[size=39]Iran’s Economic Leverage in Iraq[/size]
- [You must be registered and logged in to see this link.]
Its economic future in question, Tehran is looking to maintain and increase its influence in Iraq by investing in schemes and projects linked with loyal paramilitary forces.
- May 23, 2018
- [You must be registered and logged in to see this link.]
Comments (+)
Tehran has stepped up its efforts to compensate for losses in revenue by stepping up economic cooperation with Iraq since the Kurdish independence referendum in September 2017, when Iran [You must be registered and logged in to see this link.] border crossings with the Kurdistan Region of Iraq (KRI). According to the Iran Trade Promotion Organization, the total value of Iranian non-oil exports to Iraq grew [You must be registered and logged in to see this link.] in the first seven months of Persian year 1396 (March 21, 2017 – March 20, 2018) compared to the same months the previous year. However, following the Kurdish referendum, the year-on-year growth dropped to [You must be registered and logged in to see this link.] by the end of the first ten months of 1396 (corresponding to mid-January 2018).
The U.S. withdrawal from the JCPOA on May 8, which will likely decrease Iran’s revenues from crude oil exports and foreign trade, pushes Tehran not only to compensate for its trade losses through the KRI but also to further project economic influence in Iraq and beyond in war-ridden Syria, Iran’s geostrategically indispensable ally. Iran’s backbone of the non-oil economy, its domestic [You must be registered and logged in to see this link.], will likely stagnate again under sanctions and have knock-on effects on an array of linked non-oil industries, from cement and steel to petrochemicals. Stagnant domestic consumption will push Iran to scale up non-oil exports, where neighboring and allying countries like Iraq and Syria will be top priorities.
One way Iran has been trying to increase its economic role in Iraq is through funding efforts for reconstruction in which its non-oil industries could play an important role. Iranian Foreign Minister Mohamed Javad Zarif [You must be registered and logged in to see this link.] a delegation to the Kuwait International Conference for the Reconstruction of Iraq, held on February 12-13. Although Zarif’s delegation did not pledge aid at the time, Iran’s Vice President, Eshaq Jahangiri, pledged a [You must be registered and logged in to see this link.] credit line to Iraq’s reconstruction during a visit to Baghdad on March 7. The amount [You must be registered and logged in to see this link.] of what Turkey pledged at the Kuwait conference but surpasses what Saudi Arabia promised. Subsequently, Iran’s Defense Minister, Amir Hatami, [You must be registered and logged in to see this link.] his counterpart in Baghdad on April 18 for the first Joint Defense Cooperation Commission, [You must be registered and logged in to see this link.] that it is Iran’s responsibility to take part in Iraq’s reconstruction. However, due to its own difficult financial situation—likely to worsen under renewed sanctions—Iran is likely unable to afford funding substantial reconstruction projects in Iraq. Because of this, the Iranian leadership is perhaps relying on offering loans instead of grants, hoping that Iraq’s own debt burdens will dissuade Baghdad taking Tehran up on them.
Furthermore, Tehran is also seeking to spend on economic schemes that can sustain Iranian leverage in Iraq by helping to establish economic foundations—and develop existing welfare programs—linked with loyal paramilitary forces within the Popular Mobilization Units (PMU), such as Asaib Ahl al-Haq (AAH) and Harakat Hezbollah al-Nujaba. By doing so, Tehran hopes to replicate the experience of the Basij, the volunteer paramilitary arm of the IRGC, who were heavily involved in domestic reconstruction after the Iran-Iraq war through the notorious Jihad-e Sazandegi organization. The Basij, upon which Iraq’s PMU is [You must be registered and logged in to see this link.]modelled, has an important economic component that makes it more self-sufficient and therefore also more resilient to the U.S.-dominated global economic system.
Iran has already tried to replicate the Basij model in Lebanon, where generous Iranian funding in 1988 allowed Hezbollah to [You must be registered and logged in to see this link.] the Jihad al-Bina organization, which aims to provide developmental assistance and further Iranian soft power. Similar to Hezbollah’s experience, Iran-backed paramilitary forces had already established small foundations in Iraq, notably AAH’s [You must be registered and logged in to see this link.], which provides assistance to the families of AAH members killed in battle. In Lebanon, such entities have reinforced local dependencies by further cultivating clientelistic networks, but their scope has been limited by the country’s relative lack of economic opportunities. In oil-rich Iraq, these foundations might be sub-contracted by state agencies to accomplish projects, which will boost their size and capabilities. For instance, while they currently focus on welfare services such as building schools and running clinics, with Iranian backing and access to Iraq’s banking system, they could expand into more sophisticated projects such as building bridges and repairing electricity and water services. And while local differences matter, since the IRGC successfully replicated the organizational aspect of an Iranian security model it could also easily replicate its affiliated economic model.
