Chronicle of the Middle East and North Africa

Staying Neutral? Iraq’s Best Choice between the US and Iran

Iran- Iranian rial
A man exchanges Iranian Rials against US Dollars at an exchange shop in the Iranian capital Tehran on August 8, 2018. US President Trump warned the world the previous day against doing business with Iran as Washington reimposed “the most biting sanctions ever” on the Islamic republic, triggering a mix of anger, fear, and defiance in Tehran. Photo AFP

On August 7, 2018 President Trump announced on Twitter that “The Iran sanctions have officially been cast… and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States.” This was expected ever since Trump withdrew the US out of the Joint Comprehensive Plan of Action (JCPOA) on May 8, 2018. Iran’s bet, however, has been on the international community to stand against US sanctions and to support Iran. Iran’s Minister of Foreign Affairs, Mohammad Javad Zarif, responded to Trump that “the world is sick & tired of US unilateralism… the world won’t follow impulsive tweeted diktats. Just ask EU, Russia, China & dozens of our other trading partners.”

After US withdrawal from the JCPOA, Iran was encouraged by other parties to the deal to stay committed to receive the signing day’s expected economic dividends. It did so. What Iran expected in return was that the international community would give its economy a lifeline in the dire situation caused by US renewed sanctions. And despite that, many Iranian officials, including the Supreme Leader Ayatollah Ali Khamenei, casted their doubt on the EU and other parties to the JCPOA to face Washington and keep the deal alive. Tehran, however, announced time and again that it would stick to the JCPOA so long as the deal would serve its national interests.

For now, the P4+1 (P5+1-United States) stood resisting US pressure and kept insisting on saving the JCPOA. The odds, however, came from Iran’s neighbor and friend, Iraq. The Iraqi Prime Minister Haidar al-Abadi said on August 7 that “Iraq does not agree with U.S. sanctions against Iran but will abide by them to protect its own interests.” In other words, despite considering the sanctions a ‘strategic mistake’ on the US’ part, he announced that his government would stay in line with the US new Iran policy. Six days later, on August 13, Abadi withdrew his first statement under a pile of criticism by declaring that “his government would only respect the dollar ban in transactions with Iran.” That is to say that Iraq would not use dollars in its transactions with Iran because of the possible ramifications on its economy. But why was Abadi’s rush to announce it in the first place? And why did he withdrew it in the second? There are three possibilities, and all are linked to the Iraqi elections and the future of the premiership:

The personal aspect. When Iraq held its contested parliamentary elections on May 12, 2018, Abadi was hoping for a majority in the parliament guaranteeing his second term as a prime minister. But his coalition came third after Muqtada Sadr’s Saairun and Hadi Ameri’s Fatah coalitions respectively. Iran supported the Fatah as well as Maliki’s Dawlat Al-qanun coalitions. On a personal level, apart from Muqtada, Abadi lost to Iran loyalists. He knows that it was Iran’s dropping of its support of Maliki – who won the elections of 2014 – that made room for his own premiership in the first place. He now knows that Iran is supporting his rivals and that this support has deprived him of an electoral victories. He is, therefore, trying to raise the cost for Iran and make Tehran think twice about transitioning from him to another candidate. In other words, even if he doesn’t manage to keep his position, his loss will not be a cheap one for Iran.

The nationalist aspect. While knowing that he is not Iran’s choice for the premiership, Abadi is banking on the growing nationalist sentiments in Iraq. The recent riots in Basra, which ended up with protesters setting fire to the Iranian consulate, were part of those sentiments—though their root-causes seem to be deeper. Those political tendencies of Iraqi society are, for the first time since 2003, unfolding in an anti-Iran fashion. While Iranians are accusing Saudi Arabia and others of instigating differences between the ‘two brotherly nations,’ Iraqi politicians have been seeing value in distancing themselves from Iran.

