Iraq between two hard places

Munquith Dagher suggests that Iran is acquiescing in Mustafa al-Kadhimi’s nomination as Iraq’s Prime Minister because of the Islamic Revolutionary Guard Corps’ weakness in the wake the Soleimani assassination and the decline of its soft power inside Iraq. The smart money is betting that the parliament will approve al-Kadhimi, the third Prime Minister-designate in the current round, by the May 9 deadline, though that is far from guaranteed.

The former reformist intelligence chief, if he gains a majority, will face an unusually fraught situation in the midst of Ramadan:

• Covid-19: While the Shia authorities were quick to end religious ceremonies and the Ministry of Health has reacted reasonably well, the pandemic will strain Iraq’s limited health system.
• Oil prices: The collapse of oil prices to around $20/barrel wrecks havoc with Iraq’s budget, which is premised this year on $56/barrel. Oil represents virtually all of the government’s revenue and the country’s exports.
• Iran/US tensions: For the moment, Washington and Tehran have backed off from their tit-for-tat attacks between Iranian proxy militias and US forces inside Iraq. Washington has also approved the waivers Iraq needs to continue importing natural gas from Iran, which otherwise would have contravened US sanctions. But nothing has been resolved between Tehran and Washington. There is no reason to believe re-escalation can’t happen again some time during the year.
• Popular demonstrations: Until Covid-19 struck, Iraq was facing a popular uprising against its sectarian/ethnic political system that caused the resignation of (still acting) Prime Minister Adil Abdel Mahdi. Popular sentiment in favor of changing the system is still running strong.
• New elections: Al-Kadhimi will need to prepare for new elections as soon as Covid-19 conditions permit, under a law passed last December that provides for smaller single-member parliamentary constituencies intended to weaken the stranglehold of Baghdad’s political party bosses. But the new system requires a census that will be difficult to conduct unless Iraq issues new “smart” ID cards.
• Relations with the US: A bilateral “strategic framework” meeting is scheduled at the level of Under Secretary of State for June 2. While its formal agenda will be broader, the key issues have to do with security: whether US troops will stay in Iraq or leave, the continuing fight against ISIS resurgence in isolated rural areas (especially in the no-man’s-land between the Iraqi army and Kurdistan Regional Government peshmerga), and whether and how to repatriate the many Iraqi ISIS fighters still in Syria.

This would be a formidable set of challenges under any circumstances, but it will be especially difficult to meet them in the midst of a pandemic and a big global economic recession.

Therein, however, may lie the silver lining, at least for the longer term. Iraq can no longer afford to depend entirely on oil. It will be compelled to diversify its economy. It has already embarked on a World Bank project to end flaring of natural gas, it needs refineries, and its agricultural sector has great potential. Iraqi politicians have generally viewed the private sector as an enemy. They will need to drop that attitude.

There is also some good news on the security front, despite the real threat to both the US and Iraqi forces from Covid-19. The Iraqis aim for complete removal of US troops in the long term and believe they already no longer need them for the kinetic fight against ISIS. The Americans however also provide training and intelligence support that is still required, if not from the US bilaterally then perhaps indirectly through NATO, if that presence can be preserved.

Baghdad aims for balance between Iran, its powerful neighbor, and the more distant but still vital US. It wants good relations with both the Great Satan and the Axis of Evil. Iraq is between two hard places.

PS: For a far more pessimistic view, and hope the US can be helpful, see Samir Sumaida’ie’s piece.