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Iraq and Its Gulf Neighbors: Transforming Challenges into Opportunities

In recent months signs have emerged that the Gulf may be witnessing a revival of Iraq’s foregone role as a strong regional player, both in the immediate Gulf region and the greater Arab world. However, in spite of this reemergence, Baghdad’s return to this role is challenged by the tremendous economic and security challenges that have resulted from three wars occurring over the past four decades in Iraq. These conflicts have left the oil-rich state with a devasted infrastructure and a dismantled state, two factors that contributed to Iraq’s emergence as an open arena for regional and international rivalry. Two major events that occurred in 2018 can be credited for pushing Iraq to self-direct a foreign policy independent of the U.S.-or-Iran-directed policies that Iraq has followed since 2003.  The first event was Iraq’s declaration of victory over ISIS. The second was the revival of an Iraqi national identity characterized by a rejection of sectarianism and foreign intervention, an identity that was disrupted by the U.S. invasion. This return has been evidenced by two factors. First, a recent election result gave plurality to a bloc promising to fight corrupt politicians and Iranian or American intervention in Iraq. Second, massive protests throughout Iraq denounced sectarianism, corrupt politicians, and resulted in attacks against the headquarters of Iran-backed parties centers that were symbolic of the very corruption and interventionism Iraq was working to expel. Simultaneously, ­­­Iraqi rapprochement toward many GCC states -first motivated in 2017 due to economic and energy collaboration- has accelerated after decades of outright hostility or cold relations. While Iraq’s need for defense and security support from Washington and Tehran has been an impediment for Baghdad to fully exert its sovereignty, the tremendous increase in rivalry among the Gulf states and the growing involvement of the U.S. raises the odds that Baghdad will be able to expand its regional influence. In order to do so, Iraq may bargain strategic partnerships in exchange for domestic security or economic gains.

Baghdad is Under Pressure, But Also Has Cards to Play:

Since Iraqi Prime Minister Adil Abdilmahdi came to power in November 2018, many Gulf states began pushing for stronger relations with Baghdad. Six months after his government’s formation, this has developed into an all-out race toward Iraq, a country that for a long time remained isolated by most of its neighboring Arab Gulf states. Between November 2018 and April 2019 at least 8 delegations from Iran, Kuwait, Saudi Arabia, and Qatar have visited Baghdad and Erbil. In the same period, Iraqi officials made at least one visit to each of these four Gulf neighbors. These nations approached the new Iraqi government with generous offers for trade, transportation, and energy collaboration that are obvious attempts to create a strategic partnership with a recovering Iraq. Yet, in this climate of increasing tension between Iran on one side, and its rivals the UAE and Saudi Arabia on the other, the new Iraqi government has had to set new parameters for approaching bilateral relations with its neighbors.

Since Iraq is the only democracy in the Gulf region where voters can end the career of any politician who does not deliver tangible results, the new government seems insistent to direct its foreign policy to serve the country’s economy and security. This fact could have pushed Prime Minister Adil Abdilmahdi and President Barham Salih to pursue a policy that distances Baghdad from the region’s increasing hostility. At the same time, the new government is probably determined to remain neutral as a result of pressure from Iraqis who view any foreign intervention in Iraq as an attempt to undermine the country’s economy or revive the sectarianism that has historically weakened and fragmented what was once one of the world’s richest states. These factors and Iraq’s need for its neighbors have forced the new government to present policy and willingness to approach all parties for different collaboration motives. This strategy has become pivotal for the new government to prevent additional internal unrest.

Since the new government’s formation last fall the Iraqi president has clearly defined his country’s foreign policy as “Iraq first,” due to the fact that the country’s future stability requires that it refrains from regional tension.[1] Yet, Iraq might have a rare chance to use the current conditions for its own benefits. For instance, the drop of Iran’s oil exports as a result of the U.S. sanctions could be leveraged by the new government to increase its oil production quota at OPEC’s upcoming meeting where it is expected to end currently applicable production cuts. This comes at a time when Iraq (the second largest oil producer in OPEC) has made plans to increase its oil output capacity to 5 million bpd.[2] Heightened production would help the country’s economy and enable Baghdad to influence OPEC’s production quotas, a benchmark that has recently been dominated by Saudi Arabia and its 11 million bpd production capacity.

Yet, the region’s overall situation is challenging for Iraq foreign policy architects since both Tehran and some GCC states maintain leverage over Iraq’s equally important need for security and economic prosperity. At the same time, Iraq has cards to play on both sides. With Iran, Iraq understands that Tehran’s influence over Iraq’s Popular Mobilization Units can be wielded against Tehran’s needs for Baghdad’s collaboration in trade and energy sectors in order to mitigate the impact of U.S. sanctions on Iran’s economy. Conversely, rich GCC states hoping to lower Iran’s influence over Baghdad will counter the Islamic Republic by also investing in the country, a reciprocal benefit for an Iraq seeking to widen its trade partners in the Gulf region and attract foreign investments. Still, the Iraqi government will probably remain wary of some GCC states’ roles as they understand that Baghdad’s intervention in ongoing Saudi-Iranian tension might inadvertently drag Iraq into yet another conflict. Therefore, possibly the best approach for some GCC states is to invest in its relations with Iraq as a key rich Arab Gulf state, rather than designing their foreign relations with Baghdad on the principle of fighting Iran’s influence.

