Instability in Iraq During Leadership Transition

| Intel Brief
The Soufan Center

 

Bottom Line up Front

  • Iraq’s new government will struggle to extricate the country from its role as an arena for conflict between Iran and the United States, or necessarily set Iraq on a course for long-term stability.
  • The new Prime Minister, Mustafa al-Kadhimi, faces an immediate economic crisis brought about by the collapse of oil prices driven by the COVID-19 pandemic.
  • Iranian influence in Iraq remains strong because Kadhimi’s government was approved largely on the strength of votes by Iran-backed factions.
  • The domestic protest movement, quiescent in recent months due to the pandemic, remains unsatisfied and suspicious of Kadhimi’s former role as chief of Iraqi intelligence.

On May 7, 2020, Iraq’s Council of Representatives (CoR) approved a new government headed by Mustafa al-Kadhimi, who has been serving as the head of Iraq’s National Intelligence Service (NIS). Of his 22 cabinet nominees, 15 were approved, enabling him to assume office, although some key ministries, including foreign affairs, were not immediately filled and are subject to further negotiations. An acting oil minister, Ali al-Allawi, was named on May 10. Kadhimi achieved approval largely on the strength of CoR votes from pro-Iranian and other Shia factions. This clearly indicates that Iran had acquiesced to his appointment as prime minister, despite Tehran’s lingering concerns that Kahdimi seeks to limit Iran’s influence in Iraq. Kadhimi is the first post-Saddam Hussein prime minister who is not a member of an avowedly pro-Iranian Shia Islamist party such as the Da’wa Party and the Islamic Supreme Council of Iraq (ISCI).  He was, however, an anti-Saddam activist in London working with other Iraqi Shias to expose the human rights abuses of Saddam’s regime. Because he requires continued backing from Iran and Iran-backed groups, Kadhimi is unlikely to succeed in reining in the Iran-backed Shia militias that continue to attack U.S. troops in Iraq. Some of these groups, although without presenting any specific evidence, blame Kadhimi for cooperating with the U.S. strike that killed IRGC-Qods Force commander Qassem Soleimani and Iran-backed militia leader Abu Mahdi al-Muhandis in January.

Kadhimi is close to the strongly pro-American Iraqi President Barham Salih, who designated him for his new post, and will not bend to the insistence of Iran’s Iraqi allies to expel U.S. forces from the country. The Trump administration has withdrawn some U.S. troops from Iraq since early 2020, but it continues to want to deploy forces to Iraq to fight remnants of the so-called Islamic State and to deny Iran greater influence in Iraq. A U.S.-Iraq ‘strategic dialogue’ planned for June 2020 will provide indications about the degree and scope of ongoing bilateral security cooperation. As long as U.S. troops remain in Iraq, U.S.-Iran competition for influence in Iraq is inevitable, and renewed U.S.-Iran hostilities in Iraq are likely.

Kadhimi takes office in an Iraq that is not only the fulcrum of U.S.-Iran competition, but which also faces several crises that are indirectly related to the regional strategic environment. Of most immediate concern is the economic crisis that has been aggravated, but not necessarily caused by, the COVID-19 pandemic. Foremost among the difficulties is Iraq’s continued dependence on oil revenues – which still account for nearly 90% of government revenue – at a time when the global oil market has virtually collapsed. Iraq’s budget, which consists in large part of government salaries, can balance at a global oil price of about $56 per barrel, but current prices are less than half that amount. Iraq is cutting government expenditures and desperately trying to tap outside sources of funds, such as the International Monetary Fund (IMF), in order to avoid drawing down its $60 billion in reserve funds.

Iraq’s efforts to cope with the financial crisis will likely worsen unemployment even further, almost certainly causing another flare up of the domestic unrest that has been muted in recent months due to the pandemic. In late 2019, widespread protests in Iraq against government corruption as well as rampant underemployment – including demonstrations by Shias that have generally supported Iraq’s governments since 2003 – caused Prime Minister Adel Abdul Mahdi to resign. These grievances are certain to re-emerge when the country’s COVID-19 lockdown measures ease further. Kadhimi generates particular suspicions among protesters because of his most recent role as chief of intelligence, a position that carries the legacy of repression practiced by Saddam Hussein’s regime. None of the difficulties facing the new Prime Minister can be easily addressed, indicating that Iraq may still not be on the road to full sovereignty or stability 17 years after the U.S. invasion that ended Saddam Hussein’s regime.

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