Aiming Big by Thinking Small: A New U.S. Policy for Iraq

iraq policy

Iraq today is not the country it was four years ago. Senior officials in the incoming Biden administration, many of whom — like the president — are familiar with the country from their days in the Obama administration, will find a much-changed country. Many of the key Iraqi faces are the same, but the country itself has endured a sustained period of domestic turmoil that has altered the dynamics of power, deepened domestic fissures, and eroded the sovereignty of the state. Popular protests have rocked the political system and called into question the legitimacy of the political elite; armed groups, many of which came to the fore in the fight against the Islamic State, have become quasi-state actors that have sought to strengthen their independent political and economic power at the expense of government authority; and the Iraqi economy stands on the brink of financial collapse, with a massive budget deficit and insufficient oil revenues.

These changes, and the legacy of the Trump administration’s Iran-centric Iraq policy, have combined to erode the United States’ credibility and influence in Baghdad. Nowadays, U.S. policymakers increasingly struggle to get a serious hearing in Iraqi political debates, and the return of many familiar faces from the Obama days is not going to change that. Washington still has friends at the highest levels of government in Baghdad, but the numbers are fewer, and their ability to promote policies that align with U.S. interests is weaker.



If the United States is to restore some of its influence as a first step towards a sustained and mutually beneficial alliance with Iraq, it needs to become a credible partner again beyond the security sector. In policy terms, the Biden administration’s immediate focus will need to be on stabilizing the Iraqi economy and helping the country through elections. But more broadly, the United States needs to deepen its influence in Iraq from the bottom up and needs to reset U.S. ambitions. Security cooperation will remain a priority, but U.S. policymakers should also consider economic and institution-building initiatives that, while less grandiose than some past efforts to “fix” Iraq, actually address crisis areas that matter to everyday Iraqis and which have been the source of their discontent. The United States also needs to hold its erstwhile Iraqi allies to account, making sure that their agenda is aligned to U.S. interests rather than simply using U.S. support for their own narrow ends. In other words, to promote its national interests successfully, Washington needs to think smaller, and it needs to be much more conditional in its financial, institutional, and security support.

We’re Not in Kansas Anymore, Toto!

The domestic changes that Iraq has witnessed over the past four years have been profound. The most obvious difference is that Iraq is no longer at war with the Islamic State. Since that conflict was won, Iraq has undergone internal political turmoil. Beginning with the independence referendum in Kurdistan in 2018, and the subsequent protests in central and southern Iraq, the very basis of the 2003 political compact that has underpinned the Iraqi state has been tested and found wanting. The Kurdistan plebiscite, in which Iraqi Kurds voted overwhelmingly for independence in a vote that the federal government — and most of the rest of the world — refused to recognize, illustrated the corrosive impact of not resolving Iraq’s federalism dispute. The Tishreen protests of 2019, meanwhile, represented a breaking point for young Iraqis frustrated with the unyielding corruption, kleptocracy, and maladministration of Iraq’s political elite.

The elite’s refusal to change, and the violent repression of the protests by a murky mixture of armed groups, some part of the Iraqi security forces, has deepened the divide between citizens and their government. So has the rise of Islamist Shia militias, many of which are linked to Iran. Over the past four years, these groups have become perhaps the biggest barrier to political and economic reform. They have challenged state sovereignty and the government’s management of security affairs within Iraq’s borders.

All of this is taking place amidst the worst financial crisis that Iraq has faced since the 1990s, when it was subject to crippling U.N. sanctions. A fall in oil prices and production has left the government facing a growing fiscal deficit that has so far proved insurmountable. Prime Minister Mustafa al-Kadhimi and his team have preached reform, but they have yet to introduce meaningful change, raising the specter of eventual catastrophic financial collapse in the absence of external assistance.

Shaping a New U.S. Policy for Iraq

In the past, the United States might have sought to fix both the political and financial crises through direct intervention. But the days of imperial policy are behind us. Washington is no longer in a position to dictate to Iraqi leaders. The legacy of the 2003 invasion, military withdrawal, disengagement, and, latterly, disinterest have robbed the United States of the credibility and influence it once had in the country.

While Iraq does not seem likely to be a priority for the incoming administration, Washington cannot simply ignore the country. The Middle East remains important to U.S. economic and security interests. Iraq occupies a major strategic place in the region, straddling important fault lines, including the United States’ tense relationship with Iran, which will be a top priority for the Biden team; counter-terrorism; and the stability of global energy markets. Chaos or collapse in the country are bound to suck its neighbors into conflict, and the United States and its local allies will feel the ripple effects on a security and economic level.

