Iraqis Protest in Response to Economic Instability

Recent policies imposed by the US have led to the instability of the Iraqi dinar; Baghdad is leaning toward cooperation with the US in order to stabilize the country’s economy as well as its security situation

Hundreds of protesters took to the streets of Baghdad on Wednesday to protest the high cost of living in Iraq that has resulted from the instability of the country’s currency, which hit a new low of 1,670 Iraqi dinars to the dollar last Friday. The value of the dinar is expected to continue to deteriorate.

The declining value of the dinar is attributed both to the administration of the country’s new prime minister, Mohammed Shia’ al-Sudani, who has not been able to stabilize the currency, as well as to a new policy from the US Federal Reserve. In a recent attempt to enforce sanctions on Russia and Iran, the US severely limited the flow of dollars into Iraq, which caused the recent drop in the value of the dinar.

Sudani and Foreign Minister Fuad Hussein are set to visit Washington soon to discuss both the country’s economic situation and the cooperation agreements between the two countries. The upcoming visit indicates an Iraqi realignment toward the US for both economic and security stability.

Rhiannon Phillips, an intelligence analyst at the Sibylline risk consultancy firm who focuses on the Middle East and North Africa, told The Media Line that the Iraqi leaders’ visit to Washington “will likely sustain the outbreak of protest activity in central and southern provinces, namely Baghdad.”

The unrest will most likely continue to develop in the coming days, Phillips said.

Romy Nasr, an Iraq-based conflict analyst and stabilization adviser with a focus on the Middle East and North Africa, told The Media Line that brief but violent clashes between demonstrators and security forces are likely due to the government’s apparent inability to address the citizens’ grievances.

Baghdad has been opting for a more open relationship with the West

The participation of the supporters of Muqtada al-Sadr, leader of the Shiite Islamist Sadrist Movement, would probably increase the risk of escalating violence at the protests, Nasr said. She points to riots and use of firearms as potential risks.

According to Nasr, opposition to the government in Iraq appears to be growing. In the meantime, “Baghdad has been opting for a more open relationship with the West,” she said.

In an interview with The Wall Street Journal last week, Sudani said that he supports the presence of the US troops in the country as a means of training the Iraqi army to better address the threat of ISIS in Iraq. “We think that we need the foreign forces. Elimination of ISIS needs some more time,” he said in the interview.

In 2017, Iraq officially declared victory over ISIS in its territory, and in January 2020, the Iraqi parliament took a symbolic vote to oust foreign military forces from the country. But Sudani, who took office in October 2022, apparently intends to improve Iraq’s relationship with the US.

“There is a realistic probability that al-Sudani is taking an increasingly pragmatic foreign policy approach, while also recognizing the need for advisory roles in the security sphere against terrorist cells to mitigate terror-linked threats,” Phillips said.

She noted that Sudani’s comments “certainly employed a more tolerant attitude toward foreign intervention than previous leaders of Shi’a parties.”

Sudani stressed on several occasions that it is possible for Iraq to have favorable relations with both Iran and the US. According to Nasr, Sudani hopes to turn Iraq into a strategically impartial actor in the region.

Nasr made clear that such a transition would require investment on the part of Iraq.

“More capacity building and assistance are required, reforms are needed, infrastructure reconstruction is crucial, and lastly and importantly, security stability” is needed, she said. Iraq needs stronger alliances in order to achieve these goals and, given the lack of Iranian capability to meaningfully assist Iraq, Iraq is turning toward the West, Nasr explained.

According to Nasr, Sudani is aware that if closer ties with Iran come at the expense of relations with the West, it will lead to the isolation of the country.

As expected, Sudani’s comments openly supporting US military presence in Iraq received a considerable amount of backlash from Tehran-backed militias, including the Fatah Alliance and Hizbullah, as well as from opposing political figures, such as those loyal to Shiite leader Muqtada al-Sadr, who are opposed to any foreign influence in the country, Phillips said.

Sudani’s comments therefore “represent a contentious point among most political leaders and Iraqis themselves, as heightened anti-US sentiments have become a common narrative in recent years, amid deteriorations in domestic and economic stability,” she said.

Sudani points to the threat of ISIS to explain his support for a US military presence. The position of ISIS in Iraq has shifted over the years, and the declared victory over ISIS in Iraq in 2017 does not mean that the threat has been totally eradicated. The victory “does not entail that ISIS cells were eliminated. But ISIS was dismantled, and all their networks were interrupted. Hence, any action taken by ISIS now is not a coordinated one and it is usually an individual initiative,” Nasr explained.

In light of recent developments that affect Iraq’s security, including the shifting position of ISIS in Syria, there are concerns that ISIS may enter Iraq through Syria and regain power, Nasr said.

Besides the risk of ISIS entering through Syria, Iraq’s security situation also is affected by ongoing military operations by Turkey and Iran in northern Iraq and Syria, according to Phillips, which have “hindered local counterterrorism operations and intelligence gathering.”

There is a realistic probability that al-Sudani is taking an increasingly pragmatic foreign policy approach, while also recognizing the need for advisory roles in the security sphere against terrorist cells to mitigate terror-linked threats

Recent strife between Baghdad and the Kurdistan Regional Government that controls the autonomous Kurdistan Region in Northern Iraq also have played a part in undermining joint security frameworks, Phillips said. She noted that institutional corruption and gaps in funding have also significantly impaired the effectiveness of Iraq’s security forces.

According to Phillips, recent ISIS attacks in Iraq have primarily targeted local security personnel and other militant groups, “but an uptick in successful attacks elevates the likelihood of a return to the targeting of soft targets, such as civilians.”

Nasr said that ISIS still has fortifications in the Al Anbar province in Western Iraq and has shown signs of strength in the country’s north. ISIS also claimed responsibility for recent bombings near Baghdad, she said.

“Such assessment could also explain the reason behind the need to keep on receiving international assistance in Iraq given that the Iraqi security actors are still not ready to respond to such threats alone,” Nasr said.