How the US should approach the strategic dialogue with Iraq

Iraqi Prime Minister Mustafa al-Kadhimi uses his mobile phone at his office in Baghdad, Iraq May 9, 2020. Picture taken May 9, 2020. Iraqi Prime Minister Media Office/Handout via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY.

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After five months and two failed attempts, Iraq has a new prime minister. Mustafa al-Kadhimi’s appointment offers the country the prospect of some respite after months of political paralysis and mass social unrest since October 2019. The unrest has rocked the political class, and has been compounded by the COVID-19 pandemic, the dramatic decline in oil prices, and tensions between the U.S. and Iran.

Tensions between the U.S. and Iraq have simmered since America’s assassination of Iranian commander Qassem Soleimani and Iraqi commander Abu Mahdi al-Muhandis on Iraqi soil in January. The U.S. has become increasingly frustrated with Baghdad’s failure to control militia groups that answer to Iran, and Iran’s use of Iraq as a conduit to circumvent or mitigate the economic impact of Washington’s maximum pressure campaign. Washington upped the pressure on Iraq by reducing the duration of sanctions waivers that allow Iraq to import electricity from Iran. President Trump even threatened to impose sanctions on Baghdad and withhold access to Iraqi reserve funds if Iran’s proxies continue to attack U.S. forces with impunity.

Amidst these tensions, Washington and Baghdad have an opportunity to reset their relationship via a U.S.-Iraq strategic dialogue next month. Here is how the U.S. should approach it:

1Cultivate long-term relations with certain key components of the PMF, rather than ask Iraq to disband it altogether.

The Popular Mobilization Force (PMF) is a 100,000-strong umbrella militia organization. It is dominated and commanded by Iran’s proxies, but comprised of disparate factions — and its ascendance has frustrated Washington. The fight against ISIS brought a sense of unity and purpose to the PMF, but it is now in disarray following the withdrawal of factions aligned with Grand Ayatollah Ali al-Sistani, Iraq’s leading Shiite clergyman. Like Sistani, these groups have lamented that Iran’s proxies have effectively used the PMF as a front to further their own ambitions.

Their withdrawal presents an opening for the U.S. to cultivate closer ties to the Sistani-aligned factions. Washington should not ask Iraq to disband the PMF wholesale — a demand Baghdad couldn’t satisfy given the PMF’s power in Iraqi institutions and politics. Instead, Washington should work with the prime minister to provide direct military support and training to more preferred groups to help shift the balance of power in their favor. Providing these weapons should be conditional on not letting them end up in the hands of Iran-aligned factions and, critically, on them not being used against U.S. allies in the future. The now-open splits suggest that state-aligned PMF factions could be amenable to developing closer ties to outside actors like the U.S., either through direct bilateral engagements or indirectly through Kadhimi. Elevating and empowering them will provide Kadhimi with a much-needed buffer against Iran-aligned groups who would otherwise be too powerful to contain. The U.S. could help Kadhimi leverage divisions to re-balance the relationship between the state and Iran’s proxies.

2Don’t expect Baghdad to rein in Iran’s proxies (yet).

The good news for the U.S. is that Iran’s proxies have suffered a number of chinks in their armour since the protest movement emerged and since the assassination of Soleimani and al-Muhandis, which has resulted in a leadership void that has thrown Iran’s proxy network into disarray. Iran’s proxies have been implicated in the violence against protesters, which has diminished their social legitimacy and popular support. This could have a far-reaching impact, since their ascendancy is linked to their ability to attract popular support. The withdrawal of the Sistani factions from the PMF also diminishes the power of Iran-aligned factions.

However, the Iraqi armed forces are stretched and focused on containing the resurgence of ISIS and other militant groups, in addition to curtailing tribal and other local conflicts. Kadhimi, meanwhile, is still new and does not yet have a strong political base. At this point, attempting to rein in resource-rich and battle-hardened militias with strong backing from Iran will bring more costs than benefits to a war-fatigued country.

