Iraq at a crucial moment (Part 2)

Iraqi Prime Minister Adel Abdul Mahdi’s to-do list is like Mission Impossible. Balancing carefully between Iran and the U.S. is one of many points on the list. He must do it without a secure parliamentary majority. Mr. Abdul Mahdi’s position as an honest broker gives him great strength. However, if reforms fail, Iraq could become another Libya.

Map of Iraq’s administrative and ethnic divisions
Iraqis are sick of bad government. But knitting together a war-torn, ethnically divided country will test even a skilled negotiator like Adel Abdul Mahdi. © macpixxel for GIS

In a nutshell

  • Iraq’s government faces the staggering task of rebuilding the war-torn Sunni north
  • Water and power shortages are stirring anger and mass protests in the Shia south
  • Demobilizing Shia militias and cutting a deal with the Kurds would be key first steps
  • A new mood for change in Iraq may help new Prime Minister Adel Abdul Mahdi

The first order of business for Iraq’s new prime minister, Adel Abdul Mahdi, is to assemble a competent and honest cabinet. That will be difficult, since one of his main political partners, the coalition of former Prime Minister Nouri al-Maliki (2006-2014) and militia leader Hadi Ameri, strongly backed by Iran, insists on controlling key portfolios. Still, Mr. Abdul Mahdi issued a public invitation for any qualified Iraqi to apply for government posts via the internet. It was an important gesture, because the whole country – and particularly in recent months the south – is seething with resentment at government corruption and incompetence.

Mr. Abdul Mahdi’s next task will be to jump-start reconstruction in the Sunni areas of the north and west that were devastated by the war with Daesh, also known as Islamic State (ISIS). Some 150,000 homes and public buildings were destroyed by ISIS and during the Iraqi government’s counteroffensive. The authorities in Baghdad assess the cost of reconstruction to be around $88 billion. Restoring adequate public services, reviving the devastated economy and creating new jobs will be very costly, but little has been done so far. As a result, over 1.8 million of the approximately 3.4 million internally displaced people in Iraq cannot yet return to their homes.

The scale of this humanitarian crisis, along with the excesses committed by Shia militias (primarily the Popular Mobilization Forces, or PMF) while retaking Sunni areas, is exacerbating the crisis atmosphere. Some senior figures in the Iraqi Sunni tribes predict another revolt within a few years. This is reminiscent of what this author heard from Sunni personalities in 2011 about Prime Minister al-Maliki’s anti-Sunni policies – three years before ISIS overran much of northern and western Iraq.

To be sure, the Sunnis of Iraq are much weaker than in 2014. Yet ISIS remnants, estimated at between 3,000 and 30,000 fighters, have regrouped and switched back to hit-and-run tactics. A population that feels Baghdad cares about them is less likely to cooperate with the terrorists.

Shia-dominated southern Iraq suffers from chronic, acute shortages of electricity and potable water.

Some humanitarian assistance has been provided by the United Nations. France and Turkey have promised help as well, but this is just a drop in a bucket.

On the foreign front, the new prime minister will have to walk a tightrope between the United States and the Gulf Arabs on the one side and Iran on the other (see below). Domestically, he will also have to cope with Iranian pressure through the Iraqi Hezbollah Brigades, which now operate within the PMF, to order all remaining American troops out of Iraq. Mr. Abdul Mahdi still needs that U.S. military presence as a security backstop.

Basra riots

War damage in the Sunni north of the country is far from Prime Minister Mahdi’s only reconstruction headache. In the Shia-dominated south, infrastructure is missing or in a ruinous state, while investment is needed to create jobs for vast numbers of unemployed young people. Providing work is also crucial to convince PMF militiamen to shed their uniforms and return home.

There are chronic, acute shortages of electricity and potable water. Much of the electricity in southern Iraq had been delivered by the Iranian grid, and in July Iran decided to reduce supplies to the Basra area drastically. The cutoff was ostensibly caused by payments arrears, though some believe it was a show of force to coerce Baghdad into choosing a compliant government. Whatever the reason, the impact was devastating. Without power and air conditioning, inhabitants of Basra suffered as the summer heat approached 50 degrees centigrade.

