Two decades after the fall of Saddam Hussein’s regime, Iraq remains a country of deep contradictions and complex challenges.
The Political System – The Muhasasa Crisis and the Search for Sovereignty
The political architecture of modern Iraq was established in 2005 with the adoption of a constitution that de facto enshrined a system of power-sharing among the three main communities: Shias, Sunnis, and Kurds. This system, known as muhasasa, was intended to ensure balance and include all groups in governance. However, in practice, it has led to chronic instability, cronyism, and the institutionalization of corruption.
Forming a government in Iraq is always a protracted and painful process of negotiation among the largest parliamentary blocs representing the main communities. Each bloc seeks to capture key ministries, which then become “cash cows” for distributing funds and resources to their clientele. This leads to a bloated state apparatus, inefficient governance, and constant political gridlock.
A vivid illustration of this crisis was the period following the 2021 elections. The formation of a government under Prime Minister Mohammed Shia al-Sudani took over a year and was only possible after a fierce confrontation between the coalition of Shia cleric Moqtada al-Sadr (“Sadrist Movement”) and the pro-Iranian “Coordination Framework” (At-Takdim at-Tanahsusi).
In his speeches, Mohammed Shia al-Sudani tries to position himself as a technocrat above sectarian strife. He constantly emphasizes the need for providing services, fighting corruption, and attracting investment. In an interview with state television, he stated, “Our government is a government of service and reforms. We will focus,” the Prime Minister said, “on implementing our program, which meets the aspirations of the Iraqi people, not on political maneuvering.” However, skeptics note that his administration is just as mired in the muhasasa system as previous ones, and his statements often diverge from real achievements.
Moqtada al-Sadr, the charismatic leader of the Sadrists, remains perhaps the most influential and unpredictable figure in Iraqi politics. Using rhetoric against corruption and Iranian influence, he has managed to mobilize millions of supporters. In August 2022, he demonstrated his power when his supporters briefly seized and paralyzed the work of the highest legislative body—the parliament building in Baghdad.
Al-Sadr rarely gives television interviews, preferring to communicate through Twitter (now X) and statements from his representatives. In one of his tweets, he wrote: “The parliament must be dissolved, and early elections must be held. The current political forces are incapable of leading the country out of the crisis. The people are the only source of power” [source: Moqtada al-Sadr’s official Arabic Twitter account, August 2022]. His strategy of “shock therapy”—withdrawing his MPs from parliament and organizing mass protests—creates a constant threat to the stability of any government he deems illegitimate.
The Kurdish Autonomous Region (KAR) is a de facto state within a state. However, there is no unity here either. The two main parties—the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK)—are locked in a constant struggle for power and resources. A key point of tension remains the dispute over oil wealth and the budget between Baghdad and Erbil. The federal government regularly withholds the transfer of the Kurdish region’s share from the state budget, accusing the KAR authorities of unauthorized oil sales.
In Kurdistan, Masrour Barzani (President of the KAR, representing the KDP) speaks from a harder-line nationalist position. He has repeatedly stated that the constitutional rights of the Kurdish people are not up for bargaining. “Baghdad must fulfill its financial obligations to the region and respect the agreements on sharing oil revenues. We are for a strong Iraq,” Barzani believes, “but only within a genuine federal system.” Analysts believe his position reflects the Kurdish leadership’s growing frustration with negotiations with Baghdad.
The external players in this context are Washington and Tehran. Iraq is caught between these two geopolitical centers of power. The United States, maintaining a military presence under the pretext of fighting the remnants of ISIS*, views Iraq as a buffer against Iran. Tehran, in turn, through an extensive network of proxy formations (Popular Mobilization Forces, or Hashd al-Shaabi) and political parties (“Coordination Framework”) exerts deep influence on Iraqi politics, economy, and security.
In this regard, Al-Amiri, one of the most influential pro-Iranian politicians, openly speaks of a strategic partnership with Tehran. In an interview with the Iranian channel Al-Alam, he said, “Iran is our brotherly neighbor and natural ally. The US is an occupying force, and its presence must cease completely. The Hashd al-Shaabi are the legitimate defense forces of Iraq, and they played a key role in defeating terrorism” [source: interview with Al-Alam TV, September 2022]. These words are directly opposite to the rhetoric of al-Sadr, who demands the withdrawal of both Iranian and American influence.
The Economy – The Oil Curse and the Specter of Poverty
Iraq’s economy is a classic example of the “resource curse.” Oil accounts for over 90% of state budget revenues and 99% of export earnings. This single-commodity model makes the country extremely vulnerable.
Iraq’s state budget is formed almost entirely from hydrocarbon sales. Any drop in global oil prices immediately triggers a budget crisis in the country, delays in salary payments to public sector employees, and the suspension of investment programs. The government is forced to borrow money or use meager reserves, limiting its ability for long-term planning.