3Help Kadhimi on governance issues, but don’t try to rebuild the Iraqi state.

The U.S. has to come to terms with the reality that rebuilding Iraq’s institutions in the current environment would likely benefit Iran. Washington has traditionally preferred to play the long game, adopting a comprehensive approach to rebuilding Iraq’s institutions. But that poses difficulties in the current political environment, in light of Iran’s influence and the fact that Iraqi politicians must first get their own house in order — i.e. establish a consensus on critical and domestic foreign policy decisions, like whether they want the U.S. in the country.

Instead, Washington could focus on nearer-term opportunities. One possible win — which could ultimately help prop up the Iraqi economy and state-building projects in the longer-term — could be achieved within the Iraqi Ministry of Finance. It is led by a capable Iraqi technocrat and statesman, Ali Allawi, who appreciates the necessity of continued U.S. support. Washington should work to empower him, by helping to establish a modern banking and finance infrastructure, continuing to extend Iraq’s sanctions waiver, and enabling increased financial assistance from the International Monetary Fund and World Bank and help Iraq restructure its debts.

4Leverage the Kurdistan region…

The longer Kadhimi is able to keep his head above the water over the coming months, the greater his prospects of protecting U.S. interests. But he cannot do it alone. Baghdad has multiple centers of power that constrain his ability to forge and enforce policies, especially where these are at odds with the policies of the array of powerful political blocs and militia leaders.

Washington should work to enhance the political influence of the Kurds in Baghdad and the stability in the Kurdistan region, where the U.S. has a sizable presence. The U.S. should empower the Kurds on the assumption that it may have to one day withdraw from Iraq before it has secured key U.S. interests, after which it would need to turn to the Kurds to either relocate its forces to the Kurdistan region or use it as a conduit through which to secure vital U.S. interests in other parts of Iraq. In the nearer term, the U.S. can ensure the Kurdistan Regional Government does not succumb to its financial crisis and disputes with Baghdad. That will preserve and reinforce one of the very few cards the U.S. has in Baghdad.

5…and don’t ignore your friends. 

Since 2011, the U.S. has been its own worst enemy in Iraq. It has been a bystander as U.S.-aligned Arab Sunni factions have been marginalized and suppressed. Components of the Shiite political class, historically averse to closer ties with Iran, have had no choice but to embrace Tehran as it filled a void. In 2017, the U.S. opposed the Kurdish independence referendum but then stood by as Iran’s proxies, armed with U.S. weapons supplied to the Iraqi government, fought and defeated the Peshmerga in Kirkuk.

The U.S. and its allies do not have to agree on everything, but Washington should avoid steps that significantly weaken the standing of its allies or enable pathways for expanded influence of its rivals. Iran’s partners prosper because Tehran treats attacks on its allies as attacks on Iran, and mediates disputes between them. The U.S. should do the same for its own allies.

6Cultivate relationships with the next generation of Iraqi leaders.

Iraq’s current crop of political leaders largely lack a sense of purpose, unity, and urgency to address the country’s long-term challenges. The current government is effectively a transitional government, a crisis government with two key objectives: steer the country away from the abyss and hold elections that can restore its legitimacy.

Washington should focus — and encourage leaders in Baghdad to focus — on engaging and enabling the next generation of capable, reform-minded Iraqi leaders (including those who are currently in government and those who are engaged in grassroots politics). Opening opportunities for grassroots actors and encouraging the development of a reform-minded political class could help drive Iraq’s rival camps — that either want to maintain the existing political order or see it overhauled in its entirety — toward compromise.

The U.S.-Iraq strategic dialogue is part of a broader process aimed at settling a series of longstanding issues. But Iraq’s crises and structural challenges will outlast both the current Iraqi and U.S. administrations. Expectations should not be set too high, but as the above indicates, Washington does have options. It is possible to develop a mutually beneficial and functioning relationship, one that can also yield much needed reprieve and results for the Iraqi population.