Updated January 10, 2019
Iraq and U.S. Policy
Iraq Looks to the Future
Political and Economic Agenda
In 2017, Iraqi officials declared victory in the country’s
The fight against the Islamic State unfolded along several
years-long military struggle against the Islamic State (IS,
ethnic, religious, political, and regional fault lines whose
aka ISIL/ISIS or the Arabic acronym Da’esh), but
contours hint at Iraq’s internal challenges. The fight against
unresolved issues involving governance, territorial control,
the Islamic State mobilized Shia Arab paramilitaries
resources, and security cloud the path ahead. The May 2018
(among others) and unfolded in areas inhabited, and in
national election for Iraq’s unicameral legislature, the
some cases disputed by, Sunni Arabs, Kurds, and other
Council of Representatives (COR), was carried out without
minorities. Sectarianism has diminished from its post-2003
major security disruptions, but the election’s disputed
highs, but some tensions remain. Iraqi leaders have
outcome delayed government formation. In October, the
attributed Iraq’s battlefield successes in part to cooperation
newly seated COR elected former Kurdistan Regional
among various forces, including military and
Government (KRG) Prime Minister Barham Salih as Iraq’s
counterterrorism services, local and federal police forces,
President. Salih, in turn, nominated former Oil Minister
PMF volunteers, and Kurdish peshmerga. It remains to be
Adel Abd al Mahdi, a Shia Arab, as Prime Minister-
seen whether such cooperation will last amid political,
designate. Lawmakers confirmed Prime Minister Abd al
security, and territorial rivalries. Activists and citizens,
Mahdi and some of his cabinet nominees on October 24,
including in Kurdish areas, stage periodic protests and
2018. As of January, most cabinet positions have been
demand better service delivery and an end to corruption. In
filled, while some remain subject to negotiations.
southern Iraq, demonstrations in August and September
2018 resulted in deaths, injuries, and property destruction.
Tensions between the national government and the KRG
remain in the wake of the KRG’s September 2017 advisory
Figure 1. Iraq
referendum on independence and the subsequent return of
Iraqi security forces to disputed territories. The paramilitary
Popular Mobilization Forces (PMF) created to fight the
Islamic State have yet to be fully integrated into national
security institutions. Groups and individuals associated with
the PMF, some of whom have close ties to Iran, won seats
in the 2018 election. The 116th Congress may consider
proposals for consolidating security gains made in Iraq
since 2014, and conduct oversight into how the Trump
Administration’s decision to withdraw U.S. forces from
Syria might affect stability and levels of violence in Iraq.
After the Islamic State
Iraq’s government declared military victory against the
Islamic State in December 2017, but counterinsurgency and
counterterrorism operations against the remnants of the
group are ongoing. Security conditions have improved since
2017, but IS fighters pose a continuing threat and have the
potential to regroup and escalate insurgent activities.
As the Islamic State lost ground from 2015 to 2017, its

