The Katyusha rocket that exploded near the U.S. Embassy in Baghdad’s Green Zone, a fortified area home to Iraqi government offices and foreign embassies, instantly turned Iraq into a new focal point of the collision course that Iran and the United States are on.
The launch was automatically attributed to pro-Iranian forces or Shi’ite militias headquartered around Baghdad, which ostensibly sought to send a message to the U.S. government, and also to the Iraqi government – that it shouldn’t capitulate to American pressure. As with earlier attacks on Saudi ships in the Persian Gulf, there’s still no actual information about who was behind this attack, but it’s clear who was the target.
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Americans are exerting pressure in two directions. One is an effort to sever Iraq’s economy from Iran’s, thereby plugging the expected hole in its sanctions on Iran. The second is aimed at enabling American forces to use Iraqi territory as a launchpad for attacks on Iran, should the conflict turn violent.
Both these issues have sparked political and diplomatic disputes within Iraq, threatening the stability of Prime Minister Adil Abd Al-Mahdi’s government. That government rests on a complex, fragile coalition of Shi’ite, Sunni and Kurdish parties, most of which reject both of Washington’s demands.
Iran is Iraq’s most important trading partner, with bilateral trade estimated at $12 billion a year. Iraq also depends on Iran for natural gas and electricity – two products which, if the supply were halted, could bring masses of people into the streets, just as happened a few months ago in Basra.
This economic dependency, which includes Iraqi debts of about $2 billion to Iran, evolved some years after the Iraq War. This could have been prevented had the Iraqi and American governments been wise enough to control the Pentagon’s enormous investments in Iraq and develop the country’s water and electricity infrastructure and its abundant natural gas fields. Instead, much of the money went into the pockets of contractors, political leaders, cronies and political parties with no supervision, to the point that wealthy Iraq became a bankrupt country that needed huge loans from international institutions.
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Saudi Arabia also contributed to Iraq’s distress by its decisions to eschew diplomatic relations, close the crossings along their land border and treat Iraq as a hostile country because of its Shi’ite government and its increasingly close ties with Iran. Only in 2016 did Riyadh change its policy and open an embassy in Baghdad.
After Mohammed bin Salman became the Saudi crown prince in 2017, relations between the two governments became closer. Nevertheless, they are far from being able to compete with Iranian influence.
In contrast, Iran opened an embassy in Baghdad and a consulate in Erbil, the capital of the Kurdish region, immediately after the war. It forged close ties with the leaders of both Shi’ite and Kurdish parties, advised former Iraqi Prime Minister Nouri al-Maliki to engage in outreach to the Sunnis, cooperated effectively in the war against the Islamic State and sent millions of religious tourists to Shi’ite holy places in Iraq.
Saudi Arabia has since offered to sell electricity to Iraq for significantly less than what Iran is charging. Last month, it announced plans to invest $1 billion to develop projects in Iraq. It talks regularly with Shi’ite leaders and has ordered its own preachers to moderate their anti-Shi’ite statements. And it recently started exploring the possibility of opening a consulate in the Shi’ite holy city of Najaf, a pilgrimage site for the roughly 10 percent of Saudis who are Shi’ites.
The Saudis’ soft diplomacy is combined with America’s hard, threatening diplomacy. America currently has some 5,000 soldiers in Iraq. It withdrew its troops in 2011, but later sent them back to assist in the war against the Islamic State.
Yet when U.S. President Donald Trump said he planned to leave this force in Iraq to “watch Iran,” Iraqis interpreted this as an American plan to make their country a permanent American base, and even use it as a bridgehead for military operations against the Islamic Republic. When Trump said that while the U.S. doesn’t want war, “If Iran wants to fight, that will be the official end of Iran,” it merely intensified the fears of key political players in Iraq, including the influential Shi’ite leader Muqtada al-Sadr, whose party won the most votes in last year’s election.
Sadr, who paid a historic visit to Saudi Arabia in 2017, represents Iraq’s political and diplomatic dilemma. He vehemently opposes an American presence in Iraq, but supports nurturing ties between Baghdad and Riyadh. And despite being Shi’ite, he is no fan of Iran; he wants Iraq to remain neutral in the American-Saudi conflict with Iran.
Iraq’s most important spiritual leader, Ayatollah Ali al-Sistani, also opposes turning Iraq into a front in the war against Iran. He believes Iraq could serve as a mediator between Tehran and Washington, and also between Tehran and Riyadh.
Iraqi neutrality isn’t what Washington wants. It would rather force Iraq to adopt an actively anti-Iranian policy. But it also understands that it might lose its influence and increase Iraqi antagonism toward America without obtaining any compensatory benefits in its battle against Tehran if its pressure results in internal power struggles that undermine Iraq’s delicate political balance.
At this stage, while the only violent aspects of the conflict have been sporadic attacks on Saudi and other ships in the Persian Gulf, attacks on Saudi oil facilities from Yemen and an attempted attack on an American base, diplomatic achievements could still have great importance in containing Iran’s regional status.
Iraq’s public ties with Saudi Arabia, economic alternatives that would gradually allow it to free itself of dependence on Iran and a willingness to give it a role in mediation efforts could all reduce the military threat and bolster the diplomatic track. But for this to happen, America and Saudi Arabia must refrain from depicting Iraq as an Iranian puppet that obeys its orders.