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Update No: 116 - (26/01/13)

Summary: Iraqís Sunni tribes have entered open dissidence again, although not yet armed resistance. The role of regional actors like Saudi Arabia and Qatar seems obvious, but the Sunni Arabs, once isolated, now enjoy the sympathy of the Kurds and even of some Shiite factions. While pressure on Maliki is greater than ever, the key issue is whether Iran will support him to the bitter end or whether, educated by the experience of Syria, will try to replace him with somebody less inclined towards brinkmanship.

Will Syria drag Iraq to hell?
The Iranians appear increasingly worried by Malikiís brinkmanship, which risks causing the disintegration of Iraq and civil chaos, something that Iran has no interest in. Maliki has benefited from extensive Iranian support in the past, but has by now managed to create his own power base, and is no longer so easily manageable by Teheran, whose attempt to defuse tension among Iraqi factions are not achieving much.

In particular, the Iranians have sought to mediate between Maliki and the Kurdish regional government in the north of Iraq, with which they also have good relations. Their failure means that the Kurds are tempted to join an anti-Maliki coalition which is led by Arab Sunnis and is supported by Saudi Arabia, Turkey and Qatar. The Iranians seems to be undecided about what to do in the face of Malikiís stubbornness. They see that their other main ally in the region, after Bashir Al Assad in Syria, is at risk. Their influence risks being drastically reduced. Should they back Maliki up with all means, risking another Syrian situation, or engineer the replacement of Maliki with a more pliable Shiite politician?

Enough is enough
Maliki has been facing civil unrest for weeks in the Sunni heartlands of the north, where the influence of the Syrian insurgents is beginning to be felt. In fact the Al Qaida element in the Syrian insurgency originates from the Iraqi branch of Al Qaida, so a connection was always there. Recently, however, the border tribes have shifted their support towards the Syrian insurgents, facilitating a spill- over in Iraq. At the same time the Kurdish militias and the Iraqi army are facing each other off, on the borders of the Kurdish region. Now one of the Shiite factions most uneasy about Maliki, Muqtada As-Sadrís movement, is also joining the opposition. Maliki now faces the risk of being impeached by the Parliament. His pressure on Sunni Arab politicians hostile to him has gone too far with the targeting of Al Issawi, the finance minister, and instead of splitting the Sunni opposition, co-opting part of it, the result has been tribal mobilisation in Anbar province, whose militias maintain considerable military power, enough to start a new civil war in Iraq.

The tactic of arresting women to put pressure on the protest leaders also backfired as the tribes are taking it as a major breach of their honour. Maliki first closed down the border with Jordan, in order to put economic pressure on the protesters, but then had to reopen it and has already made further significant concessions to the demonstrators, accepting to water down the de-Baathification law, which he was previously pushing very aggressively. He also allowed the release of numerous political prisoners from jail. For now, however, the concession seems to have emboldened the protesters rather than appeasing them.

But oil is still oil
On the economic front, undaunted by the growing political mess, oil companies continue their labour to identify lucrative agreements which would justify their investment. Iraq just announced the first discovery of a new oil field in many years, the first result of resumed prospecting. BP seems interested in investing in the contested area of Kirkuk, which both Baghdad and Erbil claim as their own. Here oil fields are badly in need of some overhaul to boost productivity. A Chinese company seems interested in replacing Exxon in West Qurna, partnering with Lukoil. In the background, the Kurdish regional government has now suspended exports through the government pipeline and is instead beginning to use tankers to move oil by road, as the dispute over payments with Baghdad has not yet been resolved.


Forecast 2013
What is in store for Iraq in 2013 is extremely uncertain given Malikiís brinkmanship, the interference of regional powers and the complex Iraqi political scene. Plunging back into civil war is a possibility, even if right now nobody really wants that. Many want to see Maliki gone, but if Maliki does not graciously concede, then the worst could happen. The sectarian divide is still strong, despite some Shiites supporting politically the Sunni opposition for opportunistic reasons (in order to get rid of Maliki). The fact that interest in the oil and gas sector is not diminishing suggests that most business observers do not think the worst will happen, somehow.

Should the flow of investment be maintained (it has in fact so far been relatively modest considering the size of Iraqís oil reserves), the economic prospects of Iraq are inevitably upbeat, despite the inefficiency of the government and the tendency to waste resources in patronage. The world needs Iraqi oil to keep international prices down, so one should expect American, European and Chinese powers to do their best to maintain a degree of stability. But the game in Iraq is not being played by world powers: it is a regional game for supremacy, over which the rest of the world has little say.

Even if Maliki were to go, forging a new, functional coalition will not be easy. After all, Malikiís rivals already tried to do so after the last elections, but failed after months of efforts. Perhaps now, educated by the experience of Malikiís faltering effort to establish authoritarian rule, they will be wiser and readier to make compromises. One would be ill advised to bet on this, however.

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