January 20, 2021: The government is being pressured by the United States to crack down on Iranian weapons shipments being allowed to cross the border into Syria at guarded border crossings. The weapons shipments are often hidden from view by legitimate cargo, but it does not take much effort to reveal that deception. These weapons shipments are guarded by Iran-backed PMF (Popular Mobilization Forces) militias. There are fewer of these militiamen because their primary reason for being in an Iran-backed militia is the extra pay. The PMF brigades are paid by the Defense Ministry as if they were another part of the armed forces. The additional pay from Iran is increasingly necessary to keep militiamen in the service of Iran. The economic sanctions on Iran forced cuts of about fifty percent on what Iran spends on PMF militias. Apparently, further reductions are on the way. In part that is because all those billions of dollars going foreign wars rather than to the needs of the Iranian people has caused a lot of problems for the Iranian government. Corruption and mismanagement by the Iranian religious dictatorship crippled the economy even before all the revived American sanctions hit with full force in 2018. The longer those sanctions are in effect, the fewer pro-Iran PMF militiamen there are in Iraq. Iran has never been very popular among Iraqi Shia Arabs and Iran has become less popular since 2014 when the Iranian offer to help form Iraqi Shia militias to deal with the ISIL (Islamic State in Iraq and the Levant) invasion. That help turned out to be an opportunity for Iran to build its own pro-Iran Shia militia and use it to threaten the elected government and any foreign (especially American) troops in Iraq. The threats backfired and Iran is on the defensive in Iraq. With less cash for bribing key people and paying militiamen, Iran is less able to influence events in Iraq. Worst of all, Iranian influence is declining to the point where pro-Iran gunmen are seen as an internal criminal problem rather than an historically troublesome neighbor.

There are several other trends that are annoying Iran and perhaps the worst of these is the growing commercial relationships between Saudi Arabia and Iraq. Such economic links are not unknown but, in the past, they existed only because Iraq was ruled by its Sunni Arab minority. Then the era of Sunni minority rule ended in 2003. The new Shia government initially saw the Saudis as an enemy and the Saudis considered this new Shia dominated Iraqi government as a tool of the Iranians. Over the last decade attitudes have changed. The Saudis have come to understand the Shai Arab majority in Iraq is more Arab than Shia and the Saudis were willing to live with that. Iran has never been able to win over the Arab Shia, in large part because inside Iran their own Arab minority is despised and mistreated. Always has been and as far as most Arabs are concerned, that centuries old attitude is not going to change. Despite that Iran and Iraq have a lot of commercial relationships but even these are being threatened as Iraq does more business with the Gulf Arab states. Even the religious connection has been lost as the most senior Iraqi Shia clerics renounce any loyalty to Iran.

Saudi Arabia and Iran are competing to win the most popular support possible in Iraq. The Saudis are offering billions of dollars’ worth of economic investments, much of it aimed at improving the Shia south and the Shia majority city of Basra. This is the heartland of the Iraqi Shia. While Shia Arabs live throughout Iraq, most are down south where they are very much the majority. Most Iraqi Shia are dissatisfied with Iraq’s Shia dominated parliament and government. Lots of government investment has gone to the south and much of it got stolen or pays for sub-standard work. Corrupt Shia politicians were responsible for this and since 2018 there have been anti-corruption demonstrations in the Shia south and Shia neighborhoods in Baghdad.

The Saudis point out that they also have a corruption problem but have learned how to control it and have been reducing the corrosive impact of corruption on their economy. They are obviously successful and so are other Arab states in the area. In the latest global corruption survey, those at the top of the list are all more successful because they have the least corruption. Down at the bottom are the more and most corrupt. The Saudis are at 52 out of 180 nations while Iraq is 162. The UAE (United Arab Emirates) is at 21, ahead of the U.S. at 23 and Israel at 35. Iran is at 146. The Iraqis have been getting more advice and economic assistance (trade and investment) from the Sunni Arab oil states while all they get from Iran is offers of alliance, more Iranian military advisors and threats of violent retaliation if Iraqi politicians do not comply.