Iran Iraq Trade 3000
Sources: The Observatory of Economic Complexity, UN Comtrade Database, Trade Promotion Organization of Iran, al-Jazeera. Click to enlarge. @Fanack ©Fanack CC BY 4.0

Muqtada Sadr was an example followed by Ammar al-Hakim, who left the Iran-inclined Supreme Council to establish a new body – the Hikma Party. Witnessing their successful electoral campaigns, Abadi is now turning to the away-from-Iran nationalist posture to gear up support among Iraqis for another term in office.

The American aspect. While losing the possibility of an Iranian support for a second term, Abadi needs an external supporter to compete with the Iran-supported candidates and coalitions. To guarantee the US support, he did not miss a day to announce his support of US anti-Iran policy during his second term.

But the question then would be why did Abadi withdrew this position. It might be because of a growing criticism and pressure on Abadi within Iraq, even from figures such as Sadr and Hakim, whom are seen as the figure-heads of Iraq’s new nationalism. It might as well have resulted from a reassessment of Iraq’s need to continue its economic and commercial cooperation with Tehran. As Iraq imports most of its food, electricity, fuel, construction material, cars etc. from Iran, Baghdad will be in a dire situation if it is to abide fully by the new set of sanctions.

Though Abadi is right in one aspect that without abiding by US sanctions Iraq’s interests might be in jeopardy, there was still no need to rush to announce such a policy. In fact, his government started implementing parts of the sanctions, including banning Dollar transactions between Iraqi and Iranian banks and financial institutions and stopping the import of Iranian cars, without announcing it. And both were huge steps for the country, because on the one hand, Iraq under Maliki was one of Iran’s main sources of import of hard currencies, especially during Obama’s ‘crippling sanctions,’ and on the other, it has been one of the main importers of Iran’s car industry. Abadi’s government did both without announcing it and provoking Iran. In addition, Abadi is now an interim prime minister and no one – including Iran and the US – would expect him to clarify his position on such a matter. That is why Abadi’s announcement can only be interpreted with regards to the run-up to the premiership and in light of Abadi’s hope to receive US support.

Abadi is not a trustworthy figure for Iran anymore. Iran’s main goal in Iraq since 2003 has been for Baghdad to stay friendly to Iran and to keep a distance from US hostilities toward Tehran. By siding with Washington and trying to play the nationalist card against Tehran, Abadi lost his chances with the Iranian powers. Therefore, while it seemed that Abadi’s office has scheduled him a visit to Tehran, Iran’s spokesman for the Foreign Ministry announced that he was unaware of such a visit—meaning that no one in Tehran is willing to even discuss the premiership with the man after his comments on US sanctions. As such, Abadi’s office said that his own schedule did not allow for such a visit. Iran’s reactions were quite telling on the direction its policy might take.

Iranian reactions varied from the need to force Iraq to compensate Iran for the eight-year war (1980-1988), to reminding Iraq of Iran’s help in dealing with its most challenging issues in recent years—Islamic State (IS) and Kurdish secessionism—, to Iraq’s need of Iran’s reconstruction capabilities. But the main reaction is expected to be on the future of the premiership. The indications from Tehran suggest that Iran will do its best to prevent Abadi to remain in his position. Recent developments in Basra, as well as Abadi’s inability to manage the situation, seem to have been moving the Iraqi scene to Iran’s favor. According to many analysts, Abadi has lost his chances in those developments. Besides punishing him, this is important because it sets a standard for those who would think of using Iran in their internal rivalries.

Alongside rivalries over the premiership, there lies a bigger truth: Iraq cannot choose between Iran and the US. If it does so, it will be losing more than it will gain. Taking internal reactions to Abadi’s comments into consideration, choosing one side would deepen Iraq’s political gaps, which can in turn lead to social turmoil. In addition, such a policy cannot help in the reconstruction process in Iraq, for Iran has the power to derail and destroy such an effort for Baghdad. It will also bring back heated regional rivalries to the country. Therefore, siding with Iran or the US will have ramifications on Iraq’s internal politics, regional position and international status. In all the three levels, there is no much for Iraq to win, but there is certainly a lot to lose.

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