Iraq’s new prime minister faces a host of challenges. Coronavirus is just one of them

Iraq is threatened by multiple crises, each of which is capable of destabilising the country. The most immediate dangers are twofold: a resurgence in the coronavirus pandemic and the collapse in the oil revenues on which Baghdad relies to pay all its bills. In addition, Isis attacks have increased and, though much less deadly than the savage onslaughts of the past, they are enough to make Iraqis fear that there is worse to come.

An even greater threat to Iraq is that it will continue to be the political and military battlefield where the US and Iran fight out their differences. This confrontation came close to turning into a shooting war in January when the US assassinated the Iranian general Qasem Soleimani at Baghdad International Airport and Iran fired ground-to-ground missiles into US bases in Iraq in retaliation. The pandemic has muted this conflict for the last few months, but it has not gone away and will inevitably flare up again.

“The Iraqi government must try to fill the power vacuum inside the country,” a former Iraqi official tells The Independent. “Otherwise it will be filled by the US and Iran along with their local proxies and allies.” He sees the most important challenge facing the newly installed government of prime minister Mustafa al-Kadhimi to assert its control over the state machinery and, above all, over the Iran-aligned Shia paramilitary forces of Hashd al-Shaabi.

Mr Kadhimi was confirmed as prime minister in May when Iraq was already being hit by the spread of the pandemic, which is particularly difficult to resist in a country where the health service has been degraded by 40 years of conflict and under-resourcing. The World Health Organisation says that Iraq, despite its great oil wealth, spent just $161 (£128) per head annually on its health service over the last decade compared to $304 in Jordan and $649 in Lebanon.

Fragmentation of power is at the root of Iraq’s problems. Ministries are the cash cows and source of jobs for whatever political party controls them. The state apparatus has become a looting machine for the benefit of those in charge of it. But pervasive corruption is almost impossible to restrict, let alone eradicate, because millions of Iraqis, not just those at the top, benefit from a vast patronage network.

Mr Kadhimi is discovering how risky it is to tinker with this system. He had to retreat from an early bid to cut some benefits which the state can no longer afford. He cites the cases of 33,000 Iraqis paid monthly salaries by the Iraqi government because they became refugees in Saudi Arabia after Saddam Hussein crushed the Shia uprising in southern Iraq in 1991. Thirty years later, most of the former refugees live outside Iraq, mostly in the US, but they still get paid by the Shia-dominated government in Baghdad that has ruled Iraq since the overthrow of Saddam by Washington in 2003.

Government largesse has depended on high oil revenues and expanding oil output, but both have been drastically cut by falling oil prices and Iraq’s reduced quota as part of the agreement by Opec countries to restrict supply. Kamran Karadaghi, an Iraqi commentator and former chief of staff to the presidency, says that pensions are late but are still being paid, though he wonders how long this can go on. Hiwa Osman, a commentator speaking from the Kurdish capital of Erbil, says that “we are facing a near-collapse of the financial system which is worse in Kurdistan, but is affecting the whole country”. A danger for Mr Kadhimi is that oil revenue provides an essential glue to hold the Iraqi state together, even though its distribution is corrupt and unfair.

The economic prospects for Iraq may be dire, but Mr Kadhimi does hold some strong cards. As the former head of the Iraqi intelligence service, he knows the system well. A Shia by religion, his political background is broadly secular, but he has crucial backing from Grand Ayatollah Ali Sistani, who exercises vast influence over the Iraqi Shia who make up two-thirds of the population.

Though Mr Kadhimi is seen as close to the US, Iran did not oppose his appointment as prime minister. For all the very real animosity between them, Washington and Tehran both need to maintain the post-Saddam political settlement in Iraq. They do not want to see the country descend into chaos which would encourage the return of Isis and al Qaeda-type movements. Now that Isis, the self-declared caliphate that once sprawled across northern Iraq and Syria, has been eliminated, it is unlikely to effect a full resurgence. The Sunni Arab community in which Isis is rooted has been shattered by the movement’s defeat and does not want another doomed uprising. But this does not mean that Isis will eschew a guerrilla war of pinprick attacks on rural areas. It is no longer launching the vehicle bombings that used to devastate Baghdad, but this may be a matter of tactics rather than a lack of capacity.

Iraq needs certainty in its relations with the US and Iran, but this has proved elusive since the fall of Saddam. The sources of friction are still there. US bases are vulnerable to intermittent mortar attacks by Iran-aligned Shia paramilitaries. The US is reducing its military personnel in Iraq from 5,200 to perhaps half that number, but Washington’s most important military asset in Iraq and Syria is its air power, without which Isis would be much freer to operate.

Iran is being battered by US sanctions, the Covid-19 epidemic and the aftermath of the killing of Soleimani as its effective viceroy in Iraq, Syria, Lebanon and beyond. His replacement as Islamic Revolutionary Guard Corps (IRGC) commander in Iraq, Esmael Ghani, has had to apply for a visa to enter the country – something unheard of when Soleimani was in charge. He was also reported to have handed out silver rings as presents rather than the more usual cash to Iranian-influenced paramilitary leaders, a sign of Iran’s strained finances.

However, this apparent waning of Iranian influence in Iraq may not be quite as extensive as it seems. “Iran has not lost any of its main assets in Iraq,” says the former Iraqi government official. He adds, though this is contested by others, that the IRGC no longer wholly controls Iran’s policy in Iraq since Soleimani’s killing. This may be a recognition by Tehran that the bloody campaign by Iranian-backed paramilitaries against Shia protesters seeking jobs and reforms that began last October, and which Soleimani oversaw, had proved counter-productive, with 500 demonstrators killed and more than 15,000 injured.

The outcome of the repression was a wave of anti-Iranian feeling in the Shia community which had previously seen Tehran as a long-term protector. “I told them that the state of Iran should not rely on thugs,” says the former Iraqi official, describing an encounter with important Iranian figures in the Gulf last December. “They told me the protests were organised by the Americans and Saudi Arabia. I explained to them that when Iraqis see criminals close to Iran driving around in four-wheel drive vehicles, they hate you.”

Mr Kadhimi will have to confront or dodge around the numerous power centres in Iraq that make its politics such a minefield. But he does have one advantage: the pandemic and resultant economic disaster are damaging to Iraq, but they are also hitting the countries that have traditionally interfered in its affairs and heaped disastrous consequences on Iraqis – and usually on themselves as well. He may have a little room for manoeuvre.