Iraqi Prime Minister Ali Al-Zaidi Seeks Distance From Iran and Terror Amid Economic Reforms
Ali Al-Zaidi, Iraq's prime minister for only a few months, recently received praise from U.S. President Donald Trump during a special summit at the White House two weeks ago. The meeting resulted in energy deals and long-term partnerships between the two countries. Al-Zaidi, a former Islamic bank chairman and businessman rather than a military or political figure, was chosen as a compromise candidate after Iraq's general elections failed to produce a government. This selection reflects a growing recognition within Iraq of the need to unlock the country's economic potential.
Despite his visit to the White House, Al-Zaidi also attended the funeral of Ali Khamenei in Tehran days earlier, highlighting Iraq's ongoing ties with Iran and its cautious approach to balancing relations between Washington and Tehran. The White House visit included signing $60 billion in agreements, mainly in the energy sector, with major American companies. Iraq holds some of the world's largest oil reserves but has yet to fully develop its production and export capacity. Oil revenues account for about 80% of Iraq's state income, totaling $80 to $100 billion annually.
To diversify its economy, Iraq is pursuing infrastructure projects such as the "Development Road," a $17 to $20 billion initiative involving the UAE, Qatar, and Turkey to build oil pipelines from the Iraqi port of Al-Faw to Turkey. Religious tourism is another growing sector with potential for expansion. However, Iraq faces significant challenges, including corruption that has reportedly cost the country $300 billion in oil revenues since 2003. Al-Zaidi has launched a crackdown on corruption, with recent arrests and cash seizures reaching $100 million, though much of the illicit funds remain with pro-Iranian Shiite militias.
Security remains Al-Zaidi's biggest challenge, as he seeks to control pro-Iranian militias and prevent the infiltration of Yemen's Houthi forces into Iraqi territory. Many militias maintain stronger loyalty to Tehran than Baghdad, complicating efforts to stabilize the country. Economic recovery is closely tied to restoring security and curbing militia influence, a concern that also has regional implications, including for Israel.
