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Regional Consequences of Saudi Arabia’s New Approach toward Iraq

Up until late 2014, Saudi Arabia viewed Iraq’s Shia-dominated government as an ally of its regional rival, Iran. Saudis had strongly opposed the U.S. 2003 invasion, which removed Saddam Hussein’s Baath regime and led to the empowerment of the Shias. For twelve years (2003-2015) the Saudi government funded Sunni parties and armed the Sunni militant groups that engaged in violent campaigns against Shia targets in the context of Iraq’s sectarian violence. This strategy was not successful and since the Shiites account for 64% of Iraq’s population, their majority-hold on Iraq’s government continued.

After a shift in political alliances among the Shia groups, which led to the emergence of Haidar al-Abadi as Iraq’s prime minister in 2014, Saudi government sensed that the there was an opportunity to initiate contacts with al-Abadi and some Shia groups that were concerned about Iran’s influence. Consequently, in a major shift, Saudi Arabia re-established diplomatic ties with Iraq in January 2016, after more than three decades.

Prime Minister al-Abadi and the influential Shia cleric, Moqtada Al-Sadr, welcomed this rapprochement. Al-Sadr, whose supporters currently make up the largest block in Iraq’s parliament, visited Saudi Arabia in 2017, as did the prime minister. These visits played an important role in the improvement of Saudi-Iraq relations.

Saudi Perspective: These developments represent a significant shift in Saudi Arabia’s attitude toward Iraq, under the leadership of King Salman (who started his rule in 2015) and his controversial son, Crown Prince Mohammed bin Salman, who plays an important role in the Kingdom’s defense and foreign policy. While Saudi Arabia’s hostility toward Iran and Iranian influence has not diminished, this change is part of a strategic shift in Saudi government’s approach to Shia dominated countries, Shia minorities in the Arab world and its own Shia minority.

It appears that Saudi leadership has abandoned the policy of hostility toward Shia populations, which it perceived as being sympathetic to Iran, in favor of accommodation and co-option. This new approach was partly motivated by the realization that the Saudi attempts to isolate and weaken these groups had not succeeded. It was also partly motivated by an effort to convince the Kingdom’s own Shia minority that the Saudi government differentiated between Iran’s Shia regime and the Shia populations in the Arab world.

Saudi officials hope that better relations with Iraq will encourage Saudi Arabia’s Shia population to view the Iraqi Shia authorities in Nejef as their source of religious authority (marjiyi’h) instead of the Shia clerics of Iran. Along with this new initiative toward Iraq, the Saudi government has also tried to reduce social and political discrimination against the Shias. It has, for example, imposed a ban on anti-Shia rhetoric in domestic media and religious sermons.

Saudi Arabia has shown a strong commitment to this new Iraq strategy and in the latest development, Iraq’s new Prime Minister Adel Abdel Mehdi visited Saudi Arabia in late April. His visit followed a visit to Iran two weeks earlier. While Saudi Arabia is interested in distancing Iraq from Iran, leading Iraqi political leaders view their rapprochement with Saudis differently. They are more interested in maintaining a balanced relation between Iran and Saudi Arabia. This balanced approach is visible in recent statements of various Iraqi political and ethnic leaders. The latest evidence of this policy is a recent political statement by Moqtada al-Sadr in which he calls on both countries to respect Iraq’s neutrality in their proxy war and demands non-intervention from both of them.

The latest stage of Saudi-Iraq rapprochement comes at a time when the U.S. unilateral sanctions have put some strain on Iraq-Iran relations. The U.S. is putting pressure on the Iraqi government to reduce its economic and energy ties with Iran and to prevent it from using Iraq for bypassing the economic sanctions. Iraq depends heavily on imports of natural gas and electricity from Iran but the Trump administration wants Iraq to find alternative sources for its energy needs. It has recommended Saudi Arabia as an alternative supplier, but it is very hard for Iraq to find suitable alternatives for electricity and gas imports from Iran, in the short run.

The pressure of economic sanctions has also made it harder for Iran to continue its generous economic trade with Iraq. Currently, Iraq owes close to $2 billion to Iran for unpaid energy import bills. Furthermore, in hot summer months, the demand for energy inside Iran is very high and it is politically infeasible for the Iranian government to export electricity to Iraq while facing domestic shortages.

