Key Insights on the Changing Dynamics in Iraq’s Economy
Economist Abi Yasser Al-Husseini has indicated that the increasing American pressure on Iranian enterprises could potentially open avenues for Gulf and Turkish firms to expand their foothold in the Iraqi market. This shift may lead to significant transformations in the country’s economic landscape in the months ahead.
In a recent discussion, Al-Husseini noted, “The Middle East has been the battleground for intense economic rivalries for years.” He pointed to Washington’s strategy of using sanctions and economic warfare to further its regional objectives, which is having immediate repercussions on Iraq.
He cautioned that these policies could adversely impact Iraq, particularly in the services sector, especially in electricity, predicting that the U.S. sanctions could exacerbate the existing crisis by summer.
Al-Husseini elaborated that “the intensified restrictions on Iranian companies, along with hindrances preventing them from accessing their trading revenues with Iraq—specifically in the fuel sector—will pave the way for Saudi and Turkish companies, backed by American support, to bolster their presence in Iraq.”
Despite the geographic advantages and cost-effectiveness of Iranian goods within the local market, Al-Husseini asserted that Iran seems insufficiently equipped to tackle the decline of its market share in Iraq.
“Iraq is poised to witness notable economic shifts in the forthcoming period, as new players are set to enter the commercial arena,” he stated.
Historically, Iraq has served as a competitive landscape for both regional and international powers, showcasing a diverse array of products and companies from various nations since 2003, with Iran, Turkey, and Gulf states being significant contributors in response to the evolving political and economic dynamics influenced by successive governments and external relations.
Impact of U.S. Pressure on Iranian Enterprises
In recent times, Washington has escalated its economic constraints on Iran through a series of sanctions that have directly affected Iranian firms operating in Iraq. These measures include limiting financial transactions and obstructing Baghdad from settling its gas and energy debts to Tehran in dollars. Consequently, this has led to a significant crisis in the Iraqi electricity sector, which heavily relies on Iranian gas.
Anticipated Changes in the Iraqi Economic Framework
The sustained U.S. pressures on Iran, alongside an increasing presence of Turkish and Gulf entities, are expected to bring about a notable paradigm shift in the Iraqi economy in the near future. Iraq now faces the possibility of forging new partnerships that may enhance competitive dynamics among regional players. However, this could also result in complex economic challenges stemming from a reliance on vital energy resources that could diminish significantly.
