Abdel Mahdi."

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UN team to begin probe of IS crimes in Iraq in early 2019
United Nations, United States (AFP) Dec 4, 2018
A UN team authorized over a year ago to investigate the massacre of the Yazidi minority and other atrocities by jihadists in Iraq will finally begin work early next year, the head of the investigation said Tuesday. The UN Security Council adopted a resolution in September 2017 to bring those responsible for Islamic State group war crimes to justice - a cause championed by Nobel Peace Prize winner Nadia Murad and international human rights lawyer Amal Clooney. The team, led by British lawyer Kar ... read more