Yet despite these challenges, Iran is trying to strengthen its political and economic ties with Iraq in face of the U.S. sanctions and growing competition from Saudi Arabia. Fortunately, the reduction of the sectarian conflict in Iraq after the defeat of ISIS has forced both countries to engage in positive and constructive competition as to who can offer more and better economic support. This can help defuse the sectarian tensions inside Iraq further. Both countries are reaching out to all Iraqi ethnic and political factions instead of adopting a sectarian focus. When Iran’s President Rouhani visited Iraq in March, he met with both Sunni and Shia political leaders. To emphasize this non-sectarian approach, Iran’s foreign minister, Mohammad Javad Zarif, who was accompanying Rouhani, said: “All Iraqis are our friends.”

In the meantime, Iraq is also pursuing an active foreign policy toward Iran and Saudi Arabia rather than acting as a passive beneficiary of this competition. Soon after the Iraqi prime minister’s April visit to Iran and Saudi Arabia, Iraq organized a regional parliamentary summit (of its six neighbors) in Baghdad, in which delegations from Iran and Saudi Arabia participated and had a chance to meet face to face. This was one of many initiatives by the Iraqi government to mediate between Iran and Saudi Arabia. Several Iraqi political leaders such as Muqtada Sadr, also support this mediation initiative because they believe that the Saudi-Iran proxy war will ultimately be played out on Iraqi soil and harm its national interest. Under the current geopolitical climate of the region, however, these efforts are unlikely to be successful, because of Saudi reluctance.

Improved relations between Saudi Arabia and Iraq can also pave the way for a rapprochement between Saudi Arabia and Syria’s Assad regime. The Iraqi government has maintained close relations with Syria in recent years and it is now actively encouraging Saudi Arabia to re-establish diplomatic ties with that country. Saudi Arabia and its allies supported the uprising against the Assad regime in 2011 and, along with the United States, provided financial and material support to various armed groups that fought against the regime’s military. Since it is now clear that these insurgencies have failed and Assad’s forces have consolidated their hold on most of Syria, Saudi Arabia is likely to modify its policy toward Syria in a manner similar to its new approach to Iraq. This will amount to a shift from supporting the opponents of the regime to re-establishing diplomatic ties in order to reduce Iran’s influence through diplomatic and economic incentives. Kuwait, Bahrain, Oman, and the UAE have made more progress in normalization of their relations with Syria in recent months and there are already some media reports that the UAE facilitated informal and backchannel talks between Saudi Arabia and Syria in late November 2018.

Concern about Turkey and Qatar: While Saudi Arabia’s new approach toward Iraq (and Syria) is primarily focused on containing Iran, it will also strengthen the Kingdom’s hand in its regional competition with Turkey and Qatar, which have developed close security and economic cooperation after the 2017 Saudi-Qatar crisis. Both Saudi Arabia and the UAE are mindful of the competition they face from Qatar and Turkey in Iraq (and potentially in Syria). After the defeat of ISIS in Iraq, Turkey is eager to participate in the post-ISIS reconstruction projects. There are some indications that Turkey is also inching toward restoring diplomatic relations with Syria with strong Russian encouragement. In Saudi calculations, if they don’t move fast enough they might lose many of the profitable investment opportunities in Iraq to Turkish and Qatari firms.

Impact on Saudi policy toward Bahrain: Improved relations with Iraq can also have a moderate impact on the Saudi approach to the Shias of Bahrain. Some Iraqi political leaders such as Muqtada Al-Sadr have expressed support for the political struggle of Bahraini Shias. In April Al-Sadr went as far as calling on Bahrain’s minority Sunni leaders to step aside. This statement caused a very negative reaction in Bahrain but the reaction of Saudi Arabia was moderate. While in the past it might have strongly condemned the Iraqi leader’s statement, this time it only called for improvement of relations between Iraq and Bahrain, followed by a general condemnation of interference in the internal affairs of Bahrain. This milder than expected response most likely was motivated by Saudi Arabia’s sensitivity to its growing relations with Iraq.

The Bahrain crisis has also revealed that some influential Iraqi political leaders, such as Al-Sadr, are likely to champion the Shia causes in the Arab world even as they distance themselves from Iran. This aspect of Iraq’s foreign policy can put some limits on how fast and how far the Saudi-Iraq rapprochement can go. On one hand relations with Iraq can serve as an incentive for a more moderate approach to Shia affairs by the Saudi government and on the other hand the bilateral relations will remain vulnerable to both side’s postures to various ongoing Shia–Sunni tensions.