fighters left destruction, displacement, and division in their
Source: CRS, using ESRI and U.S. State Department data.
wake. Explosive ordnance and infrastructure damage
National and KRG Elections in 2018, Provincial
complicate civilian returns, with volatile interpersonal
Elections Delayed
divisions remaining between those who fled or fought
against the Islamic State and those accused of collaboration.
Iraq held national legislative elections for the 328-seat COR
Economic and humanitarian conditions remain difficult in
on May 12, 2018. Turnout was lower in the 2018 COR
many areas, and more than 1.9 million individuals remain
election than in past national elections, but the United
internally displaced. The durability of battlefield successes
Nations Assistance Mission for Iraq (UNAMI) has stated
achieved to date may depend on the ability of Iraqi forces,
that it was “largely peaceful and orderly.” Elections for the
national ministries, and local authorities to protect and
Kurdistan Regional Government (KRG) were held in
stabilize liberated areas and prevent IS reinfiltration,
September 2018, and provincial elections have been
particularly should the Trump Administration seek to draw
postponed, without a new date being set.
down U.S. forces. Iraqi officials have identified more than
Iraq’s major ethnic and religious constituencies are
$88 billion in short- and medium-term recovery needs.
internally diverse in political terms, as evident in the 2018
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Iraq and U.S. Policy
election results. A pan-ethnic and pan-sectarian coalition of
of Iraqi compliance with U.S. end user agreements. Public
interest groups agreed to support the new government, and
U.S. intelligence assessments regard Iran-linked armed
differences over policy priorities and leadership preferences
groups as serious threats to U.S. personnel in Iraq.
exist within communal blocs. Prime Minister Adel Abd al
Fiscal Challenges
Mahdi does not lead or represent a single political party or
Fiscal shortfalls, reported corruption, and weak service
bloc, and emerged as a consensus candidate acceptable to
ministry performance create public investment constraints
the Sa’irun (On the March) coalition led by populist Shia
and vex Iraqi decision makers. Oil exports, the lifeblood of
cleric and longtime U.S. antagonist Muqtada al Sadr, the
Iraq’s public finances and economy, brought diminished
predominantly Shia Fatah (Conquest) coalition led by Hadi
returns from 2014 through 2016. Revenue improved from
al Ameri of the Badr Organization, the Nasr (Victory)
mid-2017 to mid-2018 thanks to higher prices, but prices
coalition of former prime minister Hayder al Abadi, and
have again declined, and Iraq has limited its oil production
Kurdish and Sunni Arab blocs. Fatah includes several
in line with OPEC decisions. These factors have left Iraq
individuals formerly associated with the mostly Shia PMF
more financially dependent on lenders and donors at a time
militias, including figures and movements with ties to Iran.
of increased security and stabilization costs. Iraq’s Standby
The Kurdistan Region and Disputed Territories
Arrangement with the International Monetary Fund (IMF)
Already-difficult relations between the KRG and the
and billions in World Bank programs commit it to a set of
national government in Baghdad soured further over the
fiscal and administrative reform benchmarks. U.S. loan
KRG’s September 2017 advisory referendum on
guarantees and U.S. technical assistance also have helped
independence. Despite Iraqi, U.S., and coalition requests to
Iraq attract billions more in lending to meet pressing needs.
delay or cancel the vote, the referendum was held in areas
To date, the IMF has described Iraqi performance on its
of recognized KRG authority as well as in disputed areas,
commitments as “weak in some key areas” and called for
and the results overwhelmingly favored independence. In
further international support and improved public sector
its wake, Iraqi leaders moved to reassert the national
financial management. The KRG faces a budget and debt
government’s sovereign control over international borders
crisis of its own, brought on by war costs and Baghdad’s oil
with the Kurdistan region and, in October 2017,
dispute-driven withholding of budget support since 2014.
reintroduced national government forces into disputed
Iraq-U.S. Relations
territories where they had been present prior to the Islamic
State’s 2014 advance. Intra-Kurdish tensions since have
The new Iraqi government envisions continued U.S. and
flared, with rivals blaming each other for the loss of control
coalition security assistance to Iraq, including the
over strategic territories and resources. U.S. officials do not
continuation of U.S. military training. U.S. forces are
recognize the result of the referendum, warn against
hosted by Iraq pursuant to an exchange of diplomatic notes
unilateralism and the use of force by both sides, and urge all
under the 2008 U.S.-Iraq Strategic Framework Agreement.
Iraqis to engage in constitution-based dialogue.
Some Iraqis remain deeply critical of and hostile to the
foreign military presence in Iraq, while others may be
In the May 2018 national elections, the two largest Kurdish
concerned that the U.S. decision to draw down U.S. forces
parties, the Erbil-based Kurdistan Democratic Party (KDP)
in Syria could be applied in Iraq with short notice.
and the Suleimaniyah-based Patriotic Union of Kurdistan
Security Assistance and Foreign Aid
(PUK) won nationally significant numbers of seats despite
stiff but diffuse competition from Kurdish opposition
The United States provides foreign aid and security
parties. The KDP won 45 of 111 legislative seats in the
assistance to Iraq in support of Iraqi operations against the
KRG’s September 2018 election, followed by the PUK and
Islamic State, Iraqi security force development, Iraqi public
smaller parties. Intra-Kurdish differences over relations
financial management reform, United Nations-coordinated
with Baghdad may persist, especially in light of national
stabilization programs, and other objectives. Reflecting
Iraq’s needs, fiscal
government proposals to provide the KRG with a reduced
situation, and status as a major oil
share of the national budget.
exporter, U.S. assistance to Iraq blends U.S.-funded
programs with lending and credit guarantees.
The Future of the Popular Mobilization Forces
Iraq’s Popular Mobilization Forces contributed to Iraq’s
The 115th Congress extended authority for U.S. train and
fight against the Islamic State, even as ties between some
equip programs in Iraq through December 2020. This
PMF components and Iran have prompted Iraqi and
includes U.S. aid to KRG forces. Congress has appropriated
international concerns. In 2016, the COR adopted a law to
more than $5.6 billion for the program through FY2019.
provide for a permanent role for the PMF as part of Iraq’s
The United States has pledged more than $265 million in
national security sector. The law calls for the PMF to be
stabilization aid to liberated areas of Iraq through the
placed under the authority of the commander-in-chief and
United Nations Development Program’s Funding Facility
to be subject to military discipline and organization. Some
for Stabilization (FFS), and President Trump requested
PMF units have since been integrated, but most remain
additional stabilization and aid funds for Iraq for FY2018
outside the law’s defined structure, including some units
($347 million) and FY2019 ($198 million).
associated with groups identified by the State Department
as receiving Iranian support. U.S. government oversight
Christopher M. Blanchard, Specialist in Middle Eastern
reporting has described post-2014 cases in which some
Affairs
Iran-backed PMF units gained access to U.S.-origin
weaponry, prompting efforts to seek its return and reviews
IF10404

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Iraq and U.S. Policy



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https://crsreports.congress.gov | IF10404 · VERSION 15 · UPDATED

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