Dispatch: What a U.S.-Iran War Would Mean for Iraqis

Here in Iraq, fears are mounting over the potential for open military conflict between the U.S. and Iran, as rhetoric intensifies and confusing reports spread of military aircraft carrier deployments, disputed attacks on oil tankers, and U.S. orders for non-essential personnel to leave Iraq. The consequences for Iraq would be manifold, physical security of course being at the top of list. Even as President Donald Trump, Secretary of State Mike Pompeo, and Iranian Supreme Leader Ayatollah Ali Khamenei say they aren’t seeking or planning for war, Pompeo visited Iraqi Prime Minister Adel Abdul-Mahdi and President Barham Salih in Baghdad last week to discuss issues including the protection of Americans in Iraq and electricity dependence on neighboring Iran.

As tensions escalate, U.S. decision-makers have a range of considerations to take into account. Iraqis hope that among them will be the multiple points of leverage that Iran can wield on its neighbor. Without significant U.S. economic support and continued military backing for the Iraqi state and its people, their pro-American leaders – Arab and Kurd – stand to lose much of the power they currently possess, finding their authority and influence deeply crippled by Tehran.

This would be an egregious setback for the interests of not only Iraq, but America as well. A recent nationwide poll of Iraqis published this month by the Akkad Center for Strategic Affairs and Future Studies, a Baghdad-based NGO, showed that 60 percent want the U.S. to be the country’s principal political and economic partner, with just 8 percent favoring Iran. Iraq is forecast to be the world’s third-largest oil producer by 2030, and sits squarely in a region still vital to U.S. national security interests, from great power rivalry to terrorist threats, as exemplified by the repeated investment of American lives and military spending to thwart al-Qaeda and then ISIS. So Washington should be devising substantive, cost-effective means of limiting anticipated blows to the Iraqi populace of any stepped-up confrontation with Iran.

Physical Security Challenges

The physical security of all Iraqis, regardless of ethnicity or sect, would be gravely compromised by any outbreak of military conflict between the U.S. and Iran. Tehran would almost assuredly order Shi’a militias that comprise much of Iraq’s paramilitary Popular Mobilization Forces (PMF) to attack and sabotage indigenous entities and actors deemed pro-American. As direct and collateral damage grows, so would community and religious strife.

The anxiety is palpable in Sulaymaniyah, the Kurdistan Region of Iraq’s (KRI) second-largest city, situated approximately 50 miles from the Iranian border. Politicians, civil society leaders, and academics with whom we’ve spoken share the growing apprehension that eastern KRI could become a battlefield, should Iranian forces invade in response to a U.S. bombing campaign. From the Shah’s monarchy through to the Islamic Republic, Iran has unwaveringly invested in cultivating influence here in order to keep a firm hand in regional politics, as well as monitor – and at times attack — Iranian-Kurdish rebel forces based here.

Open conflict between the U.S. and Iran would compel Kurdish Peshmerga that have been fighting ISIS in Syria and its remnants in western Iraq to withdraw to the relative safety of the KRI. Their departure, coupled with the inevitable reorientation of U.S. military deployed in Iraq to deal with Iranian threats, risks creating openings for radicalization and renewed insurgency here and in Syria.

An Iranian Scarcity Offensive

Iran could further inflict significant pain throughout Iraq via a multi-vector scarcity campaign. Forcing heavy burdens on Iraqis nationwide, Iran could tighten its grip on choke points in agriculture, energy, and the economy.

Iraq’s agricultural sector is in dire straits. Years of war, economic malaise, poor policy planning, and drought have left Iraqi food security vulnerable. According the U.N. Food and Agriculture Organization, Iraq produced only $1.5 billion of its food needs in 2016 while importing $7.1 billion, with significant amounts coming from Iran and Turkey.

Responding to Iranian state subsidies that encouraged malign intervention by export, Its agricultural industry has been dumping foodstuffs on the Iraqi market, thereby running local farmers out of the competition; the Iranian rial’s decline in value over the past year exacerbates the effect. For example: Iranian imports recently overtook Iraqi produce in densely populated Basra, where Iranian tomatoes went for the equivalent of 40 U.S. cents a kilo compared with an Iraqi kilo at $1.20. Combine price gouging with Iran’s position as a top food exporter, and war would generate a painful supply deficit for Iraqis and a tremendous opportunity for Iranian black marketeers.

