Iraq Weekly Summary - Security and Political News

Read the full details in this weeks Iraq Summary from Grid North where we dig a little deeper into Iraq's economic and security landscape!

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Prime Minister Mohammed Shia Al-Sudani has awoken to a required shift in Iraq’s economic policy, acknowledging that the state's heavy reliance on public sector employment and a state-controlled economy is unsustainable, His apparent revelation comes at a time of declining oil revenues and mirrors economic reforms undertaken by socialist nations such as China and Vietnam in previous decades.

Al-Sudani's call for economic diversification is a step toward addressing Iraq’s dependence on oil; however, rampant corruption and bureaucracy remain significant obstacles to meaningful reform and Iraq continues to lag behind its regional neighbours, such as the UAE and Qatar, who have built business-friendly environments free from such issues.

Iraq’s persistent failure to tackle these structural problems could impede private sector growth and foreign investment, both vital for long-term stability and prosperity.

Economic challenges persist, with macroeconomic indicators such as currency stability, GDP growth, and unemployment raising concerns. Additionally, Iran’s non-oil exports to Iraq have surged, indicating a super-charging of economic ties. Iranian exports to Iraq have grown 71-fold over the past 20 years, encompassing a broad range of products, particularly agricultural and industrial goods. Iran now accounts for 20% of Iraq’s imports, reflecting strengthened economic and geopolitical bonds between the two nations, despite international sanctions and regional instability.

 The security situation in Iraq remains volatile, with continued terrorist activity, geopolitical tensions, and internal crime. On 10th September, an attack on the US compound in Baghdad, continues to be investigated but has now been attributed to Iran-backed militias, who continue to operate with relative impunity.

Border security incidents are also prevalent, with clashes on 18th September between Iraqi border forces and arms smugglers near Diyala Governorate resulting in one death and several arrests.

Cooperation between Iraq’s security forces and the Kurdistan Regional Government (KRG) remains a key element in counter-terrorism operations. On 17th September, a joint operation in Sulaymaniyah led to the arrest of two terror suspects, the destruction of terrorist hideouts, and the safe detonation of explosive devices.

However, ISIS activity continues, with multiple incidents throughout mid-September, including attacks on Iraqi security personnel in Kirkuk and Salah al-Din, and suicide bomb attempts in Kirkuk.

 The close ties between Iraq-based groups and the broader "Axis of Resistance"—including Hezbollah in Lebanon, Iran, and Ansar Allah in Yemen—remain strong. The Al-Nujaba movement, an Iran-backed militia, recently expressed solidarity with Hezbollah following the attack on communication pagers used by Hezbollah on 17th September.

The incident likely to result in more coordination between these factions in their opposition to Israel and the US, with Iran facilitating operational planning and intelligence sharing among its allied groups.

Tensions between Turkey and Kurdish factions continue to escalate. Turkish airstrikes in northern Iraq targeted Kurdish Workers’ Party (PKK) positions in Erbil and Dohuk provinces from 13th-17th September. Turkish operations have drawn criticism from local populations, with reports of attacks on Turkish military vehicles by civilians in Duhok an example of growing public dissatisfaction with the Turkish military presence.

 Iraq continues to navigate a balance between its relationships with Iran, the US, and other regional powers. The establishment of Hamas and Houthi offices in Baghdad, as reported by The New York Times showing that the scales of central government are tilted towards Tehran’s interests.

Iraq is making strides toward modernising its military capabilities, with plans to acquire South Korea's M-SAM air defence missile system in a deal worth approximately $2.63 billion. This follows the country’s recent efforts to diversify its military suppliers, transitioning from Russian hardware—hampered by supply chain disruptions following the Russian invasion of Ukraine—to South Korean and potentially US systems.

On the social side, protests erupted in various parts of the country on 16th September, driven by frustrations over unemployment and government employment policies. In Nasiriyah, demonstrators excluded from recent job opportunities clashed with riot police, escalating tensions. Protests over salary scale reforms also took place in Basra, with demonstrators blocking key transport routes. employment issues, exacerbated by widespread corruption.

To summarise, Al-Sudani's recognition of the unsustainability of the current state-controlled economy represents a positive political shift. However, meaningful progress will depend on the government's ability to combat entrenched corruption and inefficiency, which continue to stifle private sector growth.

On the security front, the enduring influence of Iran-backed militias and the ongoing threat posed by ISIS complicate Iraq’s efforts to maintain internal stability and regional security. As Iraq strengthens its military capabilities, its geopolitical alliances and internal socio-political dynamics will remain key areas to watch.

19th September Iraq report.pdf

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