For several years, officials in Baghdad have maintained a careful balancing act – taking some measures in response to US pressure to reduce Iran’s informal influence in Iraq, while maintaining strong bilateral ties with neighbouring Tehran.
This dynamic has constrained Baghdad’s ability to pursue domestic economic and security reforms, or chart a more autonomous foreign policy.
However, a combination of recent attempts to strengthen Iraqi state institutions, the upcoming withdrawal of US-led Coalition troops from Federal Iraq and the prospect of a US-Iran settlement could allow Baghdad to redefine its relationship with both Iran and the United States.
According to Iraq's Prime Minister Ali Falih Kadhim al-Zaidi, the new administration’s priority is strengthening the Iraqi state through a programme of institutional reform.
This includes improving Iraq’s access to the international banking system, strengthening the energy sector and trying to enforce a state monopoly over arms.