Power cuts also affected water supplies. Shortages were already widespread because a five-year drought had caused a severe drop in water levels in the lower reaches of the Tigris and the Euphrates, and even more so in the Shatt al-Arab. Some of this was caused by Iran’s diversion for its own needs of much of the water from tributaries flowing from the Zagros Mountains into the Tigris and the Shatt al-Arab. Turkey, too, is diverting a large share of the water upriver. Completion of the massive Ilisu Dam, which is expected to come online soon, will only compound the problem.

Lower water levels have resulted in unprecedented pollution. As water flows through the Shatt al-Arab have declined by about 55 percent, seawater has crept up the waterway by as much as 50 kilometers. Already suffering from lack of drinking water, residents of Basra were infuriated when flows were diverted to fish farms owned by well-connected business people.


Facts & figures

Where Iraq gets its water

(by country of origin)

Map and chart of main sources of water for Iraq
This summer 4,000 people a day were hospitalized in Basra from drinking contaminated water. The Shatt al-Arab is less than half its usual level, and Turkey’s Ilisu dam could further cut flows. © dpa

A bad situation was made desperate by poorly maintained, leaky water systems. Between July and August 2018, about 100,000 people in the Basra area required medical treatment for drinking contaminated water. According to the director of the Basra Health Department, up to 4,000 people a day were hospitalized for this reason alone.

To this should be added the failure of provincial governments in the south to provide basic services from health and education to courts of justice and housing. Local unemployment rates have reached 20 percent, and the quality of life is significantly lower than under Saddam, even though the Shia community is now supposedly in power.

The Basrawis felt like a starved milk cow. The deep south provided Iraq with almost all of its oil revenue, yet a corrupt, inept and indifferent government in Baghdad was siphoning off all the money without giving anything in return. People turned their fury against the politicians within reach – mainly local officials. The office of the provincial governor in Basra was torched, along with several local party headquarters. Also attacked were PMF militia offices and a PMF hospital, a court building and the private homes of several local officials. Even the office of Prime Minister Haider al-Abadi’s Victory Alliance was ransacked. Crowds demanded that all provincial governors and councils (majlis) be dismissed, and that corrupt officials be prosecuted.

Not surprisingly, anger was also directed against Iran: the Iranian consulate in Basra was torched, posters of Supreme Leader Ayatollah Khamenei went up in flames, and anti-Iranian slogans were shouted. Ayatollah Sistani supported the protesters. Iran accused the U.S. of inciting the protests, and someone lobbed a few rockets in the direction of the U.S. consulate. None scored a hit, but the State Department ordered the facility evacuated.

Mr. Abdul Mahdi will have to show his good intentions toward the south with major budget appropriations.

Between July and September, 27 people died and several hundred were injured in the Basra protests. Demonstrators shouted a combination of Shia and Islamic slogans, including Allahu Akbar (“God is great”), but also raji’ilkum (“We are coming for you”), in reference to government officials and politicians. In mid-September, Prime Minister al-Abadi, still hoping for a second term, risked a visit to Basra, only to be met by angry demands for his resignation. This moment appears to have been the moment Muqtada al-Sadr and his Sairun coalition decided to withdraw support for Mr. al-Abadi. By mid-November, Basra was still seeing mass demonstrations, mostly directed against the provincial council and the state-owned Basra Oil Company.

Ever since the British occupation of Basra in 1914-1915, there have been occasional local demands to secede from Iraq or at least achieve regional autonomy. The latter demand was raised again as soon as the Kurds were granted self-government following the 2003 demise of the Baath regime. It was voiced during the most recent protests in Basra, including from some local members of parliament.

Surprisingly, former Prime Minister Nouri al-Maliki’s State of Law Coalition endorsed autonomy for Basra in November 2018 – a step Mr. al-Maliki had rejected fiercely when he was in power. The decision appears to be purely tactical, as a way of regaining popular support in the south while damaging Mr. Abdul Mahdi and his new cabinet. If the prime minister wants to avoid such devolution, he will have to show his good intentions toward the south with major appropriations in the revised 2019 budget bill, which will soon reach parliament.

