By Baria Alamuddin
November 16, 2020
Arab investments are a “threat” to Iraq: This is what pro-Iran elements are claiming following the landmark meeting between Saudi Crown Prince Mohammed bin Salman and Iraqi Prime Minister Mustafa Al-Kadhimi, and coinciding with the visit of a Saudi trade delegation to Baghdad. Nouri Al-Maliki, puppet of the ayatollahs and former prime minister, denounced this economic support as “colonialism.” Paramilitary warlord Qais Al-Khazali accused Arab states of “harming the security and stability of Iraq.”
Yet this GCC aid is poised to have a transformative impact. A single Saudi project for cultivating a million hectares of land encompasses the impoverished Shiite province of Muthanna where, despite its proximity to vast oilfields, 52 percent of citizens live in poverty, with sky-high unemployment. With Maliki, Khazali and Tehran seeking to obstruct such investment, it is clear who is betraying the interests of ordinary Iraqis.
These panicked litanies by Iran’s proxies are a welcome indicator that Iraq’s relationships with its Arab neighbors are finally bearing fruit. This is also a reminder of how economic and political dynamics are intimately intertwined.
Tehran seeks to monopolize and perpetuate Baghdad’s economic dependency with the aim of consolidating Iraq as a vassal state. Arab economic support is welcome in its own right, but this is also about breaking the Iranian stranglehold and reintegrating Iraq into the Arab world.
Iran dominates Iraq via the Al-Hashd Al-Shaabi paramilitary coalition, which as well as exerting military control over most Iraqi provinces also holds a critical mass of seats in the parliament. Kadhimi is Iraq’s first prime minister since 2003 who has modest intentions for challenging this paramilitary dominance. He has been accused of moving too cautiously, having remarked that “1,000 years of discussion is better than one moment of exchange of fire.” He’s right to worry that his paramilitary enemies will resort to extreme lengths in order to thwart him. However, if Kadhimi fails to move rapidly and decisively, his good intentions will amount to nothing.
With the Western world distracted by the dying moments of the Trump regime, the pivotal role of Arab states is more crucial than ever, and there is a vast amount of catching up to do. Iraq’s current minuscule non-oil trade with Arab neighbors is dwarfed by its bilateral trade with Iran, at around $13 billion annually. Iraq and Saudi Arabia resumed diplomatic relations only in 2015, and the sole crossing point at Arar has been closed for trade and non-pilgrim travelers.
Kadhimi was also recently in Jordan and Egypt, with the latter trip focusing heavily on enhanced bilateral trading relations. Fifteen agreements pledged Egyptian support for strengthening Iraq’s healthcare, economic and infrastructure sectors. With this flurry of regional engagement, for the first time in years Kadhimi looks serious about restoring Iraq as an active and prominent component of the Arab world.
Yet this $13 billion in Iran-Iraq bilateral trade is dominated by cheap Iranian imports. Iraqi exports to Iran have often hovered around a woeful $400,000. Iraqi traders warn that Tehran deliberately floods local markets with cut-price goods with the intention of destroying Iraqi economic production and making markets wholly reliant upon Tehran. A new commercial rail link between the two countries threatens to make this stream of Iranian goods into a deluge. Nevertheless, the halving of Iranian non-oil imports to Iraq during 2020 illustrates their susceptibility to changing economic realities.
In recent mass protests throughout Shiite southern regions, demonstrators called for measures to end the dumping of Iranian goods, as well for closing down predatory militias. Prime Minister Kadhimi should capitalize on these pressures for following through on his promises to curtail paramilitary dominance.
This July, Kadhimi used his first trip abroad as prime minister, to Iran, to assert Baghdad’s sovereign right to balanced relations with all nations. Furthermore, Iran’s emphasis on economic ties during this visit — at the expense of pressure for US troops to depart Iraq — highlighted Tehran’s increasingly precarious and desperate financial plight.
Curtailing Iran’s vast paramilitary assets requires cutting off their illegal sources of revenue. Illegal customs duties on goods travelling between Kurdish and Arab regions were netting the Badr militia an estimated $12 million-$15 million per month; while Qais Al-Khazali’s force, Asaib Ahlulhaq, was earning $300,000 a day through checkpoint fees in Diyala province alone. In Basra, militia profits from oil smuggling are assumed to be exponentially larger.
Kadhimi should slash the $2 billion-plus Hashd budget, forcing a reduction in dangerously inflated paramilitary numbers, particularly at a time when teachers and other public sector workers have been protesting over months of unpaid salaries. With the 2020 budget delayed by months amid soaring debt and depleted income, the government is resorting to additional borrowing to cover an unaffordable $6.8 billion in monthly public sector salaries. It is no longer financially sustainable for the state to be bled white by corrupt agents of Iran.
Kadhimi recently swore that paramilitary murderers of activists, journalists and intellectuals such as Reham Yaqoub and Hisham Al-Hashimi would “not escape punishment, however long it takes.” Yet if Kadhimi is serious about delivering justice, this is not about detaining the low-level perpetrators, but rather dismantling these entire terrorist networks with the blood of thousands of Iraqis on their hands.
Kadhimi isn’t Superman. His achievements so far are almost too modest to mention. However, for the foreseeable future he may be Iraq’s best prospect for cutting overmighty militias down to size.
This torrent of Arab investment and aid is important and commendable. But while Tehran is at its weakest, now is the time for a massive surge in Arab political support, enabling Kadhimi to follow through on pledges to curtail the power of Iran’s paramilitary hordes once and for all.
Baria Alamuddin is an award-winning journalist and broadcaster in the Middle East and the UK. She is editor of the Media Services Syndicate and has interviewed numerous heads of state.