Arab Gulf States Crafting a Strategic Partnership with Iraq:

The first signs of GCC state rapprochement with Iraq began in 2017 when officials from Qatar and Saudi Arabia either visited Baghdad or received Iraqi officials in Doha and Riyadh. A turning point was the inauguration of the Saudi-Iraqi Coordination Committee, and the Qatari-Iraqi High Committee which heightened the level of coordination and facilitated previously agreed to bilateral agreements, as well as the establishment of plans for future collaboration.[3] Moreover, during a recent diplomatic rift between Iraq and Bahrain over tweets in which Muqtada Al-Sadr (an influential cleric and head of Iraq’s largest parliamentary bloc) called for the removal of Bahraini King, Riyadh seemed determined to protect its restored ties with Baghdad as evidenced by the Saudi government’s tempered response when rejecting the interference in Bahrain’s sovereignty.[4] Saudi Arabia’s approach to get closer to the influential Shiite cleric was made clear when Crown Prince Mohammed Bin Salman met AlSadr in Jeddah in July 2017. Two weeks after this meeting Saudi Arabia announced the reopening of Saudi-Iraqi borders that have remained closed in the 27 years since the first Gulf War.[5] [6] In the same year the Qatari Deputy Prime Minister and Minister of Foreign Affairs made more than one visit to Baghdad and announced plans for Qatari investment and funding of Iraq’s expensive reconstruction plans. Also, in February 2018, two months after Iraq declared its victory over ISIS militants, four GCC states (Kuwait, Saudi Arabia, Qatar and the UAE) at a Kuwaiti-held international conference pledged $5 billion to fund Iraq’s rebuilding process, the highest pledges after Turkey and the U.S.[7] [8]

While these economic relations and investments make clear Saudi Arabia is aiming to fight Iran’s influence in Iraq, Qatar instead probably views its bilateral agreements with Iraq as a strategic partnership with a new rising power in the Gulf region that may compensate for the GCC’s clinical death following the ongoing rift with Riyadh. On the other hand, Kuwait is probably viewing Iraq’s stability primarily through a national security lens. This was evident during the massive demonstrations in Iraq’s central and southern governorates near the Kuwaiti borders when Kuwait sent delegations and offered all support needed to end the economic and energy troubles that triggered the demonstrations.[9] Naturally, this interest stems from the fact that any chaos in southern Iraq could produce a wave of refugees and other security vulnerabilities affecting Kuwait’s national security. These and other factors pushed Kuwait to make the highest pledge among the GCC states to Iraq’s reconstruction fund, as well as proposing solutions for Iraq’s LNG and electricity crises and establishing a free trade zone.

Trade, transportation, energy agreements and diplomatic relations have continued to improve between Iraq and many GCC states through 2018 and 2019. Since the formation of the new government, Iraq has signed several agreements on electricity, power plants, transportation and trade with Kuwait, Saudi Arabia and Qatar, a sign that Baghdad is attempting to lower its power reliance on Tehran.[10] [11] [12] Although recent steps are considered remarkable milestones in Arab Gulf state relations with Iraq, Iran still has the tools and may prove willing to fight any new role in Iraq that challenges its influence, including the Americans and Gulf Arabs. This leverage was most clearly evidenced when Iran cut-off power for Iraq due to late payments. This outage alone triggered the biggest wave of unrest and demonstrations Iraq has seen since the toppling of Saddam Hussein. The message that Iraq needs Tehran could not have been made more clear.

Additionally, despite Arab Gulf state attempts to begin a new chapter with Baghdad by strengthening diplomatic representation, the Arab Gulf still has a long way to present themselves as reliable economic or energy partners. Meanwhile Iran, as Baghdad’s second largest trading partner, is a well-established  cornerstone that plans to increase bilateral trade from $12 billion to $20 billion.[13] Also, Baghdad and Tehran recently waived the visa entry fee between the two countries, a contrast to the GCC states, each of which still requires Iraqis to acquire a hard-to-obtain entry visa.[14]  Additionally,  trade volume between Iraq and the GCC states cannot compete with Iran-Iraq trade numbers. In terms of soft-power, some GCC states are unable to compete for influence among the majority Shiite across Iraq’s societal and political spectrum. For many, Iraqis’ cautious view toward GCC influence comes from some GCC based Wahhabi Ulama scholars who have made several fatwas leveling hate speech against Shiite Muslims.[15] [16] These displays of religious tension feed into sectarianism, a trend at which Iraqis have recently demonstrated considerable disdain. Any Iraqi politician or cabinet carrying out an agenda that could be viewed as dragging Iraq into the Sunni-Shiite sectarian conflict fueled by Saudi-Iranian tension will face significant obstacles.

