Iraq parliament votes to transform ruling system in boost for Abadi

By Saif Hameed and Ahmed Rasheed BAGHDAD (Reuters) - Iraq's parliament voted unanimously on Tuesday for the biggest shakeup in its governing system since the U.S. military occupation, eliminating entire layers of government and giving Prime Minister Haider al-Abadi new powers. Abadi has sought to transform a system which critics said encouraged corruption and incompetence, depriving Iraqis of basic services while undermining government forces in the battle against Islamic State militants. The televised vote took place by a show of hands without discussion or objections, reflecting popular concerns embodied by large street protests calling for an end to a setup that shares out posts on ethnic and sectarian lines. Under the sweeping reforms, the three positions of vice president and three deputy prime ministers will be scrapped, removing offices that had become vehicles for patronage for some of the most powerful people in the country. Nuri al-Maliki, Abadi's predecessor, will lose the job of vice president he had held since stepping down as prime minister in 2014 after eight often divisive years in power. Several ministries will be combined to eliminate cabinet posts: the planning and finance ministries will merge, water will be fused with agriculture, and environment with health. Abadi will have the power to fire provincial governors and regional officials, who often wield more power in their territories than authorities in Baghdad. New rules will cut back politicians' security details and other perks. The judicial system will also see changes to encourage corruption investigations. The risky reforms are the biggest move yet by Abadi to strengthen his own hand, even as large swathes of the country have fallen to ultra-hardline Sunni Muslim militants from the Islamic State group, and the central government faces a financial crisis from the collapsing price of its oil exports. "I promise to continue on the path of reform, even if it costs me my life", Abadi said on Twitter. He called for the judiciary to impose travel bans on individuals accused of embezzlement. Under the system put in place during the 2003-2011 U.S. occupation and designed to encourage an inclusive government, top positions were apportioned among the three main ethnic and sectarian groups: Shi'ites, Sunnis and Kurds. But Iraqi reformers have long argued that this put too much power in the hands of ethno-sectarian party bosses, who occupy Baghdad offices, cruise its streets in armed convoys and staff their fiefs with loyalists. "From a political standpoint, it is the first time (Abadi) has had an opportunity. If he can capitalize on this, it does put him in a position where he can for the first time develop an independent political base and political standing," said Kirk Sowell, publisher of Inside Iraq Politics, a newsletter. RISK AND OPPORTUNITY Iraq's most influential Shi'ite cleric, Grand Ayatollah Ali al-Sistani, backed the reforms, calling on Abadi in a Friday sermon to "strike with an iron fist" against corruption. Sistani, who wields more public authority than any politician, spoke following protests triggered by public anger at power cuts and mismanagement of other services. Demonstrations in Baghdad and southern cities in temperatures surpassing 50 degrees Celsius (122 Fahrenheit) remained largely peaceful and non-sectarian. "Parliament realized the strength of popular and clerical demands for reform and actually made the right decision to back them because if they opposed them, they were arguing for the old regime, for corruption, for patronage," said a diplomat in Baghdad. Sistani's intervention makes it difficult for Abadi's rivals in the Shi'ite majority -- including Maliki -- to oppose the measures openly. Many lawmakers even engaged in one-upmanship suggesting the reforms did not go far enough. But some politicians, particularly those facing dismissal, cautioned of perils ahead. "The prime minister's decisions will increase the concentration of power in the hands of one person and one party," Vice President Ayad al-Allawi said in a statement. Osama al-Nujaifi, another vice president, warned against the "concentration of power and striking against the principle of partnership and balance". Maliki insisted some of the legislation could be revised through constitutional or political mechanisms. Indeed implementing the reforms could prove difficult. Maria Fantappie, Iraq analyst at International Crisis Group, said Abadi's initiative was unlikely to be fully enacted. "Their relevance is the way that Abadi will use them as a stepping stone to make some small changes which will empower his popularity and position vis-a-vis other powerful rivals in the Shi'ite political scene," she said. Abadi has struggled to build broad support for reform since taking office after the army collapsed during Islamic State's takeover of the northern city of Mosul. With security concerns dominant, Shi'ite leaders backed by militias -- many funded and assisted by Iran -- have threatened to overshadow Abadi, who lacks any similar personal support base. The reforms could help Abadi gain the upper hand. "It is a tremendous opportunity to clear the slate and actually get a government of technocrats that will be able to deliver the reforms," the diplomat said. "Hugely encouraging." (Additional reporting by Stephen Kalin in Beirut; Writing by Stephen Kalin; Editing by Peter Graff and Robin Pomeroy)