In the long run, Iran probably hopes that Iraq’s “high economic potential” given its oil resources, cultural significance, and need for reconstruction will allow Iranian organizations to channel soft power by lending their technical expertise to expand the economic involvement of such [You must be registered and logged in to see this link.], which would therefore be more competitive than other organizations. Iran hopes that because of Iraq’s poor governance these entities would have more sway to influence economic policy in favor of Iranian exporters and investors over other international companies, against whom Iranian firms do not currently effectively compete in the market.
[You must be registered and logged in to see this link.] to Hamid Hosseini, the head of the Iran–Iraq Joint Chamber of Commerce, Iran aspires to increase its non-oil exports to Iraq to around $15 billion within the next two years, up from the current $10 billion. Yet in addition to bilateral [You must be registered and logged in to see this link.] problems stemming from limited access to third-party currencies such as the dollar, Iranian exports to Iraq face high tariffs and quotas. Iranian trade officials often imply that the trade policies that currently limit exports to Iraq are beyond Iran’s influence because Iraqi state institutions and ministries are [You must be registered and logged in to see this link.] so many divergent political parties that influencing any policies requires having ties with a wide range of actors.
Loosely incorporating these foundations or entities into the state structure, for example under a government-supported reconstruction umbrella for independent Iraqi foundations, may encourage the Iraqi government to open the door to Iraqi auxiliary economic entities, of which many will be linked to Tehran, to facilitate their ability to contribute to reconstruction. With pressure from the Iran-backed paramilitary actors, this could include reducing tariffs on importing construction materials from Iran or, more importantly, employing Iranian engineering services. This would boost [You must be registered and logged in to see this link.] and exports to the Iraqi market and open up further opportunities for IRGC and Basij-linked foundations and firms to play a pivotal advisory role to their sister Iraqi entities, boosting Iran’s non-military influence in the country.
Iran’s efforts to gradually re-shape the institutional sphere increasingly includes endowing loyal political and security actors with new economic powers. Greater leverage for Tehran-linked paramilitary forces in the Iraqi parliament and government may allow this to develop further.
[You must be registered and logged in to see this link.]
Today at 5:11 pm by Rocky
» Sudanese advisor criticizes Kuwaiti analyzes regarding the development road project
Today at 2:21 pm by Rocky
» Al-Mandalawi stresses the need to strengthen economic and trade cooperation between Iraq and Poland
Today at 2:04 pm by Rocky
» Power maneuvers: America provides defensive weapons to Kurdistan in exchange for withholding from Ba
Today at 10:26 am by Rocky
» Kuwait is drilling an oil well near Umm Qasr, towards Iraqi territory
Today at 10:24 am by Rocky
» In the document... the first Iraqi ministry identifies the obstacles to changing the new official wo
Today at 10:22 am by Rocky
» Italian Institute: Iraq is stuck in its own crises, including Baghdad’s efforts to undermine the “au
Today at 10:21 am by Rocky
» The head of the Integrity Commission announces the holding of an international Interpol conference i
Today at 10:18 am by Rocky
» Planning: Iraqi companies are not efficient in conducting the population census
Today at 10:14 am by Rocky
» utube MM&C 4/24/24 Support - USA- Turkey - Timing- Currency Value - Tabled
Today at 8:08 am by Rocky
» MM&C 4/25/24 National Bank of Iraq goes live with Temenos core banking and payments
Today at 8:06 am by Rocky
» A banking official indicates a "danger" to Iraq by depriving more than half of its banks of dollars
Today at 7:55 am by Rocky
» With the participation of the Association of Private Banks, investment opportunities are on the tabl
Today at 7:45 am by Rocky
» Within a month... an Iranian border crossing recorded a noticeable increase in exports of goods to I
Today at 7:44 am by Rocky
» The Association of Private Banks appreciates the efforts of the government and the Central Bank to c
Today at 7:43 am by Rocky
» Al-Maliki's coalition presents a third candidate for the position of governor of Diyala
Today at 6:57 am by Rocky
» Arab gathering: The Kirkuk problem is getting complicated and the Sudanese must intervene
Today at 6:56 am by Rocky
» Next week.. a Kurdish delegation will visit Baghdad to meet with the Minister of Finance
Today at 6:54 am by Rocky
» Under the pretext of salaries... Al-Party refrains from handing over port revenues to Baghdad
Today at 6:53 am by Rocky
