A fistful of dinars


ISTANBUL—The U.S. government isn’t the only one worried about the growing influence of Iran in Iraq. Baghdad’s neighbors are fretting, too—and so are some moderate Shiites in Iraq. They fear Iran’s help is a mixed blessing, of a type that will keep Iraq poor and dependent on Tehran.

“Shia themselves feel Iran has not done enough for Iraq,” said a senior Iraqi official, speaking on condition of anonymity. He explained that the Maliki government would like to see Iran playing a less sectarian and more helpful role in Iraq.

As the U.S. Congress begins pushing timetables for troop withdrawals from Iraq, the question of how the struggling Iraqi government can manage its meddling neighbors becomes more pressing. Iraq wants to balance the growing power of Iran, in part because the Shiite-dominated government of Prime Minister Nouri Maliki fears that if Iran becomes too powerful or the factional violence too severe, Saudi Arabia will attempt to intervene on behalf of Iraq’s Sunnis.


To balance Iran, Iraq knows it desperately needs foreign help. But it fears foreign domination—economic as well as political.

Trade between Iran and southern Iraq has grown astronomically since the U.S. overthrow of Saddam Hussein. It was estimated at $3 billion a year ago and is growing rapidly. To the dismay of Iraqi nationalists, Iranian currency circulates in southern Iraq.

Along with its suspected covert aid to radical Shiite militias, Iran has overtly supported many Shiite charities in southern Iraq. But the Maliki government is wary of allowing the charities to become a fault line for social and political organization in Iraq. That smacks of “the Hezbollah model,” the official said, referring to how Hezbollah has risen to power in Lebanon by providing to the Shiite poor the social welfare services that the weak central government could not offer.

Iraqis also worry that their other main benefactor, the United States, having squandered fortunes in failed reconstruction aid, won’t be as generous in the future. Shiites believe Iraq’s richer Sunni neighbors are stepping into the power vacuum, currying favor with their co-religionists with suitcases full of cash.

Instead of foreign charity and foreign slush funds, the Iraqi government wants foreign investment—preferably multinational consortiums to dilute the political influence of any one of the potentially overweening neighbors. But that seems unlikely, certainly in the short term. Under the new petroleum law, which appears headed for approval by parliament, the central government would sign all oil deals, but regions would manage them. Kurdish, Shiite and Sunni regions are each reportedly discussing separate deals with foreign companies, and Tehran is trying to use its political influence to edge out China, which has already revived its $1.2 billion Saddam Hussein-era investment in Iraq’s fields.

Now, if the petroleum law passes and if oil deals are signed promptly and if the proceeds are quickly distributed equitably among to Iraq’s regions—three big ifs—it would unquestionably help. In the long term, oil wealth may be the only thing that could glue Iraq back together.

But in the short term, an oil rush is a dangerous thing for a country as balkanized as Iraq, with a government as weak as Maliki’s. The oil winners will grow politically influential, as foreign oil interests always do in developing countries. The oil losers will be resentful, and if they are neighbors, this could be dangerous. The Maliki government needs to make money fast, but it risks being perceived by the nationalist Iraqi public as having sold out to the foreigners.

It was, after all, the foreign sell-out factor that finally brought down the Shah of Iran. And Saddam Hussein stayed in power in part by boasting of keeping foreign paws off Iraqi oil, and by cleverly buying off some of the neighbors. For one thing, Hussein guaranteed Jordan a steady oil supply—which Jordan wants to continue. Syria also got Iraq oil at favorable prices (even during the period of U.N. sanctions, though Baghdad and Damascus both denied it.) Damascus would now like Maliki to reopen its pipeline. Saddam also made sure Turkey reaped some benefits from its position close to Iraq’s Kirkuk oil fields. When the Kurds control the region’s oil deals, won’t they hasten to cut Ankara out?

With the violence in Iraq at frightening levels, it’s natural to fear above all the disintegration of Iraq into Lebanese-style warring factions, each backed by a neighbor. But even if that outcome can be averted, there is still the danger of economic balkanization that could lead to political fracture—and conflict—down the road.

Solving Iraq’s political, sectarian, economic and regional problems is like working on a Rubik’s Cube—all the faces have to line up simultaneously. The good news is that the neighbors are so scared of an Iraqi abyss that they might just try to help. The bad news is that Iraq, its six neighbors and the United States will have to twist all the pieces in the same direction. And this is the Middle East.

Sonni Efron is a member of The Times’ editorial board.