Massive investments in desalination plants are essential to alleviate water shortages in the south. If the Iraqi budget cannot afford it, Mr. Abdul Mahdi must turn to the Kuwaitis, Saudis and Emiratis for financing. Another approach would be to copy Israel and award contracts to private companies, which would build the plants in exchange for long-term government commitments to buy an agreed quantity of water every year.

As for electric power, only the Gulf Arabs can provide immediate help. Iran is facing huge economic difficulties that will be compounded by U.S. sanctions. If the Gulf states want Iraq to reduce its dependence on Iran, they should be willing to sell subsidized electricity to the south. This is an area where Prime Minister Mahdi’s Gulf connection may come in handy.

The Trump administration wants to limit its exposure to Iraq, as shown by its evacuation of the Basra consulate.

American investment would be welcome, but Iraq should not expect too much. The Trump administration wants to limit its exposure to Iraq, as shown by its decision to evacuate the U.S. consulate in Basra.

One telling indicator of the sectarian divide in today’s Iraq is that no Sunnis came out in support of the mass protests in the south, even though they suffer similarly from Baghdad’s neglect and even more devastated infrastructure.

Security dilemmas

The new prime minister’s security concerns are many. One is to secure the border with Syria and cut off the remaining Daesh cells in Iraq from Syrian Sunni support. Another is eliminating or at least drastically curtailing ISIS activity in the northern territories between the Kurdish autonomous region and the Syrian border – mainly the Kirkuk area, Makhmur, the Mosul plains and the far northwest.

The latter cannot be done without the full cooperation of the Kurdish Peshmergas, which requires an agreement with the Kurds on outstanding issues. The loss of Kirkuk is the sorest spot in Kurdish politics, and Mr. Abdul Mahdi will have to strike a compromise that will probably leave everybody concerned – Baghdad, the Kurds and the Turkomans and Arabs living in Kirkuk – reasonably unhappy.

The Iraqi military is in disarray. The only ground formation of proven combat-readiness is the 10,000-strong Counter-Terrorism Service (CTS), whose three brigades are known collectively as the Golden Division. These units are U.S.-trained and proved to be courageous and effective in the nine-month campaign to retake Mosul in 2016-2017. In the event of a new ISIS-style revolt, however, this force will not suffice.

Iraq’s regular army is well-equipped, but suffers from corruption, poor discipline and insufficient training. To remedy these deficiencies, Mr. Abdul Mahdi badly needs help from the remaining international forces in Iraq, especially U.S. support units, instructors and military intelligence.

About 40 different formations with some 100,000 fighters operate under the PMF umbrella.

The new prime minister must also at least try to rein in the Iranian-sponsored militias. About 40 different formations with some 100,000 fighters operate under the PMF umbrella. Almost all of them are staunchly pro-Iranian and partially paid and equipped from Tehran, but also receiving salaries and munitions from the Iraq government. The PMF’s most powerful leader, Hadi Ameri, is something of a nemesis to Mr. Abdul Mahdi. Of the three PMF groups that are clearly independent of Iran, two are answerable to Ayatollah al-Sistani, while one is under Muqtada al-Sadr’s orders. Relations between the PMF and the Iraqi regular military are sometimes tense, but so far, there have been no reports of direct confrontations.

Taming the PMF

In Sunni areas, the Shia militias are feared. Ayatollah al-Sistani has demanded that they look after and protect the Sunni population, but this has proven no guarantee of good behavior. The U.S. insists that the PMF be disarmed. Both Mr. al-Sadr and Ayatollah al-Sistani want all militias to disband, but Iran has fiercely resisted these calls.

It will be extremely difficult to dissolve the PMF, which was established as a result of Ayatollah al-Sistani’s 2014 call to arms against ISIS. The marginalized young men of the Shia southern provinces who tasted power and influence will not give it up, unless offered something better. Going home to joblessness and poverty is hardly an incentive to take off their uniforms.