Economically, Iran has not got much to offer. Their latest proposal is a military/defense treaty with no Iranian cash attached. These Iranian treaties and aid packages once included generous bribes for key politicians. Since the Americans regained its status as the global leader in oil production, Iran had a lot less cash for their foreign subversion efforts. That’s because the American production had driven oil prices down and Iranian exports are subject to seizure. Iran has a lot less cash for terrorism.

Iran still has many thousands of loyal and fanatic Iraqi Shia on their side but back in 2016 they had a lot more. It was downhill from there because Iran has not been able to improve the lives of Iraqi Shia and Iraqis have noticed. It has also been noticed that Iran has been trying to enrich Iranian manufacturers by driving Iraqi competitors out of business. No such threat from the Sunni oil states.

With the Sunni terrorist threat from al Qaeda and ISIL much diminished, the Iranians feel they have lost a valuable asset in Iraq. Trying to demonize the Americans never worked very well because U.S. troops took the lead in fighting the Sunni Arab terrorists and still do. Since 2014 most of the American military aid has been from the air, with over 13,000 airstrikes and many more surveillance missions. There are only 3,000 U.S. troops in Iraq right now and the American goal is to get them all out. Despite that Iran continues to insist that the Americans are the Great Satan and a dangerous enemy of Islam. Four decades of preaching that has not reflected well on Iran. This assessment is shared by most Iranians as well.

The U.S. and Iraq are deadlocked over how to move against Iran-backed Iraqi militias. In late September the U.S. threatened to bomb pro-Iran Iraqi militias unless Iraq eliminated the threat first. The American position was that Iran was at war with Americans in Iraq and said so frequently and publicly. All the major Iraqi Shia religious leaders have called for the disbanding of all PMF militias, in part because Iran was still trying to turn the PMF into an Iraqi version of the Lebanese Hezbollah organization called Kataib Hezbollah. Founded in the 1980s with Iranian help, the original Hezbollah still takes orders from Iran and has dominated Lebanese politics for over three decades. Most Lebanese want Hezbollah gone but a heavily armed militia with enormous economic power in Lebanon is difficult to disband. Iraqis want Kataib Hezbollah gone now and cannot understand why their prime minister does not act. Fear probably has a lot to do with the delay. In Lebanon Iran had several senior Lebanese politicians assassinated for being too openly hostile to Hezbollah. The personal danger for the Iraqi prime minister is based on fact, not just speculation.

In response to the American threat against them the Iran-backed militias, especially Kataib Hezbollah, agreed to a temporary halt to attacks against Americans. Not all the pro-Iran factions agreed, but most did and there have been far fewer attacks lately.

The new Iraqi prime minister (Mustafa al Kadhimi) is decidedly hostile to Iran and calls for easing the Iranians out and not giving them any justification to get more violent. Kadhimi had already ordered the removal of many pro-Iran commanders in the security services and disbanded some units that were dangerously pro-Iran. Kadhimi went to the U.S. in mid-2020 to meet with the American leader and discuss improving U.S.-Iraq relations. Such a meeting was important because Kadhimi is the first post-Saddam (2003) prime minister that is not heavily influenced/controlled by Iran.

Oil, Power And Poverty

For most of 2020 t he government has not been able to the pay salaries on time for most of the eight million recipients of monthly government payments. This crisis was expected because lower oil prices and quarantine restrictions caused by covid19 were no secret and the government had much less revenue. The largest government expense is monthly payments to 4.5 million government employees, 2.5 million retirees and a million welfare recipients. Increasingly the money was not there and borrowing was unable to cover the shortfall for long. The obvious solution was to reduce payments and implement long-delayed reforms. This would include eliminating those who were being paid several times, usually fraudulently. For example, a retiree might still have one or more government jobs. The eight million payments were not going to eight million individuals. Many paychecks, no one is sure how many, go to one person, usually a senior official who controls multiple jobs and secretly collects the monthly payments for himself. The armed forces were long considered the worst offender in this area but the Americans introduced biometric IDs when American aid was paying for most of the defense budget. That made it much more difficult to create phantom soldiers. But not impossible and soon the government was wasting billions of dollars a year paying people who did not exist. Reducing the phantom payroll would be a major political and legal undertaking and so far, it has not been enough of a priority for government to take on. Another lucrative cost-cutting target is the size of payments for senior officials, including retired ones. These people often get several hundred thousand dollars a year each and over a hundred thousand dollars a month when they retire.

