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In Iraq, roughly two million people have been displaced by the war. And aid groups say nearly a quarter of those are now living as squatters.

NPR's Kelly McEvers reports from Baghdad.

KELLY McEVERS: Um Sara and her family have moved five times in four years. Each time, her situation gets worse and worse.

Ms. UM SARA: (Foreign language spoken)

McEVERS: (Unintelligible) Shiite family originally lived in a Sunni neighborhood here in Baghdad. But then slogans like: This school is for Sunnis, began to appear on walls, and the bodies started piling up. The family fled and moved in with relatives, then rented apartments in Shiite neighborhoods. Then the father and oldest daughter got sick, and they couldn't pay the rent.

Now, Um Sara, her ailing husband and four children live here on the first floor of an abandoned office building. There's raw sewage out here in the courtyard. You have to walk through it to get into the house. This garbage and old appliances sort of provide a wall and you come in the house and it's totally dark. There's no electricity inside.

(Soundbite of clapping hands)

Ms. SARA: (Foreign language spoken)

McEVERS: Look, Um Sara says, slapping her hands together in disgust, we have nothing. Um Sara is one of some 500,000 squatters across Iraq, more than have of these are here in Baghdad, says Shoko Shimozawa with the U.N. High Commissioner for Refugees.

She says the number of Iraq squatters is increasing because people like Um Sara are finding it harder to make ends meet and also because aid groups and officials are only now looking for and finding them.

Ms. SHOKO SHIMOZAWA (U.N. High Commissioner for Refugees): It's a phenomenon that was not known to many people, even the government. When we tried to explain the issue, some of the government officials know for the first time of the magnitude of the problem.

McEVERS: Iraq's minister of displacement, Abdul Samad Rahman Sultan, says even though he feels sympathy for squatters, they can't go on living illegally.

Mr. ABDUL SAMAD RAHMAN SULTAN (Minister of Displacement, Iraq): (Foreign language spoken)

McEVERS: These people can't occupy property that doesn't belong to them, he says. If we let them stay, it only means more people will try to do the same.

The only way squatters can register for government assistance is if they want to return to their original homes. But most people are still afraid to do that. Those who do begin the process face corrupt local officials who ask for bribes or sell relief packets for profit.

This, says Kelly Clements of the State Department's Office of Refugees and Migration, is why the U.S. government doesn't give aid money directly to the Iraqi government. Still, she says, the State Department is ramping up its support as the U.S. military's presence here winds down.

Ms. KELLY CLEMENTS (Office of Refugees and Migration, U.S. State Department): Last year we provided close to $400 million. We're going to provide similar levels this year. What we're concerned about is the vulnerability, female-headed households, those that don't have other means.

McEVERS: So the aid money helps provide squatters with stoves, fans and mattresses. Long term, the hope is to work with the Iraqi government to help squatters build new homes.

Elizabeth Campbell of Washington-based Refugees International recently visited squatter camps around Iraq. She says resettling the displaced is the only way the country will be able to recover from the U.S. invasion and the resulting civil war.

Ms. ELIZABETH CAMPBELL (Senior Advocate, Refugees International): In many ways, displacement is the lens through which you can measure progress and success. And as long as communities are disenfranchised, impoverished, ignored, forgotten, problems will continue to fester and it can certainly lead to a wide variety of social and political problems down the road.

Unidentified Woman: (Foreign language spoken)

McEVERS: In Diyala province, east of Baghdad, the Minhel family has been squatting in a mud-brick room on government land since the war began in 2003. They fled their home during ethnic tension between Arabs and Kurds.

(Soundbite of purse zipper)

The mother rifles through her purse and finds a letter from an American lieutenant colonel. Whenever local officials try to evict the family, she shows them these words: In accordance with the directives from Ltc. Grant, displaced civilians are not to be relocated or moved without prior coordination from this office. This is dated the 5th of August, 2003.

The mother says she knows the letter might not work much longer. If the soldiers can't help us anymore, she says, who can?

Kelly McEvers, NPR News, Baghdad.

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