In the meantime, unruly PMF commanders are proving a continual source of embarrassment to the authorities in Baghdad. Several made a trip to the Israeli-Lebanese border a few months ago, where they promised to join Hezbollah in fighting against “the Zionist entity.” On October 27, another PMF faction, the Imam Ali Battalions, announced it was planning to fight the Saudis in Yemen alongside the Houthi rebels.

Shia militiamen pose in the ruins of Mosul, Iraq
Shia militiamen in the Popular Mobilization Forces (PMF) helped the government forces roll back ISIS in northern and western Iraq. They also struck fear in much of the Sunni population. © dpa

If Mr. Abdul Mahdi cannot discipline the PMF, he can expect Israeli reprisals and forget about economic support and investments from the Gulf Arabs. If pro-Iranian militias keep lobbing mortar shells and rockets at American interests, as seems to have happened at the Basra consulate and in a more recent incident in Baghdad’s Green Zone, the U.S. also has many ways to show its displeasure.

The sole plausible solution in the medium term is to create jobs for some of the militiamen and send them home. The rest will have to be absorbed into the Iraqi army. This is the only way for the Iraqi state to regain its Weberian “monopoly on violence.”

However, the technical details are important here. Former militiamen should be inducted into the Iraqi military as individuals, not as organized groups. A useful example is provided by Israel in 1948-1949, when Prime Minister David Ben-Gurion (1948-1963) forced the Irgun and even the elite Palmach units to disband and join the Israel Defense Forces (IDF) individually.

Yet Mr. Abdul Mahdi’s first step was in the opposite direction. In mid-November, he equated the status and salaries of the PMF militia with the Iraqi military. Given the 50 or so votes controlled by the militias or pro-militia parties in parliament, this made it easier for the prime minister to complete his cabinet. But in the longer term, it will make any reform of the PMF much more difficult.

The Kurds

Iraqi Kurdistan held parliamentary elections on September 20, 2018. The Kurdistan Democratic Party (KDP) came in first, winning 45 out 111 seats in the regional parliament, compared with 38 in the 2013 elections. The KDP’s historic rival and junior coalition partner, the Patriotic Union of Kurdistan (PUK), won 21 seats, up from 18 in 2013.

The ballot appears to cement the KDP’s continued dominance in Kurdish politics. The party very much belongs to Kurdistan’s former President Massoud Barzani (2005-2017), though it is nominally led by his nephew, Nechirvan Barzani. The PUK is led by another powerful Kurdish clan, the Talabani family, and its deputy leader, Kosrat Rasul Ali, is slated to join a coalition government . The PUK is more conciliatory toward Baghdad, but both parties have similar demands. Most of all, they want the Kurdistan Regional Government (KRG) to receive 17 percent of the country’s oil revenues and control of the disputed city of Kirkuk. Other demands include funding for the Peshmerga militias, the right to sign oil contracts, and supervision of border crossings between Kurdistan and its neighbors.

The Kurds had much more political leverage before their disastrous independence referendum in 2017.

The Kurds had considerably more political leverage before their disastrous independence referendum of September 2017. In its aftermath, Iraqi forces retaliated by seizing Kirkuk and its surrounding oil fields, along with vast additional territories beyond the KRG’s borders that the Kurds had used as bargaining chips to wring concessions from Baghdad. Now, the KRG is demanding a referendum in Kirkuk to decide whether the region should be part of Iraqi Kurdistan or subject to Arab rule.

For now, it appears doubtful that the referendum will be held. While the Kurdish former governor of Kirkuk, Dr. Najm al-Din Karim, was popular with almost everyone in the ethnically mixed city, the Arab and Turkmen population does not want to be part of the Kurdish autonomy. The Kurds are pushing for a referendum because they have a narrow majority in the city and its environs. Yet with Iraqi government forces now firmly in control, their negotiating position is weak.

Even if Mr. Abdul Mahdi were inclined to make concessions, the two Shia coalitions that form his main support base in parliament will be opposed. Unless a sensible compromise is reached, it appears the situation in Kirkuk will remain unstable.