The financial situation is also dependent on oil income, which fluctuates depending on the sale price for oil and how much Iraq can produce. In August 2020 there was $3.52 billion in oil sales, versus $3.49 billion in July. Oil sold for $43 a barrel compared to $40 in July and $34 in June. Iraq had to cut production to about three million BPD (Barrels Per Day) for the rest of the year, from the 3.8 million BPD in August. This being done to maintain its membership in OPEC (the oil cartel) and to make up for several instances of overproduction since late 2019. Iraq is more dependent on oil income than any other Gulf nation. Because of lower oil prices and lower oil demand the Iraqi GDP is expected to shrink at least ten percent in 2020. The monthly government payroll is $4.5 billion and in 2020 oil income has only been able to cover about half of that. Until September the government managed to borrow money to cover the monthly shortfall. But after that the government was out of credit and millions of Iraqis were not getting paid on time. The situation improved a bit at the end of the year when oil income for December was $4.23 billion because that oil solid for $48 a barrel. The 2021 government has not got major reductions and depends on higher ($60 a barrel would be nice) oil prices to work. That is seen as a more realistic solution than taking on the corruption problems with who gets paid what by the government.

January 19, 2021: The government announced that the June national elections would be delayed until October for “technical reasons.” Chief among these is implementing measures to ensure the voting is free and fair. Iran has been the main offender in subverting the election process, seeking to prevent the election of anti-Iran candidates. There are a lot more anti-Iran candidates this time and Iran has less money for bribes is seen as relying more on threats and violence instead. Iran is not the only offender; other neighbors will seek to use cash to get “cooperative” candidates elected. This time around Sunni Arab oil states are the usual suspects but those foreigners are not trying to take control of Iraq.

South of Baghdad, in an area controlled by the Iran-backed Kataib Hezbollah , an explosion took down some electricity supply pylons and caused power outages. Initially it was though that the explosions were from an American airstrike on Kataib Hezbollah , which has long backed attacks on Americans, especially troops, in Iraq. The Americans said it was not them and Iraqi police examining the site noted that the cause appeared to be explosives placed on the towers to quickly bring them down. Moreover, there were no civilian casualties. Locals suspected ISIL, which has been fighting with Kataib Hezbolla h, but ISIL did not claim credit for this action. One reason Kataib Hezbollah was popular in this area was because they drove out ISIL cells operating in the area and ISIL has not been able to reestablish a presence in the area which once was largely Sunni Arab. ISIL sought to protect the remaining Sunni Arabs and failed. There are other possible suspects; Sunni Arabs who once lived in the area and are angry at the government for not helping them. Another suspect might be gangsters trying to export money from the power company, which is under a lot of popular pressure to improve service. At the moment the culprit is unknown.

January 18, 2021: The government announced that it had arrested those responsible for recent rocket attacks on the Baghdad Green Zone, where the American, and other embassies, are. The government also tried to persuade Iran to use its influence to discourage such attacks. While most of the recent attacks were not carried out by Iraqis paid by Iran, they often were Iraqis who agreed with the Iranian description of America as the “Great Satan” and enemy of all Moslems. That view was once very popular in Iraq but since the Americans overthrew the hated dictator Saddam Hussein in 2003 and played a key role in defeating Sunni Islamic terrorists from trying to reimpose Sunni rule on Iraq (where Sunni Arabs were never more than a fifth of the population), the average Iraqi is much less hostile towards the Americans. The recent rocket attacks on the Green Zone were amateurish and rarely hit the large American embassy compound. Instead, it is Iraqi civilians who are getting killed and wounded by the rockets. This made it easier to catch those responsible because more Iraqis were eager to see that happen and cooperated with police.

