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Opinion
October 19, 2018 www.intellinews.com I Page 21
ALACO DISPATCHES:
Stability in Iraq undermined by US sanctions attack on Iran
Yigal Chazan of Alaco
America’s reimposition of heavy sanctions on Iran following its withdrawal from the international nuclear deal risks undermining two of the central planks of Washington’s Middle East policy — the maintenance of stability in Iraq and the curbing of Iranian influence there.
The Baghdad authorities, concerned that Iraq may suffer collateral damage as a result of so-called snapback sanctions, are reportedly lobbying for exemptions. Yet while waivers might protect the country from unintended economic harm, they could also jeopardise US attempts to stem what it sees as Iranian belligerence.
In May this year, Washington withdrew from the 2015 nuclear deal (formally entitled the Joint Comprehensive Plan of Action, or JCPOA), which was drawn up to curb Tehran’s attempts to produce weapons-grade uranium. The Trump administration asserted that the deal failed to tackle Iran’s “malign influence” across the Middle East and its ballistic missile programme. The US is re-imposing sanctions to pressure Iran into renegotiating the agreement in order to address its perceived shortcomings.
The first batch of snapback sanctions came into force in August. They include restrictions on US dollar and Iranian rial transactions, trade in gold and other precious metals and the car industry. The second tranche, to be implemented from November 5, are more critical – the measures
A member of the Iraqi security forces hands pamphlets to voters in Nasarwasalam. The US and Iran are involved in a perennial battle for influence in Iraq’s government.
will hit oil, gas and petrochemical exports. They are Iran’s main foreign currency earners, without which its economy, already in recession according to the IMF, will nosedive.
Consequences felt already
Iraq is already suffering the consequences of renewed US sanctions. They have led to the rial losing around half its value against the dollar in the year to date, significantly devaluing Iraqis’ deposits in Iran’s banks – made when their neighbour’s economy was picking up under the nuclear agreement – and reportedly deterring many Iranians from visiting Shia pilgrimage sites in Iraq, an important source of revenue for the country.
The economic hardship could worsen as sanctions against Iran kick in. Iraq imported some $6bn of Iranian goods – from air conditioners, agricul- tural products to car parts – in the year to March, amounting to about 15% of the country’s overall imports last year. Much of the trade is conducted by private Iraqi companies which are said to have limited exposure in and to the US and therefore little fear of being sanctioned. Of greater concern for Baghdad are state enterprises engaged in con- struction, the motor industry and energy, with the latter the biggest focus of attention.
Iraq relies on Iranian natural gas and electricity imports for more than a third of its power. An April deal with Baker Hughes and General Electric