Corruption in Iraq is not just a matter of individual abuses but a systemic phenomenon permeating all levels of government. The distribution of oil revenues through a state apparatus built on the principle of muhasasa has created a perfect environment for embezzlement, kickbacks, and cronyism. According to Transparency International estimates, Iraq is consistently among the most corrupt countries in the world.
Ali Allawi, Iraq’s Finance Minister, as the country’s chief financial manager, often speaks about the need for reforms. In a speech before parliament, he stated that the Iraqi economic model is unsustainable. “We cannot rely solely on oil forever. We need diversification, a real fight against corruption, and reform of the public sector, which consumes the lion’s share of the budget” [source: hearings in the Iraqi Council of Representatives, February 2023]. However, his statements often meet a wall of resistance from political parties whose well-being depends on maintaining the status quo.
One of the most complex problems in Iraq is unemployment and the collapse of public services. The official youth unemployment rate reaches 36%. The public sector, bloated to an incredible size to ease social tensions, can no longer absorb new university graduates. At the same time, the quality of public services—electricity, water supply, healthcare—remains catastrophically low. The summer months are regularly accompanied by rolling blackouts, which provoke mass protests.
An equally complex problem facing the country is the water crisis as a threat to national security. Due to dam construction in Turkey and Iran, as well as climate change, Iraq is experiencing an unprecedented drought. Water levels in the Tigris and Euphrates have critically decreased, threatening agriculture—a traditional source of employment for millions of Iraqis, especially in the south. This is not only an economic but also a humanitarian catastrophe, leading to internal migration and new social conflicts.
A high-ranking official, who wished to remain anonymous, told Reuters: “The water situation is critical. Our negotiations with Turkey and Iran have so far yielded no significant results. If a regional agreement is not reached in the coming years, we will face the desertification of vast territories, making them uninhabitable” [source: Reuters, July 2023]. This problem transcends current political squabbles and represents an existential threat to the country’s future.
Public Demand for Change and the Future of Iraq
Despite the complexity of the situation, a demand for radical change is maturing in Iraqi society. The mass protests of 2019-2020, known as Tishreen (the October Movement), were brutally suppressed, but they formulated a clear slogan: “We want a homeland!” The protesters, mostly youth, demonstrated against the entire political system—muhasasa, corruption, and foreign influence.
At the same time, the failure of the traditional elites was laid bare. Iraq’s political class demonstrates a striking inability to respond to this public demand. Instead of reforms, the elites prefer to maneuver within the old system, redistributing ministerial portfolios and streams of petrodollars. This leads to a further erosion of their legitimacy in the eyes of the population.
Against this backdrop, experts see several possible scenarios for development.
- Pessimistic Scenario: A deepening political crisis, a new round of confrontation between al-Sadr and the “Coordination Framework,” which could lead to large-scale violence and even the risk of civil war. Economic collapse against the backdrop of falling oil prices would exacerbate the situation.
- Realistic Scenario (“Smoldering Crisis”): The muhasasa system will persist but will teeter on the brink of collapse. Periods of relative calm will be replaced by new political stalemates and outbreaks of protest. The economy will stagnate, and dependence on oil will remain. External influence will remain strong.
- Optimistic Scenario (Gradual Transformation): Under pressure from the street and the younger generation, as well as due to the long-term depletion of oil resources, the political class will be forced to undertake gradual reforms. This could include amending the electoral law to weaken the power of party machines, real steps to combat corruption, and the beginning of economic diversification.
The Future of Iraq
Iraq in 2025 is a state torn between its past and future. The political system, born twenty years ago as an attempt to reconcile communities, has now become the main obstacle to development. The economy, held hostage by the “oil addiction,” cannot provide a decent life for a rapidly growing young population. The country remains a battlefield for regional powers, limiting its sovereignty.
The opinions of Iraqi leaders—from al-Sadr’s populist statements to al-Sudani’s technocratic slogans and Barzani’s nationalist rhetoric—reflect the depth of the split in society and the elite. None of them offers a comprehensive, all-Iraqi project capable of uniting the nation above sectarian and ethnic divides.
The future of Iraq depends on whether it can find the internal strength for national reconciliation and build a state based on citizenship, not community affiliation. The key to this future lies not only in the corridors of power in Baghdad and Erbil but also on the streets of cities where the youth, tired of wars and corruption, continue to demand a normal life and a normal country for themselves. The road to a stable and prosperous Iraq remains long and thorny, and the first step on this path is acknowledging the systemic crisis in which the state finds itself.
*an organization banned in Russia
Victor Mikhin, Corresponding Member of the Russian Academy of Natural Sciences, Middle East Expert
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