January 17, 2021: In the north, outside Mosul, six policemen and one civilian were killed by an ISIL bomb left behind when ISIL was driven out of the area in 2017. There are a lot of these bombs still undiscovered and very dangerous. Such locally made bombs were set to detonate if anyone tried to disable them. There are trained and experienced police and army bomb disposal teams but these devices are still very dangerous and unpredictable.

January 15, 2021: The U.S. confirmed that it had reduced its forces in Iraq to 2,500 troops.

January 13, 2021: The U.S. announced sanctions on the chief-of-staff of the Iraqi PMF militias, declaring the PMF official a supporter of international terrorism and loyal to Iran, not Iraq. This is the second PMF official to be so designated in the last week. Many of the PMF gangs, especially the Iran-backed ones, are concentrating on making money rather than making Iraq safe for Iraqis. The criminal militias often make money via smuggling or providing guarded border crossings where smugglers can pay a fee to get past. This works best on the Syrian border because there are a lot of Iran-backed militias in Syria. This “smuggler’s gate” scam works less well on the borders of Iran, Turkey, Kuwait, Jordan and Saudi Arabia.

Turning partisan militias into military and political instruments is an ancient tactic and one that Iran favors. After of in part because Iran was rapidly turning the entire PMF into an Iraqi version of the Lebanese Hezbollah organization called Kataib Hezbollah. Founded in the 1980s with Iranian help, the original Hezbollah still takes orders from Iran and has dominated Lebanese politics for over three decades. Most Lebanese want Hezbollah gone but a heavily armed militia with enormous economic power in Lebanon is difficult to disband. Iraqis want Kataib Hezbollah gone now and cannot understand why their prime minister does not act. Fear probably has a lot to do with the delay. In Lebanon Iran had several senior Lebanese politicians assassinated for being too openly hostile to Hezbollah. The personal danger for the Iraqi prime minister is based on fact, not just speculation.

January 11, 2021: In the west (Anbar province) just across the border in Syria (Deir Ezzor province) unidentified UAVs fired eight missiles at Iranian forces near the Syrian side of the Al Bukamal crossing into Iraq. Night attacks by unidentified jets and UAVs in this area are believed to be the work of the Americans. These attacks, which no one takes credit for, have been more frequent in the last few months.

January 7, 2021: In the west (Anbar province) just across the border in Syria (Deir Ezzor province) an unidentified UAV fired at least one missile at a truck transporting about ten members of an Iran-backed Iraqi militia. The vehicle was crossing the border on a road near the Al Bukamal border crossing. Four men in the truck were killed and several wounded.

January 6, 2021: A military parade was held in the Baghdad Green zone to celebrate the 100^th anniversary of the Iraqi Army. There was a flyover of 23 Iraqi F-16s and new military equipment including newly arrived South Korean Promoter 4x4 armored truck for police patrols in hostile territory.

January 5, 2021: Israel is sending an Iron Dome battery to its Red Sea coast and may deploy other anti-missile systems there as well. Israel believes that an Iranian attack from Yemen or Iraq is more likely than one from Syria, where the Israeli military is free to attack Iranian military preparations.

December 31, 2020: A Greek oil tanker at anchor off Iraq was found to have an Iranian limpet mine attached. The mine was attached to the hull by a diver dropped off at night from one of the armed Iranian speedboats that move through the area at all hours. Another Iranian speedboat then came along and picked up the diver. Iran has been using these tactics since 2019 when the Iranians were caught using limpet mines and other weapons against tankers entering the Persian Gulf. Iranians were caught on camera placing and removing the limpet mines on tanker hulls. These mines use magnets to remain on the hull and are detonated by timer or remote control. More armed guards are being hired to scan for such mines and to stand watch at night and fire on any small boats that approach a tanker at night. Iran denies they are using these mines but the video and past performance say otherwise.