On a tightrope

The prime minister must strike a delicate balance between Iran on one hand and the U.S., the Saudis and the Gulf states on the other. This is required for his domestic political survival. Without a solid parliamentary majority, Mr. Abdul Mahdi could be toppled by the Sadr-Abadi coalition if he moves too close to Iran, or by the Ameri-Maliki coalition, if he tilts too far toward the U.S. To stay in power, he will have to navigate very carefully and make constant course adjustments.

But this equivocal position also gives the prime minister considerable leverage. With deft footwork, he will be able to impose his decisions on both rival coalitions, because by toppling him they would create a political crisis impossible to resolve without new elections. The trick will be to give each coalition enough to make the cost of forcing him out of office prohibitive. No previous Iraqi prime minister has enjoyed Mr. Abdul Mahdi’s unique status, both vulnerable and strong.

To avoid angering Iran, he will have to follow the policy of the Maliki and Abadi governments by leaving in place the vital supply line to Syria and Lebanon. Iranian cargo planes and civilian jetliners loaded with military supplies for Damascus will continue to use Iraqi airspace. But if Mr. Abdul Mahdi allows ground movement of military units through Iraq into Syria, this would tip the scale and provoke American and possibly Israeli reprisals. The same goes for allowing Iran to position medium-range missiles on Iraqi soil.

As for the U.S., it is very much in the prime minister’s interest to keep the small American contingent now in Iraq in place. The Iraqi military needs the training and quality intelligence it provides, along with American logistical and air support to help prevent another ISIS surge. Therefore, Mr. Abdul Mahdi can be expected to resist or dither on demands from Iran and its local Iraqi supporters, along with Mr. al-Sadr, for the Western coalition forces to leave. If he demands an immediate evacuation, this will indicate a substantial tilt toward Iran.

International aid workers in northern Iraq
International aid workers inspect the ruins of Mosul’s old town. The war with ISIS destroyed 50 percent of northern Iraq’s infrastructure and buildings; reconstruction may cost $88 billion. © dpa

Another flash point is the reimposed embargo on Iran. Any violation or collaboration with Iran on the Iraqi side will inevitably strain relations with the U.S. and its allies. However, abiding by the embargo will raise tensions with Tehran even more, while dealing a blow to the Iraqi economy. For this reason, Mr. Abdul Mahdi declared on the day of his swearing in that Iraq would “remain independent” on the application of U.S. sanctions. Later, he said that Iraq would serve its own interests.

Exactly what Mr. Abdul Mahdi meant by this was perhaps revealed on October 26, when two sources within the Iraqi Ministry of Oil informed Reuters that Iraq would stop exporting crude oil to Iranian refineries from Kirkuk. Iraq had been trucking at least 30,000 barrels of crude oil a day along this route. By late November, the Iraqi prime minister officially requested a U.S. waiver on imports of refined oil products, gas and electricity from Iran (Iraq does not have sufficient refining capacity to process its own crude). Iraq said it would offer agricultural products in exchange, though it is not clear it has enough to export. Baghdad’s needs will not be met by the 45-day exemption promised by the U.S. embassy; a period of several months at least would be required.

Whatever Washington’s decision, Iraq urgently needs new investments in power generation and oil refining – both from domestic and foreign sources. The neglect of these necessary capital outlays by a state with so much oil and gas income is astonishing. As a first step, Basra should be encouraged to buy electricity from Kuwait. Iran’s contribution to the Iraqi economy can easily be replaced by the Gulf Arabs, provided they are ready to step in.

A new player

One of the striking features of Iraq’s new regime is the unprecedented way President Barham Salih is acting. First was his quick nomination of Adel Abdul Mahdi as prime minister, without consulting the parliament. But he has been unusually active on the diplomatic front as well.

In November 2018, even before the new cabinet slate had been approved by parliament, Mr. Salih paid official state visits to Kuwait, Abu Dhabi and Jordan, while announcing plans to travel to Saudi Arabia as well. His main topic of discussion was economic cooperation. There can be little doubt that these steps were approved by Prime Minister Abdul Mahdi.

