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The Iraq Report: Iran sidesteps US sanctions via Iraq Open in fullscreen

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The Iraq Report: Iran sidesteps US sanctions via Iraq

Date of publication: 22 March, 2019

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This week's round-up of under-reported news from Iraq focuses on Iran's influence, water shortages and the ferry disaster in Mosul.
As unilateral economic sanctions by the United States begin to take their toll on the Iranian economy, Iranian President Hassan Rouhani made his first official trip to neighbouring Iraq to shore up support from Tehran's regional allies. 

Iraq has long been considered to be heavily influenced by Iran, and a tranche of trade and energy agreements between the two countries shows how Iranian products are able to dominate the domestic Iraqi market, triggering anger amongst Iraqi businessmen and farmers.

Meanwhile, Iraq's ongoing corruption crisis has led to severe water shortages in different regions across the country, leading many Iraqis to question how they lack basic services, jobs and economic opportunity while powerful politicians and their families live in opulent residences and are worth millions of dollars. 

This stark divide between the people and the political class that is supposed to represent them will only fuel the recurrent protest movements, and there is only so much violence the state and allied militias close to Iran can bring to bear before perhaps facing a popular revolt.

Iraq as Iran's back garden

Iranian President Hassan Rouhani has made his first visit to Iraq in a bid to ensure Baghdad continues to play ball by purchasing vast quantities of Tehran's energy, produce and other manufactured goods. This comes as the Iranian currency, the rial, has taken a substantial nosedive since US sanctions were restored last year.

After the US withdrew from the 2015 Iran nuclear deal in May last year, President Donald Trump announced that sanctions would be re-imposed on Iran in August of the same year. The Trump administration made it clear that anyone caught doing business with Iran would not be allowed to do business with the United States. However, Washington has issued several waivers to the terms of its sanctions regime for certain businesses and countries, including to Iraq.

Despite being one of the most energy-rich countries on the planet, Iraq is heavily reliant on its neighbour's gas, energy and agricultural products after more than 15 years of Iranian products flooding the weak and corrupt Iraqi market. 

As Washington is keen to keep Baghdad on good terms – particularly considering its desire to maintain a military presence there – Iraq was allowed to continue making purchases from Iran as long as these purchases were not made in US dollars. This waiver has been extended repeatedly, as recently as earlier this week.

The US has repeatedly stated that it wishes to wean Iraq off its reliance on Iranian products, and to help Baghdad restore and modernise its power grid as well as helping Iraq to utilise its own plentiful energy resources to become independent. Nevertheless, very few steps have been taken by the Trump administration in this regard, leaving Iran as the most influential power in the Green Zone.

Rouhani also visited Shi'ism's highest religious authority, Grand Ayatollah Ali Sistani, who had previously refused to meet with Rouhani's predecessor Mahmoud Ahmadinejad in 2013. 

Pictured in conversation with the Iraqi-based but Iranian-born cleric, Rouhani would have scored points with the Najaf Shia seminaries with this action who are, historically, rivals with the seminaries in Qom, Iran. This also shows a closer alignment between the two competing factions as, although he is Iranian, Sistani has made several proclamations against Iran-aligned militia groups in Iraq.

By visiting both powerful political and influential religious leaders in Iraq, Rouhani is perhaps showing that American sanctions against his country are working, and he is being forced to ensure all his ducks are in a row. While Supreme Leader Ali Khamenei holds ultimate authority in Iran, President Rouhani will be the one who will take the blame for the negative impacts of economic sanctions or any loss of influence.

After all, he made the now-failing nuclear deal a cornerstone of his election campaign to rehabilitate Iran in the international community, and the US withdrawal from the agreement has allowed hardliners in the regime to criticise Rouhani as being responsible for "weakening Iran's prestige" by negotiating with the US in the first place.

Water shortages triggers anger across Iraq

Corruption is once more under the spotlight as Iraqis blame officials for an ongoing water shortage crisis that has left many areas of Iraq parched for hours and sometimes days on end.

According to a report by The New Arab's Arabic-language service, Iraqis have blasted officials for allegedly defrauding the state while allowing infrastructure that is no longer fit for purpose to continue to be used to transport water to millions of homes. Some of the piping used to service water to citizens in the capital Baghdad is almost a century old and has been allowed to fall into disrepair.

The water shortages are particularly acute during the summer months where temperatures in Iraq can reach 50 degrees Celsius and are often accompanied by electricity outages that leave Iraqis without potable water to drink or power for air conditioning units. This has repeatedly caused tempers to flare with an epidemic of water-borne diseases triggering massive protests in Basra last summer.

Hassan al-Rubaie, a Baghdad municipal employee, told The New Arab that a large part of the problem was the old piping system that had decayed as well as the power shortages disabling the water pumping stations. 

"We have no permanent solutions, because [everything that is done] is designed to patch [the current system] up," Rubaie said.

As a municipal employee who works on water supply issues, Rubaie blamed corruption for the current state of affairs.

"Millions of dollars are spent of fake projects or on contracts that are fulfilled unprofessionally and all under the name of developing and updating our water network to provide potable water," Rubaie said. "There are political parties and personalities who are benefitting from the current state of affairs because there are many [fraudulent] development projects that attract vast amounts of money."

This comes as former Prime Minister Nouri al-Maliki has again come under scrutiny for corruption after documents leaked from an Iraqi Transparency Committee investigation shows his family saw a "massive increase" in their net worth over a short period of time. According to the investigation, his son-in-law alone is now worth $3.5 million and his daughter, Hawra al-Maliki, owns at least a kilogram of 21-carat gold in addition to two entire buildings in Baghdad and Karbala.

Maliki, who is very close to Iran, has been accused of running perhaps the most sectarian government in Iraq's post-Saddam history as well as one of the most corrupt. The legacy of his administration's alleged corruption is endemic power and water shortages, normal civil servants becoming extremely wealthy compared to their compatriots, and a "ghost soldiers" scandal revealed by then-Prime Minister Haidar al-Abadi in 2014, where soldiers who were not even serving were having their salaries cashed in by corrupt officers.

River ferry disaster kills 100 near Mosul

As Kurdish and Yazidi communities in Iraq welcomed Nowruz, the Persian New Year, on Thursday, tragedy befell some of those celebrating on a ferry on the Tigris River near the city of Mosul in northern Iraq.

Almost 100 people, mostly women and children, died after the ferry sank on the Tigris which had swollen after the winter rains and warmer spring weather melted ice caps which flowed into the river.

The passengers were travelling near Mosul to celebrate the first Nowruz celebrations in years since the Islamic State militant group had conquered the region in 2014. It has been dubbed one of Iraq's worst accidents in years, with Prime Minister Adel Abdul Mahdi promising to bring those responsible to justice.

A spokesman for Mosul's Civil Defence Authority, Husam Khalil, said that the ferry was over capacity when it capsized, with a large number of women and children on board who could not swim. This caused the death toll to rise as the victims drowned to death.

"It [the ferry] can normally carry 50 people. There were 250 on board before the incident," Khalil told Reuters.

This terrible tragedy highlights the dearth in policies to address public health and safety in Iraq.

Earlier this month, an unexploded bomb killed a 13-year-old girl in Mosul despite government promises to remove any ordnance left over from the battle for Iraq's second city, reclaimed from IS in 2017. Years on, and vulnerable people, including children, are still suffering from Baghdad's inability to ensure the country's towns, cities and the infrastructure that services them are safe.

The Iraq Report is a weekly feature at The New Arab.
Read the full series here or sign up to our mailing list on our front page

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