BAGHDAD, Iraq — As we mark the fifth anniversary of the fall of Saddam Hussein's regime, it is important to reflect on the journey we have embarked upon.

Liberation offered us the opportunity to construct a new state, based on the rule of law and democratic principles. Unlike in the past, this Iraq would acknowledge and build upon its diverse ethnic and religious identities. That promise has not yet been fulfilled. Mistakes have been made, and few Iraqis doubt that political and economic reconstruction could have been handled better.

Yet, against all odds, Iraq has closed its fifth year of freedom with tangible improvements — thanks to interlocking steps on security, the economy and national reconciliation.

The transition to freedom has been exceptionally painful for Iraqis and Americans alike. The euphoria of liberation was soon tempered by the chaos of looting and then the tornado of terrorism and sectarianism. While Iraqis have been frustrated, the threats pale in comparison with the horrors that they, and the region, endured under Saddam Hussein's tyranny.

When we assumed sovereignty in June 2004, the Iraqi security forces were almost nonexistent. Today our security forces are nearly 600,000 strong, and Iraqis are primarily responsible for half of Iraq's 18 provinces. Through improved Iraqi security capabilities, through the coalition's "surge" of troops and, above all, with support from local communities, the violence that obstructed economic, social and political progress has receded significantly. Anbar, a province once all but lost to terrorists, is now largely denied to them. Similarly, Baghdad is no longer a maelstrom of sectarian bloodshed.

Al-Qaida, the great spoiler in Iraq and the region, is on the run. Al-Qaida remains a major threat but is now fighting to survive, not to win. The setback that Iraqis, with coalition assistance, have inflicted could well become the genesis of al-Qaida's defeat across the Muslim world.

Putting the terrorists and militias on the defensive has enabled some economic progress, and the government's competence is growing. We have managed to reduce annual core inflation from 36 percent at the end of 2006 to 14 percent this month. Iraq now funds almost all of its reconstruction and the lion's share of the costs for its security forces. Budget execution is improving: In 2006 the government spent just 24 percent of its investment budget; in 2007, that spending rose to 63 percent and is on track to be even higher this year. Per capita incomes, which were the equivalent of $465 in 2003, passed $2,100 in 2007. This week, our Cabinet endorsed plans for a $5 billion supplementary budget to finance an expedited program of major public works. If approved by Parliament, this will be added to the $14 billion already allocated for investment this year. Further, our economic growth rate is expected to top 7 percent this year.

Sadly, our politics has not kept pace. Baghdad has done much but not enough. We have passed crucial laws for national reconciliation. Parliament has voted on laws regarding pensions, de-Baathification, amnesty, a budget and provincial powers for elections later this year.

Iraq's political challenges have been exacerbated because of disputes among and within the partners in its governing coalition. The government's recent confrontation with armed gangs and militias, particularly in Basra, may have changed that dynamic. The government showed leadership and a willingness to combat outlaws regardless of their sectarian affiliation. Few appreciated that politicians of all sects and ethnic groups rallied to the government. If we manage it well, we can build on that momentum of national unity to resolve political problems that have stalled effective governance in recent months.

Just as Baghdad needs to make more of an effort, so do others in the region and the international community. The intricacies of Iraq, a society traumatized by decades of tyranny and ravaged by wars and sanctions, have been greatly complicated by regional and international crosscurrents. Now is the time for Iraq's neighbors to support Iraq's government and the political accommodations reached in Baghdad. Their interference in Iraqi domestic affairs must end. For all the anti-U.S. rhetoric in the Middle East, our neighbors should recognize that it would be disastrous for Iraq, the region and the world if coalition forces left before Iraqis could adequately attend to their own security.

Even as we seek to broaden our base of international support, our relationship with the United States will remain core to our strategy. Our gains would have been impossible without U.S. support. More than 4,000 Americans have given their lives to secure the freedom of 26 million Iraqis. It is a debt that we acknowledge with humility and gratitude. For the sake of those brave Americans, and their tens of thousands of Iraqi comrades who lost their lives seeking a better Iraq, we must do better.

A year ago many were willing to concede defeat in Anbar. Today, Anbar has been won back and al-Qaida is on the run. Iraqi unity in confronting outlaws in Basra offers hope that we can transcend the sectarian divide. These are important benchmarks, and they should be recognized as credible affirmation that success is possible in Iraq.

Barham Salih is deputy prime minister of Iraq.