Moreover, parts of the Iraqi political oligarchy and its population continue to look for U.S. assistance and partnership. Figures such as Kadhimi and the Iraqi President, Barham Salih, share aspirational goals with the United States for the type of country they want Iraq to be but face ever stronger headwinds domestically from opponents of political and economic reform. Meanwhile, parts of Iraqi society, including elements of the Iraqi protest movement, also look to the United States and other like-minded countries to support their causes more actively, help provide them with protection, and give tangible backing to their calls for change.

From the Ground Up

If the Biden administration wants to reengage the United States meaningfully in Iraq, it needs to establish much stronger local networks, including adopting some of the strategies that have served Tehran so well. In parallel to security sector support, pushing back on militias, and containing Iranian influence in Iraq, which have been Washington’s priorities for the past four years, it needs to adopt a coordinated policy that aims to establish the U.S. relationship with Iraq from the ground up and which gives Washington a better chance of helping to shape the political and economic evolution in Iraq in the direction it wants to see it go.

A first, and powerful, step would be restructuring the U.S. diplomatic presence in Iraq. A skeleton staff behind the protective walls of an embassy has become a barrier, not a bridge, to the Iraqi people. To make U.S. influence felt, Washington needs to allow its experienced political, economic, and public affairs professionals to do their jobs, building local networks, providing effective channels of communications, and delivering workable economic and institution-building solutions to their Iraqi counterparts. Flying officials in with lists of demands and then flying them out again smacks of a lack of commitment, and Iraqi leaders will not take Washington’s views seriously.

Instead, the United States should aim to build a sophisticated web of influence across Iraq, as Iran has done. The approach needs to be top-down and bottom-up, working with like-minded partners at a senior level to facilitate policy measures while establishing the grassroots relationships that will make technical and capacity-building programs work. In doing so, Washington also has to become much more selective and conditional, holding its Iraqi counterparts to real account. Often in the past, U.S. administrations have allied with politically powerful individuals and groups, both in the federal and Kurdistan regional governments, whose behavior has weakened the institutions and mechanisms of Iraqi state and society, served the interests of Iran and other disruptive players in Iraq, and worked directly against U.S. (and Iraqi) interests and policy goals. Washington has consistently turned a blind eye to Iraqi officials and groups who are guilty of promoting authoritarianism and corruption, and who have sustained the dysfunctional, and sometimes violent, status quo for their own benefit.

Focus on Practical Initiatives

The two most immediate policy areas where the Biden administration can engage Iraq are stabilizing Iraqi finances and providing electoral support (if and when elections happen). Neither will be an easy task.

A burgeoning public sector and low oil prices have left Iraq facing a fiscal emergency that threatens to bankrupt the country. Convincing Iraqi political leaders to implement reforms, principally cutting public sector spending and laying the foundations for private sector and non-oil sector growth to ease the burden on the state, will be critical to avoiding a fiscal catastrophe. The country also needs to commit to these and other painful structural adjustment measures before it can get desperately needed assistance from the International Monetary Fund and other international financial institutions to see it through its financial dire straits. It will also likely need bilateral financial and technical help. Some analysts have called on the Biden administration to take direct action, which may help. But cajoling and incentivizing Iraqi leaders in the right policy direction during an election year — something the United States lacks the diplomatic wherewithal to do at present — will be as important as the assistance itself.

The Biden administration should also do its best to ensure Iraqi elections are secure, free, fair, and inclusive. Being willing to condemn election violence or voter intimidation will be important, and Washington could also achieve a lot by working to ensure the independence and effectiveness of the Independent High Electoral Commission and providing electoral assistance at a grassroots level. The United States needs to be more than an election monitor: It needs to offer technical assistance to nascent groups that are organizing to contest the poll under a banner that aligns with U.S. interests in Iraq, namely a representative Iraq with effective institutions, rule of law, an open society, a strong economy, and a vibrant private sector.

In the longer term, Biden administration policy should be focused on programs and sectors that reinforce this vision. In addition to security assistance, education, banking, and law reform are areas that would contribute to long-term Iraqi stability and where the United States is well placed to help.