» Association of Banks: For the first time, we are witnessing a clear targeting of depriving half of t
Today at 6:51 am by Rocky
» Parliament does not know the reason for the delay in sending the 2024 budget schedules: Voting takes
Today at 6:49 am by Rocky
» Applicants for the 2024 Hajj are demanding that the Central Bank secure the dollar for them through
Today at 5:09 am by Rocky
» Governmental and private banks will showcase their services tomorrow during Financial Inclusion Week
Today at 5:08 am by Rocky
» Iraq's oil exports rise despite OPEC+ cuts
Today at 5:06 am by Rocky
» A study explodes a "surprise"... Iraq is among the countries that export oil to "Israel": How is the
Today at 5:04 am by Rocky
» Al-Araji emphasizes working to strengthen national identity
Today at 5:02 am by Rocky
» Al-Sudani visits Saudi Arabia to participate in the World Economic Forum in Riyadh
Today at 5:01 am by Rocky
» Iraq is talking about producing one million additional liters of gasoline
Today at 4:59 am by Rocky
» The Council of Ministers approves the implementation of the Baghdad Metro project
Today at 4:56 am by Rocky
» Minister of Commerce: We formed a joint economic committee with Türkiye
Today at 4:55 am by Rocky
» Resources: Government measures have contributed to improving the water situation in Iraq
Today at 4:53 am by Rocky
» Parliamentary Finance: Baghdad will continue to send salaries to the region’s employees until settle
Today at 4:51 am by Rocky
» A parliamentarian describes the corruption of Iraqi ports as “ghouls” and reveals the involvement of
Today at 4:49 am by Rocky
» Obelisk Hour: Basra is the subject of political conflict and ambiguity over the fate of the funds al
Today at 4:48 am by Rocky
» Turkmen leader: An agreement on the local government of Kirkuk is near
Today at 4:45 am by Rocky
» Anbar calls for the operation of its factories despite financial obstacles
Today at 4:44 am by Rocky
» Turki: The crisis of the Presidency of Parliament prompted the Sunnis to amend the Council’s interna
Today at 4:43 am by Rocky
» The Agriculture Committee confirms the existence of Iraqi-Turkish-Iranian discussions on water
Today at 4:42 am by Rocky
» Resources diagnose the challenges facing the water file in Iraq
Today at 4:38 am by Rocky
» Parliament pledges to the Interior Ministry: We will transfer money to buy weapons from citizens
Today at 4:33 am by Rocky
» Al-Issawi is the closest.. Parliament sets the date for deciding the choice of the new president
Today at 4:31 am by Rocky
» Deputy: Iraq's investments have risen and need a comprehensive review of previous years
Today at 4:30 am by Rocky
» Iraqis consume 7 billion eggs annually and import about $900 million
Today at 4:28 am by Rocky
» The Iranian role complicates attempts at open cooperation between Iraq and Turkey. Turkey is trying
Today at 4:26 am by Rocky
» Move in Iran to obtain $242 billion from Iraq in compensation for the eight-year war
Today at 4:25 am by Rocky
» 12 decisions from the Council of Ministers regarding the Baghdad Metro and Najaf-Karbala train proje
Today at 4:23 am by Rocky
» Sudanese Advisor: The path to development has begun... the Baka and the militias “we silence them wi
Today at 4:21 am by Rocky
» Not from Kurdistan.. How did Iraq become a source of oil for “Israeli tanks”?
Today at 4:19 am by Rocky
» Parliamentary Agriculture criticizes the Sudanese and Erdogan agreement: Türkiye will control water
Today at 4:16 am by Rocky
» The Iraqi government issues new decisions
Yesterday at 2:35 pm by Rocky
» The story of “reduced oil” to Jordan, from “compulsion” to mutual benefit.. Is there a loss?
Yesterday at 2:33 pm by Rocky
» The Council of Ministers takes 12 decisions for the Baghdad Metro and the Najaf-Karbala train
Yesterday at 2:32 pm by Rocky
» utube MM&C 4/23/24 Iraqi Dinar - IQD Update - Development Road Project - Saviour of Global Banking
Yesterday at 10:18 am by Rocky
» Kidney from pig transplanted into deathly ill New Jersey woman — and begins working almost immediat
Yesterday at 10:15 am by Bama Diva
» The most difficult option.. Warnings of the danger of floating the Iraqi dinar without achieving an
Yesterday at 9:48 am by Rocky
» Trade from the “Economic Committee” with Türkiye: It will overcome all obstacles facing the traders
Yesterday at 9:46 am by Rocky
» Washington's hope for stable relations with Baghdad clashes with Iraqi parties' rejection of the Ame
Yesterday at 9:41 am by Rocky
» Karim Badr: Development is America’s will to kill silk
Yesterday at 9:36 am by Rocky
» Oil: Opening of a new port for liquid gas for vehicles in Baghdad
Yesterday at 9:33 am by Rocky
» A media advisor warns of corruption in a draft law on the Parliament’s agenda
Yesterday at 9:21 am by Rocky
» Economist: There is serious work to lift US sanctions on Iraqi banks
Yesterday at 9:16 am by Rocky
» Will the agreements signed with the US Treasury reflect positively on the exchange rates?
