Al Sudani's visit to Washington went well. Now for the hard bit…

The Iraqi PM and Joe Biden stuck to the script, emphasising economic opportunities. No one mentioned US troop withdrawal, but Baghdad’s tense relations with Iraqi Kurds did come up.

Iraqi Prime Minister Mohamed Shia Al-Sudani (C-L) meets US President Joe Biden (C-R) at the White House to discuss economic opportunities in April 2024.
AFP
Iraqi Prime Minister Mohamed Shia Al-Sudani (C-L) meets US President Joe Biden (C-R) at the White House to discuss economic opportunities in April 2024.

Al Sudani's visit to Washington went well. Now for the hard bit…

With drones, missiles, and bombs flying over Iraq (some from Iran to Israel, others from Israel to Iran), the visit of Iraqi Prime Minister Mohammed Shia' Al Sudani to Washington could have been awkward.

In the end, it went smoothly. Discussions focused mainly on economic matters. Al Sudani had come aiming to activate aspects beyond security and political issues outlined in the US-Iraq Strategic Framework Agreement (SFA).

The timing was bad. Most Iranian missiles and drones were passing through Iraqi airspace on their way to Israel just as Al-Sudani’s plane landed at Andrews Air Force Base in Maryland, near Washington, D.C.

Yet Al Sudani did not return to Baghdad, as some thought he may, and the sovereignty violation did not overshadow his visit.

Both the Americans and the Iraqis agreed on the need for Israeli restraint over Gaza, for an end to military action there, for efforts to alleviate the plight of the Palestinians, and for the need for stability in the Middle East.

Conspicuously absent from the dialogue was the more challenging and contentious topic of the 2,500 American forces still in Iraq, specifically their withdrawal. Discussions began in January, but the Iraqis would like a timeline.

In private, the Americans say Iraq needs to do more to safeguard US troops from attacks by armed factions aligned with Iran, but this was not discussed either.

Reuters
An American soldier at a military base in the Makhmour area near Mosul during an operation against ISIS militants on 18 October 2016.

Security to economics

The joint statement following talks between Biden and Al Sudani clearly reflected the transitioning relationship—from a security focus to an economic agenda.

The president’s opening statement hinted at security, with the pair agreeing on “the importance of working together to advance regional stability and reinforce and respect Iraqi sovereignty, stability, and security.”

Yet they quickly focused on "a diversified and growing Iraqi economy, integrated with the region and the global economic system", which they said was "the foundation for lasting stability in the region and prosperity for the Iraqi people".

The language largely derives from the SFA and aligns with Al-Sudani's focus on prioritising the economy over politics. This is in part because he is heading a broad governing coalition that could easily unravel if a politically thorny issue arises.

Al Sudani needs partners in Iraq if it is to make the economic strides it needs. To an extent, Iraq's economic model is yet to be decided. It could be the American capitalist ethos rooted in competition, a Chinese-style government-managed economy, or a mix.

The timing Al Sudani's visit was bad. Iranian missiles and drones were passing through Iraqi airspace on their way to Israel just as his plane landed in the US.

Energy and banking

As is customary in joint official statements, each state emphasised its priorities, and the US noted Iraq's need to pursue "energy self-sufficiency". This means developing its gas sector to reduce dependence on Iranian gas.

Since Washington currently sanctions Iran, such dependence requires US exemptions for Iraq to conduct transactions in dollars with Iran to procure gas and even electricity.

Iraq has made too little progress in its gas sector. Bureaucracy is cited for pushing the go-live date back five years, from 2025 to 2030.

Since 2011, all Iraqi governments have pledged to wean Iraq off Iranian gas "in the coming years". Those "coming years" never actually come.

The US also wants Iraq to modernise its banking system and integrate it into the global financial network. This is mentioned in the SFA.

Unlike with gas, Iraq has taken notable steps forward in this area, enacting transparency measures (often under American pressure) that require Iraqi banks to adhere to international fund usage and management standards.

This aims to curb the smuggling of dollars to Iran and Syria, which is a matter of significant concern for Washington.

AFP
Citizens buy and exchange foreign currency at the exchange office after the exchange rate fell after the Central Bank President changed in Baghdad, Iraq, on January 25, 2023.

Baghdad and Erbil

Also mentioned was the strained relationship between Baghdad and Iraqi Kurdistan, based in Erbil.

Biden commended the al-Sudani government and the Kurdistan Regional Government (KRG) for attempting to resolve their differences.

He said they had made efforts "to reach durable agreements that resolve longstanding challenges, including the recent arrangement to pay two months' of KRG civil servant salaries".

In February, the Iraqi Federal Court stopped the government from paying salaries in Kurdistan unless it sent oil revenue and customs duties to Baghdad.

Erbil was incensed by this decision, backed by the governing Coordination Framework, which it saw as biased, unconstitutional, and undermining the principle of federalism.

The ruling Kurdistan Democratic Party threatened to boycott regional elections and withdraw from the political process in protest.

Read more: KDP decision to boycott polls sends shockwaves across Iraq

Interestingly, Iraqi Kurdistan's Prime Minister Masrour Barzani visited Washington shortly after the rulings were issued, to garner US support for them to be reversed.

Biden's emphasis on the importance of reaching "permanent agreements between the parties" suggests that Washington believes judicial rulings should not supplant negotiations between political entities.

The US wants Iraq to pursue "energy self-sufficiency". This means developing its gas sector to reduce dependence on Iranian gas. 

Enacting reforms

The true test for Al Sudani will come when he returns to Baghdad, following what is generally considered to have been a successful visit.

The challenge lies in translating the SFA's rhetoric into tangible action. This will require administrative, economic, and educational reforms, which are needed if Iraq is to fully capitalise on its partnership with the US.

It's easier said than done. Political factions with vested interests in maintaining the status quo to preserve their influence will fiercely resist these reforms.

It does not bode well that some of the most formidable opponents of these reforms are allies of Al Sudani himself.

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