Iraq is heavily dependent on Iran for its rapidly growing energy demands, too. Of the 18,000-megawatt output by Iraq’s power grid, 4,000 megawatts rely on Iranian gas and electricity. Following an agreement penned in April, Iranian exports will increase to one-quarter of the grid’s total supply by June 2019. This deal was an unavoidable step taken to meet Iraqis’ demands, lest there be a repeat of the social unrest that rocked oil-producing Basra last year, when the Iranian government turned off one its main power lines Baghdad’s quiet efforts to variegate its energy sources and overdue payments.

While potential projects such as a touted solar power plant in northern Saudi Arabia would reduce Iraq’s exposure to Iran, the plans remain only on the horizon. Moreover, given Tehran’s aggressive retaliatory measures against Baghdad for seeking energy diversification through Saudi Arabia, alternative sources will need to be fully operational to effectively safeguard Iraq’s power grid.

Finally, Iran continues exerting a heavy hand in Iraq’s economy. Many Iraqis are indebted to Iranian-backed banks for car purchases. In the event of war, imports of Iranian-manufactured building supplies vital to post-ISIS reconstruction are likely to stop along with the foodstuffs. The combination of shuttered supply routes and U.S. sanctions would diminish access to capital and the availability of basic goods.

At the same time, Iran is sure to continue its efforts to reconfigure Iraq’s economic playing field by replicating the paramilitary-commercial behemoths it created in its own Basij militia or in Lebanon’s Hezbollah. Funds permitting, such entities established within pro-Iranian factions of the PMF can build clientele relationships generating allegiance and public support for the regime in Tehran.

Empowering the Iraqi People and Government in Wartime

Although scarcity in wartime is unavoidable, the U.S. can take concrete steps to lessen the impact on its Iraqi partners and their people. Recent deals to increase wheat and rice exports from the U.S. represent one step in the right direction; other essential imported foodstuffs include chicken, eggs, and sugar. Supplementary food supplies coordinated with Ankara would provide an opportunity for cooperation between those two powers during a time of tense U.S.-Turkey relations, as well as a boost for the latter’s contracting economy.

Protecting Iraqi energy production and supply will require significant U.S. engagement. Energy diversification from Iranian sources Iraq is urgent. The prospect of renewable energy coming from the Arabian Peninsula is encouraging but is unlikely to materialize in time, much less without Washington’s political pressure on the Saudis to expedite the process. Meanwhile, especially useful would be targeted technical assistance to upgrade Iraq’s electricity infrastructure, which currently loses 60 percent of its power in transmission, according to the International Energy Agency. In the advent of war, Iraq’s oil production and water-borne transport facilities might be targeted, and so would require significant U.S. military cover. Given that Iraqi oil revenue approaches 50 percent of its GDP, with an estimated 80 percent to 90 percent transiting through the Persian Gulf, the country can ill-afford damage or blockage.

Finally, the U.S. in concert with its European and Gulf allies can help fill any potential capital deficit via a mix of loans and grants through Iraq’s central bank. Given its increasing oil production and gradually developing economy, Iraq’s sovereign credit rating is stable, according to S&P.

The U.S. investment in Iraq is formidable, to say the least. It would be tested by any war with Iran. The security of this investment demands U.S. support for the Iraqi people when and wherever possible.

IMAGE: Electrical wires crisscross through the air around a minaret in the disputed city of Kirkuk in northern Iraq in 2015.  (Photo by Reza/Getty Images)

 

About the Author(s)

Rahman Al-Jebouri

Senior Fellow at the Institute of Regional and International Studies at the American University of Iraq-Sulaimani, and President of the Political Leadership and Governance Development Academy.

Richard Kraemer

President of the US-Europe Alliance and Eurasia Program fellow at the Foreign Policy Research Institute. Follow him on Twitter (@RichardKraemer7)