Iraq needs to reset its relations with both Tehran and Washington in a way that protects Iraqi sovereignty and allows the central government to reassert control over the security apparatus.

After more than five months with a caretaker government and two failed nominations for the premiership, Iraq has finally settled on a new prime minister. The government of Mustafa Al-Kadhimi – a relatively unknown figure who previously headed the national intelligence service – faces a Herculean task in bringing some stability to a country at boiling point, and to safeguarding Iraq from military tension between the United States and Iran. After making several attempts to push Baghdad towards their preferred nominee for prime minister, both Tehran and Washington seem to have settled on Kadhimi as a compromise candidate to help stabilise Iraq, maintain the power-sharing structure, and slow military escalation in the country.

Part of Kadhimi’s success at forming a new government has been his flexibility. During the nomination period, Kadhimi was pragmatic and accepted several changes to his nominees for the cabinet. Washington aided his bid with messages of support and an important waiver for Iraq to continue importing Iranian electricity. After Kadhimi’s government received a parliamentary vote of confidence, the US immediately welcomed the news – with Secretary of State Mike Pompeo speaking to him by phone on the same day, offering American support for Iraq and significantly extending a sanctions waiver for Iraq’s trade with Iran. Iranian-aligned groups among Iraq’s Popular Mobilisation Forces and some Iraqi Shia political blocs had previously campaigned to spoil Kadhimi’s nomination. However, after a series of high-level visits by Iranian officials – including the new commander of the Quds Force – Tehran has come to terms with the appointment. Accordingly, Iranian Foreign Minister Javad Zarif congratulated Kadhimi on his confirmation.

Kadhimi lacks a popular base and does not have any party in Parliament that he can rely on for votes. As a consensus candidate, he needs to retain the goodwill of nearly all blocs to remain in power. This makes pushing through reforms particularly difficult, because he is in need of votes from parties that will only support him if they are not threatened by his actions. Given that Iraq’s quota system for ethno-sectarian power-sharing, known as muhasasa, continues to dominate politics, Kadhimi will need to work within its confines to make progress.

There are five critical challenges that will determine Iraq’s fate in the short term and by which Kadhimi’s tenure will be judged. The first is the economy and the financial crisis. Due to low oil prices, there are widespread serious concerns about whether the Iraqi government will be able to pay the salaries of public workers this month.

The government must regain some of the confidence of protesters, by reasserting control over security and providing accountability for past abuses

Secondly, the Islamic State group (ISIS) appears to be resurgent. Its fighters have carried out attacks in the same provinces that they seized in 2014, and pose almost-daily challenges to Iraq’s security forces – at a time when the international coalition to counter the group has reduced its presence there.

Thirdly, Iraq will need to carefully balance its public health response to covid-19 against economic needs. This is because a large section of the population rely on daily income to make ends meet.

Fourthly, the government must regain some of the confidence of protesters, by reasserting control over security and providing accountability for past abuses. Kadhimi swiftly ordered the release of all protesters the security forces had detained since October, when the demonstrations began; offered compensation to the families of those who have been injured or killed; and ordered a full investigation into the government’s response to the protests. Kadhimi also reappointed the popular Lieutenant-General Abdul Wahab Al-Saadi as commander of the Counter-Terrorism Service – Iraq’s top special forces unit – after his dismissal by former prime minister Adel Abdul Mahdi contributed to the protests. Many Iraqis welcomed this package of measures, seeing it as a first step towards repairing the government’s relationship with protesters. It also buys Kadhimi some time to carry out broader reforms. Yet demonstrators still expect Kadhimi to organise a snap election for a year from now, as he has promised to do.

Finally, Iraq needs to reset its relations with both Tehran and Washington in a way that protects Iraqi sovereignty and allows the central government to reassert control over the security apparatus. Baghdad’s diplomatic relations with Washington have experienced a downturn since October. Kadhimi’s government now has an opportunity to ease this tension and develop a pragmatic road map for the US-Iraq strategic dialogue set to begin in June. In theory, these talks will be based on the Strategic Framework Agreement signed between Iraq and the US in 2008. Practically, negotiations on a road map for US forces’ presence in, and engagement with, Iraq will likely continue beyond the US election in November.

Kadhimi has stated that he is forming a special team to prepare for this dialogue. In this, Bagdad is likely to focus on three key issues that can help him address domestic challenges. The first concerns how the US can continue to assist in countering ISIS and what Iraq must do to improve its security infrastructure and policies. The second centres on Washington’s provision of economic support to Iraq and its efforts to encourage the international community to contribute further financial aid to the country’s reconstruction. The third concerns Iraq’s relationship with Iran and Iranian-backed Popular Mobilisation Forces. This will include discussions of Iraq’s capacity to protect US interests and the White House’s willingness to stop using Iraq as a proxy theatre in its “maximum pressure” campaign against Iran.

The sides’ agreements in the dialogue will be subject to a test phase, to see whether: the US can refrain from undermining the Kadhimi government; how Iran will respond to the talks; and whether the Iraqi government will be able to reach key milestones. As the US presidential election could have a major impact on the direction of the dialogue, the nature of the US-Iraqi relationship may remain unclear until it is over.

Kadhimi will also need to engage in a parallel dialogue with Iran. This is primarily important to ensure that Tehran does not feel threatened by US-Iraqi negotiations, and to build confidence that Iraq will remain friendly towards Iran. Kadhimi will also need to persuade the Islamic Revolutionary Guard Corps’ Quds Force that Baghdad should reassert control of Iraq’s security forces – as a means to stabilise the country and prevent confrontation between the US military and Iranian-backed Popular Mobilisation Forces.

Kadhimi’s government has a chance to return Iraq’s relationship with the US and Iran to the condition it was in 2017, when the rivals both provided support to the country and engaged in minimal conflict with each other there. However, Kadhimi will have to quickly produce results and be decisive in building domestic support for his government. He will need to acquire tangible economic backing from the US and transfer this to ordinary Iraqis.

Kadhimi will also need to continue engaging in small but substantive confidence-building measures to address the concerns of Iraqi protesters. Otherwise, the underlying grievances of much of the population will overwhelm any diplomatic successes. There is no shortage of cynicism about whether Kadhimi and the political system he operates in is capable of meeting these challenges. Yet his nomination for the premiership is, in part, a recognition by Iraqi political leaders, Washington, and Tehran that Iraq needs to take a new direction – for its sake and in the interests of a US-Iranian detente.

Read more on: The Middle East and North Africa, Syria / Iraq / Lebanon, Iran

The European Council on Foreign Relations does not take collective positions. This commentary, like all publications of the European Council on Foreign Relations, represents only the views of its authors.