Helping Iraq to build a 21st-century workforce to staff a competitive private sector through education-to-employment programs is one such initiative. The public sector, which has grown three-fold in size since 2004, now employs over three million Iraqis (more than 30 percent of the workforce). Iraq has a massive youth bulge — 60 percent of the population is under 25 — youth unemployment is officially estimated at 36 percent, and up to a million people are forecast to join the workforce each year by the end of the decade. The country desperately needs to educate young Iraqis for employment in the private sector, by providing them with the English language, professional, and sector-specific skills they need to succeed.

U.S. policy could help in two areas. One is helping to devise, fund, and possibly administer education-to-employment initiatives designed to provide young Iraqis with these basic skills. A recent small-scale initiative of this type one of us started in Iraq illustrates the local appetite for such programs, and it has already been considered by the Iraqi government as a blueprint that could easily be built upon. Short-term vocational and graduate training, with English and academic-cum-professional skills like reading, writing, and research at the core, and specialized programs in business administration, public policy, information technology, and other deficit areas could be supported. These programs could be extended beyond Iraqi youth to provide retraining for government employees, either to prepare them for private sector jobs as the government downsizes, or to improve government administration.

The United States could also help Iraq to revive its foreign scholarship program to send undergraduates and graduates to study abroad. A previous program, the Higher Committee for Education Development, set up after 2003 and managed by the prime minister’s office, sent hundreds of Iraqis to graduate school overseas, many of whom are now in government, the private sector, or academia. The committee was forced to shut down in 2015, though, due to a lack of funding.

The second area is banking-sector reform. Iraqi banks are, for the most part, undercapitalized, risk averse, and burdened with government lending. Credit to grow new business is simply unavailable to most private sector companies and nascent start-ups. The Biden administration could use government aid and lending institutions to provide the basis for new credit facilities, along with international financial institutions, or the United States could implement a targeted educational campaign to advise the Iraqi government on the reform steps it urgently needs to pursue.

U.S. support should also focus on programs designed to enhance the professionalism of Iraq’s legal profession. Direct collaboration between U.S. state bar associations and their Iraqi counterparts, for example, would provide quick and effective benefits. More broadly, helping to improve the quality of legal education in Iraq through partnerships with U.S. law schools would provide a powerful boost and would nudge the country toward developing a new, potentially more politically independent, legal culture. Emphasis could be put on areas such as international commercial and contractual law, where there is a dearth of Iraqi expertise. Online learning would provide a powerful educational tool, avoiding the need to take Iraqis out of the country and allowing a greater number to benefit from such initiatives.

These initiatives will only succeed if the United States has an effective partner on the Iraqi side. Too often, initiatives disappear into the black hole of Iraqi bureaucracy, their value undermined and their impact neutralized. The process also gets corrupted by interference from political factions that have developed fiefdoms at different levels in different ministries, and which see capacity-building programs either as an opportunity to be plundered or a threat to be blocked.

Consequently, U.S. technical and capacity-building programs need to be managed on the Iraqi side by a senior-level coordinating body that has the authority to reach down into individual ministries and departments to implement these initiatives. The Biden administration should therefore demand as a price of its assistance the establishment of a politically independent body within the current Iraqi presidency and/or the prime minister’s office to be the initial touchpoint for U.S. initiatives and to ensure coordinated management on the Iraqi side. A move in this direction would also potentially bolster senior Iraqi officials who share Washington’s vision for Iraq’s future.

Readjusting Focus

Recalibrating U.S. policy to focus on technical assistance and capacity-building in specific sectors in Iraq stands in contrast to Washington’s imperial “fix the country” mentality of the 2000s and the disregard of the Trump years, two extremes that were equally unsuccessful at promoting U.S. interests. The goal would be to establish a new basis for expanded U.S. influence by focusing on areas of low politics and to seek to nudge Iraq in the direction of a stable, representative state with the foundations for economic growth and long-term prosperity.

By laying out a strategic plan for technical assistance in select economic areas, and by linking it to tangible metrics of progress, the United States can limit the costs of its policy initiatives and provide itself with clear indicators of success or failure that can be used to determine future policy steps. Top-down policy by démarche is no longer a viable option, if indeed it ever was. But mixing more active diplomacy with more targeted initiatives may be a workable approach that eventually leaves the United States with deeper and more lasting influence in the country than its current policies will bring.



Raad Alkadiri is a non-resident senior associate with the Energy Security and Climate Change Program at the Center for Strategic and International Studies.

Christine M. van den Toorn is founder and president of the Iraq Fund for Higher Education.

Image: Mustafa Nader