Despite all these challenges, the GCC states do have a considerable chance at becoming a strategic partner for Iraq if Baghdad comes to view this as a beneficial partnership for its economy and security that will not suck Iraq into a regional agenda that detrimental to its fragile security and economy. This fragility was on display at recent meetings led by Iraqi officials who presented Baghdad’s foreign policy as one that relies on collaboration with its Arab surroundings as a way to refrain from regional tensions. A clear sign from Baghdad that it is seeking to revive its role within the Arab Gulf and neighboring countries came when it hosted a meeting of Parliament Speakers from neighboring countries, bringing together a symbolic meeting of rivals from Turkey, Syria, Iran and Saudi Arabia. The meeting demonstrated an interest among each of Iraq’s neighbors to humor Baghdad by accepting an invitation to a meeting that seemed nearly impossible. This same approach, coupled with the “Iraq first” policy has extended Baghdad’s partnership plans to include Jordan and Egypt during a tripartite summit with the Jordanian King and Egyptian President, a step that could reposition Iraq on the Arab World map as a strong and reliable ally.[17] Iraq’s careful balance and impartiality during the Gulf crisis also shows that Iraq feels it needs help from both sides if it is to revive its economy and execute its rebuilding plan. Despite this declared neutrality however, some observers saw then-Iraqi Parliament Speaker Salim Aljbouri’s visit to Doha as a symbolic show of support for Doha.[18]


Iraq can only be able to take a leading role in the region if and when the state secures stability and economic growth. Until then its foreign policy will remain hostage to regional powers and tensions that try to leverage Iraq’s economic and security needs for their own benefits. As it is expected that both Iran and Saudi Arabia will continue their attempts to drag Iraq into their bilateral tensions, Iraq should use this opportunity to sustainably address it’s electric-grid needs. As for the remaining of the Arab Gulf states, Iraq’s best course of action would be to balance its bilateral relations with each of its Arab neighbors to garner economic gains, mainly now as Arab Gulf countries are looking to expand non-oil sector investments with several countries. A strong Iraqi economy and the empowerment of Baghdad’s state institutions are in the best interest of the Arab Gulf states and the U.S. as it would signal regional balance and a decrease in Iran’s influence. This latter sign is even more prescient given that Iraq’s democratic institutions mean increased Iraqi skepticism toward Iran is coming from the Iraqi people themselves.



Gulf International Forum



[1] “The President: We Want to Pursue a Balanced Regional Policy, Our Moto is “Iraq First”.” Iraqi Presidency. February 27, 2019

[2] Ahmed Rasheed and John Davison. “Exclusive: Iraq to increase oil output and exports, waits on Iran sanctions – minister.” Reuters. November 6, 2018

[3] Huthifa Fayyad. “Renewed Saudi-Iraq ties ‘to rival Iran’s influence’” Aljazeera. October 25, 2017

[4] “Saudi Arabia supports ‘respectful ties between Bahrain and Iraq’.” Middle East Monitor. May 1, 2019

[5] “Iraq’s Muqtada al-Sadr makes rare Saudi visit.” Aljazeera. July 31, 2017

[6] Katie Paul and Ahmed Rasheed. “Saudi Arabia and Iraq to re-open border crossing after 27 years.” Reuters. August 15, 2018

[7] Margaret Coker and Falih Hassan. “Iraq Prime Minister Declares Victory Over ISIS.” The New York Times. December 9, 2017

[8] “Kuwait International Conference: Increased GCC Role for Reconciliation in Iraq.” Gulf International Forum. February 20, 2018.

[9] Baxtiyar Goran. “Kuwait provides fuel to Iraq to overcome electricity crisis.” Kurdistan24. July 21, 2018

[10] “Saudi Arabia, Iraq Sign 13 Cooperation Deals during PM Visit to Riyadh.” Asharq Al-Awsat. April 17, 2019

[11] “Iraqi, Kuwaiti trade ministers sign cooperation agreement.” The Baghdad Post. February 21, 2019

[12] Rania El Gamal. “Iraq oil minister discusses energy cooperation with Qatar.” Reuters. May 5, 2019

[13] “Rouhani sees Iran, Iraq expanding trade despite U.S. sanctions.” Euro News. November 17, 2018

[14] “Iran, Iraq agree to scrap visa fees.” Tehran Times. March 13, 2019

[15] Haytham Mouzahem. “Saudi Wahhabi Sheikh Calls on Iraq’s Jihadists to Kill Shiites.” Al-Monitor. April 28, 2013

[16] ““They Are Not Our Brothers” Hate Speech by Saudi Officials. Human Rights Watch. September 26, 2017

[17] Lolwa Reda. “Egypt, Jordon, Iraq publish joined statement at end of tripartite summit.” Egypt Today. March 24, 2019

[18] Karzan Sulaivany. “Iraq not taking sides in Qatar dispute: Abadi.” Kurdistan24. June 7, 2017

Issue: Politics & Governance
Country: Iraq

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