Iraqi cabinet excluding either Sadrists or Hashd would raise risks of intra-Shia violence across southern provinces and Baghdad

Iraqi Prime Minister Haider al-Abadi meets Shia cleric Muqtada al-Sadr in Baghdad on 20 May 2018.

Sabah Arar/AFP/Getty Images

A coalition between Iran’s current and potential rivals, namely, Sadr, Wataniya, the KDP, the Sunnis of Qarar Iraqi, and Hawiyatuna would garner 122 seats. It would further Sadr’s credentials as a nationalist, non-sectarian leader. A coalition between Iran’s allies – namely, Nouri al-Maliki, the Popular Mobilisation Units (PMUs) and Hakim – would obtain 91 seats. Neither would have enough for the 165 seats needed to form a cabinet, pointing to extended paralysis.

Prime Minister Haider al-Abadi’s 42 seats, assuming he can control them, will be the kingmakers. Abadi is more likely to aim for a national unity government, in which he preserves his role as prime minister, than to attempt something that risks destabilising the country, for example, by excluding either Sadr or Iran’s allies. However, this will likely require several months of negotiations, during which disagreements between the rivals would be likely to intensify due to a host of reasons.

Sadr would be likely to characteristically resort to protests to demand a greater share in the cabinet, or a technocratic cabinet. There would also be an elevated risk that Iran’s allies would engage in assassinations and street fighting against their rivals in Sadr’s Salam Brigades, and against Ammar al-Hakim’s militias, which have a disproportionately large role in securing the southern infrastructure, in order to keep them in line.

In addition, the PMUs are likely to start turning a blind eye to the Islamic State, allowing it to conduct some operations in Baghdad, if they assessed that Abadi was willing to abandon them. These conflicts, if they spread, would probably lengthen the paralysis further, in addition to raising death and injury risks in southern Iraq.

Outlook and implications

IHS Markit assesses that Abadi’s first priority would be to form a national unity cabinet that includes both factions. There are multiple obstacles to that, not least the hostility among the factions and their potential refusal. If such a cabinet is formed, it would replicate previous cabinets, failing to bring about a political resolution on the long-standing territorial dispute with the Kurdish Regional Government (KRG), being vulnerable to continued attempts by Iran to use Iraq’s infrastructure and financial sector to further its regional objectives and to circumvent sanctions, and placing Iraqi institutions at risk of new targeted US sanctions as a result. The dispute with the Kurds over federal budget transfers to the KRG would continue, even though the formation of a government would coincide with a short-lived agreement that transfers some funds to the KRG as a one-off. An early-warning indicator that this scenario is becoming more likely would include meetings between Abadi and Iranian, Saudi, and UAE officials, given that a unity government would be a negotiated settlement requiring the approval of patron states.

Our second scenario is for Abadi to join Sadr in an anti-Iran cabinet with a narrow parliamentary majority. In this scenario, Iran’s allies would almost certainly respond with violence calibrated to undermine the new government, or, better yet, prevent the rival coalition from even forming a government, while avoiding the risk of a full-scale confrontation with the United States. This would involve a combination of assassinations against MPs on Sadr’s and Abadi’s lists, their associates, and their security personnel; permitting Islamic State combatants to access Baghdad in order to target government buildings using checkpoints they control; armed confrontations with Sadr’s militias in both Baghdad and southern provinces; attempts to turn commanders of the Iraqi security forces to their side; attacks against coalition forces, using local actors to avoid a direct confrontation; and other similar measures aimed at discrediting and weakening their rivals. Moreover, there would be a severe risk of Iraqi military units aligning with militias that they view as comrades in arms, against coalition troops and the Iraqi government, which they would view as highly corrupt. The defecting military units would be likely to remain limited to the few which are closely affiliated to the PMUs. Finally, there would be higher risk to Western commercial interests in southern Iraq, with personnel at risk of kidnapping and/or assassination, and both retail and oil and gas assets at risk from rioting and attacks by locals. An early-warning indicator that this scenario is becoming more likely would be an increase rhetorical hostility between Abadi and Maliki, culminating in their failing to unite under the banner of the Dawa Party.

Our third scenario would involve either Abadi and Maliki reunifying the Dawa Party to form a pro-Iran coalition, or Iran using threats and incentives to bring approximately 50 MPs from Abadi’s and Sadr’s lists to its side to reach the 165 MP threshold. If Iran’s allies could assemble such a coalition, its first moves would be: to issue an official request for the US and the coalition to withdraw from Iraq; to use Iraq in order to limit the impact of sanctions on Iran by ensuring access to Iraq’s oil and financial sector; to assassinate politicians and security personnel viewed as disloyal, especially Sadrist militia leaders; and to favour Chinese, Russian, and other non-Western companies in contracts, particularly in the shipping and oil and gas sectors in order to reduce Western commercial influence over Iraq. However, such a government would probably favour some European firms whose countries support the nuclear agreement, such as France, Germany, and the UK. Moreover, if Sadr assessed that the tide was turning against him, there would be a moderate likelihood of him switching sides in order to maintain the benefits he and his allies obtain from participating in government. An early-warning indicator that this scenario is becoming more likely would include reports of increased direct Iranian influence in coalition negotiations, such as the Commander of the Quds Force Qassem Suleimani meeting individual MPs.