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Fast forward to the 2020s and Iraq’s streets are home to large-scale protests as the people of Iraq want to transition from years of instability and misery to defeat Iran’s web of influence that operates so brazenly.
Rampant corruption
Corruption in Iraq exists at all levels of the government and the country ranks near the bottom end of the Transparency International Corruption Perceptions Index. From 2003 through 2018, Iraq averaged as the 162nd most corrupt country out of 180.
Part of the corruption stems from beyond Iraq’s borders as the government has bowed to Iran’s influence which started in the 2000s and grew in scope and sophistication over the years. Iraqi politicians have fallen victim to Iranian pressure to the point where customs duties aren’t even enforced. One merchant in the southern city of Hilla said it is cheaper to smuggle in items from Iran and slap on a ‘Made in Iraq’ label.
“I feel like I am destroying the economy of Iraq,” the merchant was quoted as saying.
In fact, the country’s least corrupt period was in 2003, just before the American invasion. Once the invasion began, the country’s corruption levels began to climb reaching its peak following Iran’s entry. An Iraqi commission calculated the economic cost of corruption from 2003 to 2018 to be $320 billion.
Lack of foreign investment
Iraq has plenty of attractive natural resources that would have no problem attracting foreign investors. But a mix of the country’s conservative laws and its public sector is heavily influenced by Tehran and has kept lucrative foreign investment deals at bay.
In early 2018 when Iraq hoped to attract $88 billion from global investors, it managed just $30bn. According to Societe Generale, foreign direct investment inflow has been negative since 2013, reaching -$5B in 2017. Part of the reason could be linked to comments from Iraq’s government which states it is “no secret” Iran is running a “shadow government” in Baghdad. Also, wealthy Gulf nations are prevented from catalyzing essential and valuable projects in Iraq given their Iranian enemy’s overbearing presence.
At a time when Saudi Arabia is promoting its trillion-dollar Saudi Aramco oil behemoth to the world for public investment, Iraq has little chance of competing against its regional rivals when it has one hand tied behind its back by Iran’s influence. The last thing Iran wants is hundreds of billions of dollars flowing into Iraq at a time when it faces its own losses from new sanctions.
Abnormal subsidy rates
According to The Heritage Foundation’s 2019 index of Economic Freedom, Iraq is home to some of the world’s largest subsidy rates at around 40% of GDP yet its unemployment rate remains at 14%.
This is a direct result of corrupt Iraqi officials’ desire to prioritize Iranian industries over their own economic development. Iraq’s pro-sovereignty groups would make sure a government will establish a properly functioning labor market.
Leaked cables
In late 2019, hundreds of leaked intelligence reports obtained by The Intercept and shared with The New York Times offer a clear glimpse of the scope of Iran’s influence.
Iran dispatched a network of spies to infiltrate all aspects of Iraq’s political, economic, and religious life. Among the highest in the chain of command was the head of Iran’s former Quds Force commander, Qasem Soleimani. Iran’s desire to turn Iraq into a client state was fostered, in large part, by the Iraqi ruling elite’s acquiescence.
Leaked documents show an Iraqi military intelligence officer met with an Iranian intel chief in 2014 saying, “All of the Iraqi Army’s intelligence — consider it yours.”
Much like Iran’s sphere of influence elsewhere in the region, such as in Southern Lebanon through its Hezbollah proxy, Iran has shown zero interest in improving the lives of people and only seeks to entrench its military machine into host countries.
Iran is more than capable of using its influence in Iraq for good and improve the lives of its people and infrastructure, yet Tehran has clearly opined that doing so would strengthen Iraq and pose a threat to Iranian hegemony.
However, as the Iraqi people become more and more dismayed by their government’s capitulation to Iranian expansion, viable opposition movements that reject Tehran and its Iraqi puppets are beginning to emerge. The National Independent Iraqi Front, made up of both Sunni and Shi’a leaders, and Sovereignty Alliance for Iraq (SAI) are surging in popularity and indicates that Iraqi disdain for Iran is not divided along ethnic Sunni-Shi’a lines. Ammar al-Hakim, once viciously pursued by Saddam’s regime and who even took refuge in Iran, has formed the National Wisdom Council to unite his country under an anti-sectarian message to push back against Tehran.
The main question now is if the Trump administration and the international community, will work to ensure that Iraq becomes a sovereign – and viable – state, free from foreign interference.
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