Iran’s chances are large in the Iraqi parliament .. Will it be able to save it from sanctions?!
In the series of US sanctions on Iran and its entry into force, US President Donald Trump has confirmed that it is the most severe ones , that it will reach a higher level in November and warned anyone who deals with Iran that he will not be able to deal with the United States.
US sanctions on Iran included two packages, the first freezing financial transactions and imports of raw materials, and the sectors of cars and commercial aviation.
The sanctions against the Iranian government also prohibit the purchase or possession of US currency, Tehran’s precious metal trade, Iranian currency transactions and activities related to Iran’s sovereign debt issuance. The second package will be carried out in November and will reach a higher level of risk.
Sanctions on Iran and its Implications for Iraq:
The financial adviser, Mudher Muhammad Salih says that the US sanctions imposed on Iran will negatively affect the Iraqi economy. He added that the Iraqi market consumes large quantities of Iranian goods of agricultural nature , cars , foodstuffs, building materials , etc. The Iraqi markets are full of Iranian goods, both food and non-food.
The Iraqi researcher Basim Antwan that in the first stage , the repercussions of Iran’s sanctions will not be shown on the Iraqi market, given the availability of Iranian goods, but later it will be difficult for Iraq to compensate these goods at competitive prices, Antwan added that Baghdad will look for other sources in neighboring countries to compensate goods but it will take some time.
Between 2 million and 3 million Iranians visit holy sites in Karbala and Najaf, and each tourist pays $ 40 in fees for a permit to enter Iraq.
The Iraqi markets rely very heavily on Iranian products, which will lead to a severe recession of these markets, under the application of US sanctions, Abbas Makhilaf (Iraqi merchant of electrical appliances) says that Iraq has factories that import spare parts from Iran, and will stop completely because of sanctions, pointing out that the raw materials from Iran cheaper than any other country, due to the proximity and exchange rate difference.
Iran exploits the Iraqi economy:
Iraq’s geographic privacy and its relationship with Iran will make the Iraqi economy an outlet for Tehran to escape US sanctions. Iran will rely more on Iraq and rely on its arms in the Iraqi state and its loyal militias.
All this has made Iran exploit the Iraqi markets and the Iraqi economy in particular to get out of its stifling crisis. The Iraqi armed militias, known for their loyalty to Tehran, threatened that they would break the sanctions and provide Iran with the aid needed to disperse the impact of US sanctions.
Economically, a number of banks and major banking companies in Iraq have stopped banking transfers with Iranian banks, which has a major impact on the Iranian economy. Iraq is Iran’s “commercial lung” as it is called by specialists. The volume of trade exchange between the two countries last year was more than 13 billion dollars, according to Tehran’s ambassador to Baghdad, Irj Masjidi, to be ranked first among all other trading partners of Iraq.
An expert in the field of currency handling Abdul-Hassan al-Lami stresses: The remarkable activity of groups working to buy the dollar in a fake Iraqi currency.
He added that the activity of these groups emerged after the imposition of US sanctions on Tehran recently, and that they – the groups – working freely and in coordination with senior officers in the Iraqi Ministry of the Interior, ending to confirm that the secret of the strength of the movement of Iran and its activity in Iraq is linked to the militias.
These militias are not only working for Iran at this level, according to Lami, but have threatened to kill a number of traders if they stop buying Iranian goods.
Iraq is buying large quantities of energy and electricity from Iran, and private Iranian companies stopped in the recent period, energy supplies to the province of Basra in southern Iraq, causing a crisis and demonstrations in the province.
On the other hand, many economists warned from suspicious operations carried out by Iran, to get dollars from Iraq, and led to the devaluation of the dinar, after the Iranian currency became worthless, following the application of Iraqi banks to the US sanctions decision.
Iraqi economists attribute the devaluation of the Iraqi dinar against the dollar to the purchase of the hard currency by Iranian traders through their agents in Iraq, from the Iraqi markets to face US sanctions by banning dealing with Tehran in dollars, warning of methods aimed at dumping the Iraqi market in counterfeit local currency to buy the dollar, that the Iranian riyal is worthless in transactions inside and outside Iraq.
This is one of Iran’s malicious methods. The other method is to double the drug trade and inject large quantities of narcotics into the Iraqi market, in order to get Iran through the dollar.
In addition, well-informed sources pointed out that several Iraqi investors in Iran suffered heavy losses after the fall of the Iranian currency and were exposed to fraud by those banks that announced a 15% interest on the fixed deposit by promoting that Iranian banks are Islamic ones and not against Islamic Sharia (law) so hundreds of Iraqis deposited billions of dollars in Iranian banks, through their branches inside Iraq, in addition to some Iraqi banks.
For its part, the Central Bank of Iraq sent an official letter to all Iraqi authorized banks, not to deal in dollars with Iranian banks.
The deputy governor of the bank, Munther Abdul Qadir al-Sheikhli stresses that in an official document addressed to all Iraqi banks, which included guidance: The Board of Directors of the Central Bank decided to continue to ban the dollar deal with branches of Iranian banks.
He added “With regard to the euro, it is up to the requirements of dealing with European Central Bank and European banks to deal with the euro.
Experts see “This move to abandon the US currency will have a negative impact on trade between the two countries , noting that it would be difficult to maintain the trade level under the sanctions imposed on Tehran.
With regard to Iran’s incursion into the government, observers believe that US sanctions on Iran are directly proportional to the increase in its weight in Iraq and its role in forming the Iraqi government, especially after the announcement of the results of the elections, which were re-counted manually after the rigging and destruction of the votes of voters.
Observers believe that Iran is seeking greater economic gains in Iraq, to compensate for the embargo imposed by the US sanctions, which began to apply, using the Iraqi elections pressure paper to revive its position through its allies of the winning candidates.
The political analyst, Ahmad al-Abyad, says the American pressure on Iran increases , certainly the Iranian space in Iraq is not easy, and trying to invest it to ease the pressure on the internal situation, it is very clear that it uses the Iraqi elections pressure paper internally and externally in an attempt to form a government close to it, so that Iraq becomes a lung to ease the blockade on it, Iran’s chances in the Iraqi parliament is large, as they have about (80-90) ally candidates and vote for its projects, and the equation will not be easy.
Shatha Khalil *
Economic Studies Unit
Rawabet Center for Research and Strategic Studies