Yesterday at 7:52 am by Rocky
» Iraq continues its quest to join the World Trade Organization
Yesterday at 7:51 am by Rocky
» Iraq completes the completion of the files for the initial offer of goods and services to join the W
Yesterday at 7:50 am by Rocky
» Economist: Travelers' dollars are leaking into the parallel market...and this is what the Central Ba
Yesterday at 7:32 am by Rocky
» President of the Federal Court: It is not permissible to force anyone to join any party, and the pol
Yesterday at 7:30 am by Rocky
» The Council of Ministers holds its session headed by Al-Sudani
Yesterday at 7:27 am by Rocky
» America weakens Baghdad...and increases Kurdistan's military capabilities
Yesterday at 7:26 am by Rocky
» The Iraqi government plans to build 10,000 schools throughout the country
Yesterday at 7:23 am by Rocky
» American threats close the Iraqi Stock Exchange at a loss
Yesterday at 7:21 am by Rocky
» Increase in external transfers at the Central Bank
Yesterday at 7:20 am by Rocky
» Al-Maliki calls on Britain to cancel restrictions on the entry of its companies into Iraq
Yesterday at 7:18 am by Rocky
» Planning and the European Union are discussing signing a number of agreements in the development, en
Yesterday at 7:16 am by Rocky
» Parliament talks about the mechanism for recovering smuggled funds and hints at the next stage
Yesterday at 7:13 am by Rocky
» Interior Ministry: The number of completed national cards reached 37 million cards
Yesterday at 7:06 am by Rocky
» Amnesty International: Violations of freedom and human rights continue in Iraq and the Kurdistan Reg
Yesterday at 7:04 am by Rocky
» Parliamentary Oil: The government is proceeding with the decision to raise the price of improved gas
Yesterday at 7:03 am by Rocky
» A parliamentary committee in Basra to investigate violations of the port company and the local gover
Yesterday at 7:00 am by Rocky
» Revealing the 10 most important American exports to Iraq
Yesterday at 5:31 am by Rocky
» A noticeable increase in the rate of Iraq's import of Chinese cooling devices
Yesterday at 5:30 am by Rocky
» Prime Minister: Working on projects without completing the infrastructure is a waste of money
Yesterday at 5:28 am by Rocky
» Iraq.. Extending the deadline for registration procedures on plots of land
Yesterday at 5:27 am by Rocky
» What is the main purpose of conducting the population census in Iraq?
Yesterday at 5:25 am by Rocky
» A plan to transform Iraq from a barren land to green with 5 million trees
Yesterday at 5:24 am by Rocky
» The Housing Fund announces the acceptance of more than 11 thousand loans through the Ur platform
Yesterday at 5:23 am by Rocky
» The Bank of Baghdad is moving to increase its capital to 400 billion dinars
Yesterday at 5:20 am by Rocky
» The electronic payment system will soon be adopted on Iraqi buses
Yesterday at 5:19 am by Rocky
» “It threatens our interests and destroys our economy.” An Iraqi project “irritates” the Kuwaiti stre
Yesterday at 5:18 am by Rocky
» Warning from the Central Bank about “misuse of electronic payment cards”
Yesterday at 5:17 am by Rocky
» Iraq and the Sultanate of Oman are discussing sending capacities through the Gulf countries
Yesterday at 5:16 am by Rocky
» The fact that a decision was issued to deport Syrian workers from Iraq
Yesterday at 5:14 am by Rocky
» Rice comes first... America exports 10 foodstuffs worth more than 350 million dollars to Iraq
Yesterday at 5:14 am by Rocky
» A sixth licensing round for gas exploration
Yesterday at 5:12 am by Rocky
» Baghdad is preparing to host the 50th session of the Arab Labor Conference
Yesterday at 5:11 am by Rocky
» Scientific symposium on the future vision of the tripartite budget
Yesterday at 5:09 am by Rocky
» Five conversion power stations enter service in Najaf
Yesterday at 5:08 am by Rocky
» Planning: Conduct a population census next November
Yesterday at 5:07 am by Rocky
» Experts: Spreading misleading information harms development and investment
Yesterday at 5:03 am by Rocky
» Economists call for tightening money laundering laws and port controls
Yesterday at 5:02 am by Rocky