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Wall Street Journal / News

Iraq Grapples With Balance Between the U.S., Iran and Saudi Arabia

Will Iraq maintain its policy of balancing ties with Iran and its rivals, Saudi Arabia and the U.S.? And can it jump-start its economy?

Shiite cleric Moqtada al-Sadr’s bloc outpolled the Iraqi prime minister’s coalition in last month’s elections.

BAGHDAD—As Iraq’s fragmented political forces negotiate how to form a new government following last month’s elections, two issues loom large.

Will Iraq’s recent policy of carefully balancing ties with Iran and its rivals, the U.S. and Saudi Arabia—an approach championed by Prime Minister Haider al-Abadi—survive in a new political environment?

And will Iraq’s new government be able to take painful steps to jump-start economic reforms, eliminating inefficient subsidies and dismantling corrupt patronage networks that stifle development?

The May 12 election dealt a major setback to Mr. Abadi, whose Nasr coalition came in third in the number of parliament seats. It fell behind the Sairun bloc of Shiite cleric Moqtada al-Sadr, who campaigned on a nationalist platform opposed to interference by Iran and the U.S., and the Fateh bloc dominated by pro-Iranian Shiite militias.

With challenges to election results before Iraq’s Supreme Court and a possible recount, it will take at best two months—and possibly as long as six months—for the new administration to be formed, Iraqi politicians say. It is far from certain that Mr. Abadi, despite his successes in winning the war on Islamic State, will retain the job he has held since 2014. In part that is because of his poor electoral showing and in part because of widespread resentment about the fact that his Dawa party has occupied Iraq’s top executive position since 2005.

Yet, the nature of Iraq’s political makeup—and its geopolitical position—is such that Mr. Abadi’s legacy of improving ties with Saudi Arabia, Turkey and the U.S. while containing Iran’s still formidable influence, is likely to remain even if he leaves office.

“Had there been no achievement of a positive balance in relations with other countries, Iraq would not have been able to defeat ISIS,” said Abdelhussein al-Mosawi, a lawmaker and secretary general of the Fadhila party, a member of Mr. Abadi’s bloc. “No future government would be able to stray away from that balance.”

The head of Mr. Sadr’s political bureau, Dhiaa al-Assadi, embraced a similar view. “We want good relations with all regional countries, but we don’t want them to influence our political decision-making,” Mr. Assadi said. “If Iran is not on good terms with Saudi Arabia, why should we not have good relations with Saudi Arabia? It’s not the Iranian position that should guide our relationship with another country. And if Saudi Arabia is not on good terms with Turkey, it doesn’t mean that we shouldn’t have a good relationship with Turkey. Iraqi interests should come first.”

People at the site of an explosion in Baghdad last week.

A key political development this week was Mr. Sadr announcing a surprise alliance with the Fateh bloc dominated by Shiite militias—a joining of forces that, despite disagreements on key issues such as relations with Iran, are simply too strong to remain outside government.

“This coalition will act as a safety valve for Iraq,” said Razaq al-Haidari, a prominent lawmaker with Fateh. “It ends the accusations of negative foreign intervention in Iraqi affairs. We don’t deny that Fateh has strong ties with Iran and that Sairun is welcomed by Saudi Arabia and other Arab sides. This is a healthy sign. This coalition will become the basis of a broader coalition.”

Other likely members of this nascent coalition are the centrist Hikma bloc of moderate Shiite cleric Ammar al-Hakim and the mostly Sunni Wataniya coalition led by former Prime Minister Ayad Allawi, as well as some Kurdish parties.

“We believe in setting up an Iraqi government in the way that protects Iraq from all regional and international conflicts, making it immune from the hostility between the U.S. and Iran, or between Iran and Saudi Arabia,” said Fadi al-Shimmari, a member of Hikma’s political bureau and its senior negotiator in these coalition talks. “And we are very keen to involve Fateh because it is a military power on the ground, and we believe that this power should be fused into government security forces.”

The problem of Iraq’s post-2003 political setup, of course, is that every party always wanted to be part of the government, enjoying the patronage system that comes with controlling a ministry or a province. No significant political force in the outgoing parliament performed the functions of an opposition.

Mr. Sadr, among others, campaigned on the idea that a new Iraqi government should have a clearly defined ruling majority and a clear opposition. That is something that Fateh officials also back.

“We would like to abolish the quota system,” Mr. Assadi said. “Parties were dividing the branches of government along ethnic and sectarian lines. We would like the cabinet to be built on professionalism, on a technocratic basis.”

So far, at least, it seems that the main political force that’s likely to end up in opposition is the State of Law bloc of former Prime Minister Nouri al-Maliki, who once sent Iraqi forces to oust Mr. Sadr’s militias from the southern city of Basra, and who is seen by many Iraqis as responsible for unleashing the sectarian tensions that led to the emergence of Islamic State in 2014.

Still, the question for many Iraqis is whether excluding major forces from power could end up destabilizing the country given their ability to provoke unrest—and whether such an approach would hasten or, instead, hamper reforms.

Mr. Mosawi of Mr. Abadi’s bloc argued that the challenges ahead mean that the new government should be as inclusive as possible. “It will need to adopt difficult economic decisions, and so it will need support from the street,” he said.

Other Iraqi politicians disagree. If the current system of political quotas and patronage networks isn’t replaced with a competent, technocratic administration that starts delivering services soon, a political cataclysm may become unavoidable, warned Mr. Shimmari.

“Iraqi people are fed up,” he said. “It is very possible that if we keep coming up with old solutions, we will have a political revolution on our hands.”

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