The Scope and Limits of the Emerging Iraqi-Saudi Relationship

A recent upsurge in bilateral diplomacy between Iraq and Saudi Arabia suddenly sees the Gulf Kingdom in the process of gaining considerable influence in Baghdad. A series of meetings, visits and diplomatic initiatives have bought Saudi Arabia back into the fold of normalised, even close, relations with Iraq, a policy it retreated from deliberately – and to its own detriment – following the removal of Saddam Hussein in 2003. All signs indicate that Saudi Arabia has grand designs for investment in Iraq’s agriculture and energy. These designs promise to benefit Iraq’s economy in the long-term and perhaps reduce Iraq’s exposure to dependency on Iran in the short-term. However, despite the wide scope for potential gains of secular diplomacy, the prospects for a realisation of these goals are limited by the substantial anti-Saudi sentiment from a section of the Baghdad political establishment and the armed Iranian-backed militias. As such, Iraqi PM Mustafa al-Kadhimi will have to balance engagement with the Saudis with the pre-existing Iranian connection and navigate towards economic gains with Saudi Arabia in such a way that does not threaten Iraq’s precarious security situation.

This November, ties accelerated into a rapid expansion of bilateral cooperation and investment deals. First, a Saudi delegation led by industrial and agricultural ministers met with Kadhimi and Parliament Speaker Mohammed al-Halbousi. This paved the way for a virtual meeting between Kadhimi and Crown Prince Mohammed bin Salman two days later in which the leaders discussed enhancing bilateral ties, particularly in energy and security. Then, on November 11, the leaders signed investment memoranda of understanding worth $10 billion, and this was followed a week later by the reopening of the Arar border crossing between the two countries, which had been shut for almost 30 years and remained the only crossing along the countries’ common border of 515 miles. This was a watershed moment for the two neighbours and promised to shower positive gains onto Iraq’s southern provinces from the overland trade with Saudi Arabia.

The most visible Saudi investment proposal into Iraq was the revelation that Saudi wants to cultivate 1 million hectares in a desert area extending across Muthanna, Anbar, Karbala and Najaf governorates to establish cattle-breeding stations. At least 15 joint cooperation agreements between the two neighbours have been signed, and the most recent visit saw the signing of a loan agreement for a Saudi-funded hospital and silos to be built in Anbar and Qadisiyyah, respectively.  A December meeting between the Chief of Staff of the Iraqi Army and the Saudi military attaché in Iraq even discussed the potential for joint military cooperation between the two neighbours. The Saudis are supposedly eager to support the Iraqi military institution and maintain cooperation with Iraqi security and intelligence officials, which they have done since 2012.

Clearly, there is great ambition and scope for Saudi-Iraqi ties envisioned by its leaders. However, there may be practical limits to how far these ties can be realised. Tehran’s allies in Iraq have watched the détente between Saudi Arabia and Iraq over the past few years uneasily, but they have refrained from reacting. As the Saudi-Iraqi relationship deepens and plans become realised, one wonders how far Iran’s allies will tolerate a Saudi incursion into zones which they took to be their own exclusive domain. A hurdle for increased Saudi clout in Iraq presents itself in the considerable anti-Saudi sentiment among certain Shia political establishment circles and their affiliated corporate interests. This bloc will do their best to discredit Saudi efforts at closer commercial cooperation with Baghdad. Former PM and leader of the State of Law coalition Nouri al-Maliki have dismissed Saudi entreaties and foreign direct investment as “colonialism,” a sentiment Kadhimi hit back as being a “shameful lie”.

Then, there are the Iran-backed militias of the Popular Mobilization Units (PMUs), who staunchly oppose any increased Saudi presence in Iraq. Wary of the rapprochement in Iraqi-Saudi relations, Kata’ib Hezbollah, the most militant pro-Iran militia, released a statement condemning Saudi Arabia’s actions. In the statement, the group said they are closely monitoring Saudi’s growing influence in Iraq and restated their opposition to Saudi investments in the country. Likewise, Asa’ib Ahl al-Haq issued a statement condemning the Saudis’ attempt to seize large swathes of Iraqi land under the pretext of investment. Kata’ib Hezbollah also regularly lump Saudi Arabia in with America and Israel in accusing them of forming a ‘criminal front’ responsible for the killing of top Iranian nuclear scientist Mohsen Fakhrizadah. Whether Saudi Arabia was behind that assassination or not, these groups’ strength and militancy beg the question as to whether it is even safe for Saudi Arabia to assume a greater presence in Iraq with its investments.

Conventional logic suggests the militias will not hesitate to follow through on their promise of revenge on Saudi Arabia if the latter has an increased physical presence in Iraq. Therefore, Saudi-funded infrastructure could be at a high risk of inviting projectile or IED attacks from the militias. For now, Saudi ventures, when they get underway, will likely be subject to occasional attacks and difficulties in operating. Trade vehicles crossing the border at Arar will likely suffer harassment at the very least by militias who fear Saudi influence in Iraq’s Shia regions. And if Saudi influence strays from economic and security into the political realm, the pro-Iranian factions will seek an even greater redress.

Considering this, the Baghdad government would like to balance existing ties with Iran with greater economic support from Saudi Arabia. With Saudi Arabia willing to invest the much-needed cash into the Iraqi economy, Kadhimi might not have much choice but to accept a greater Saudi presence even at the risk of security issues. Though Iran’s allies may see growing Saudi influence in Iraq through the lens of a zero-sum game, a secular diplomacy that will prove mutually beneficial has the potential to go beyond the Sunni-Shia sectarianism, which has ruined Iraq since 2003.  Even if not realised in the short term, economic gains may trump Iran’s political allies’ hostility to reviving ties with Saudi Arabia. Nevertheless, the armed groups’ strength and vehemence threaten the safety of Saudi’s growing influence in Iraq. For now, then, Saudi Arabia will have to tread carefully in Iraq.