Mr. Salih’s burst of activity is a bold way for Iraq’s new power duo to show their intention of remaining as independent as possible from Iran. Even so, these gestures were immediately balanced by an announcement that the Iraqi president would soon visit Tehran. He is clearly acting as a kind of diplomatic surrogate for Mr. Abdul Mahdi, who is biding his time at least until he has a fully fleshed-out government.

Oil and budget

Iraq has continued to ramp up its oil output to about 4.6 million barrels per day (mb/d) in October 2018. Some forecasts put production at 5 mb/d next year, with the plan to increase output to 7.5 mb/d by the mid-2020s, both from the southern fields and from Kirkuk and Kurdistan.

Recently, Baghdad and the KRG signed a new agreement on oil exports from Kirkuk to the new Turkish refinery in Ceyhan, on the Mediterranean Coast. This could be the first step toward a wider agreement on the KRG share of Iraqi oil revenues. Until now, the two sides remain far apart, as Baghdad agrees to a 12 percent share while the Kurds are demanding 17 percent.

Many Sunni lawmakers opposed the 2019 budget because of scandalously low reconstruction spending.

This wrangling was evident as Iraq’s parliament worked on the 2019 draft budget (inherited from the al-Abadi government), which was rejected in mid-November. The Kurdish parties voted against it because it continued to set their oil revenue at 12 percent of the total. Many Sunni lawmakers were also opposed because of the scandalously low expenditures earmarked for reconstruction.

For example, Nineveh province, which includes Mosul, contains 10 percent of Iraq’s population but received a budget allocation of only 1 percent, even though the war against ISIS had destroyed an estimated 50 percent of its homes, businesses and infrastructure. No extra money was earmarked for Basra to deal with its water, power and unemployment problems.

All this points to the need to restructure the 2019 budget. Despite the recent jump in oil output and prices (which averaged $65-$67 a barrel in November), the budget’s total dependence in oil income (88 percent of total revenue) means that any decrease in oil prices would send the economy into a tailspin. Even though the gesture was purely symbolic, Muqtada al-Sadr showed the way by demanding drastic cuts in politicians’ perks, starting by selling off all the government limousines that had been given to members of parliament at state expense.

Ifs and buts

Iraqi Prime Minister Adel Abdul Mahdi has a lot on his plate. In a country half destroyed by war, public frustration with official incompetence and corruption runs deep. Sunnis are in a state of post-ISIS despair, terrorism continues, and intra-Shia rivalries threaten the fragile equilibrium of parliamentary coalitions. Riddles for Mr. Abdul Mahdi to solve include how to evade Iranian threats and delay or limit compliance with the American embargo, how to break the deadlock with the Kurds over oil revenue and Kirkuk, and how to defang the PMF militias and get them out of politics.

On the other hand, the May elections and the Basra riots showed the country is in a new mood that could be conducive to political change. A young, disillusioned generation expects a different kind of politics. This was evident in the selection process of the new government and in the way President Salih and Prime Minister Abdul Mahdi are working together. Iraq’s present balanced position between Tehran, Washington and the Gulf Arabs also looks promising.

Shias in Iraq are certainly disenchanted with Iran, but that may not keep Tehran’s influence at bay.

However, Iran’s presence and influence in Iraq is so massive, and its interest in incorporating the country into its strategic domain is so great, that the two new leaders in Baghdad may not be able to withstand it, or at least not completely. Shias in Iraq are certainly disenchanted with Iran, but that may not be enough to keep Iranian influence at bay.

Iraq’s huge needs and limited resources mean it will take time to heal a wounded economy and society. Yet if Mr. Abdul Mahdi and his government play their cards right, they may get a full four years to start the process. Most of all, the authorities must convince a skeptical public that they can be honest and effective.

Then, if a variety of other conditions are met – if Iran accepts Iraqi independence, if the Sunnis and Kurds are not forgotten, if the PMF militias can be curbed and the Iraqi military retrained, if the U.S. and the Gulf Arabs provide investment and support – Iraq may have a chance. Otherwise, the scenario that awaits is Libya.

Click here for Part 1 of this report.

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