Maliki To Be Ousted From Power

BMI View:  Iraq's Prime Minister Nouri al-Maliki will fail to retain his position, and prime minister-designate Haider al-Abadi will succeed in forming an inclusive governing coalition over the coming months. While this will increase potential for Iraq to maintain formal unity, the political crisis in the country will continue over the coming years.

Recent developments reaffirm our view that Iraq's Shi'a Prime Minister Nouri al-Maliki will fail to retain his position for a third term ( see 'Rising Risk Of State Collapse - Scenarios Assessed', June 23). On August 11, the country's new President Fouad Masoum designated Haider al-Abadi, a member of Maliki's Shiite Islamist Dawa party, to form the next government and replace Maliki. However, the prime minister rejected Abadi's nomination and vowed to challenge the decision. He also issued a letter rejecting the authority of the Shi'a National Alliance grouping in parliament, a political group of which the State of Law Alliance - which coalesces around Maliki's Dawa party - is part. More importantly, special forces loyal to Maliki were deployed on August 10 in strategic areas of Baghdad, a sign that he might be willing to retain power by force.

Maliki Increasingly Isolated...

Abadi's Potential Tenure To Lessen Risks
MENA - Political Risk Rating

BMI View:  Iraq's Prime Minister Nouri al-Maliki will fail to retain his position, and prime minister-designate Haider al-Abadi will succeed in forming an inclusive governing coalition over the coming months. While this will increase potential for Iraq to maintain formal unity, the political crisis in the country will continue over the coming years.

Recent developments reaffirm our view that Iraq's Shi'a Prime Minister Nouri al-Maliki will fail to retain his position for a third term ( see 'Rising Risk Of State Collapse - Scenarios Assessed', June 23). On August 11, the country's new President Fouad Masoum designated Haider al-Abadi, a member of Maliki's Shiite Islamist Dawa party, to form the next government and replace Maliki. However, the prime minister rejected Abadi's nomination and vowed to challenge the decision. He also issued a letter rejecting the authority of the Shi'a National Alliance grouping in parliament, a political group of which the State of Law Alliance - which coalesces around Maliki's Dawa party - is part. More importantly, special forces loyal to Maliki were deployed on August 10 in strategic areas of Baghdad, a sign that he might be willing to retain power by force.

Maliki Increasingly Isolated...

Maliki is unlikely to be able to cling on to power in our view, as he has lost key domestic and international support. His insistence on retaining his post despite significant risk of state collapse has weakened support among a large number of allies, who are increasingly of the opinion that the unity of Shi'a political representation is at stake. Particularly alarming for Shi'a politicians was Maliki's dismissal of Grand Ayatollah Ali al-Sistani's - the country's highest Shi'a authority - calls for Iraqi officials not to cling to their positions. Highlighting the decline of support among Maliki's closest associates, several Dawa representatives sent the prime minister a message asking him to step aside on August 8.

Maliki is also losing support from the Iranian leadership, a key long-time ally. With the unity of Iraq at stake, Tehran is coming to the realisation that support for Maliki will hinder its ability to project power in the neighbouring country. At the end of July, Iran's Supreme Leader Ali Khamenei reportedly called on Maliki to step down. Senior officials in the Islamic Republic - who had long felt snubbed by Abadi for neglecting to visit Tehran even on religious pilgrimage for the past decade - recently lifted their objection to his nomination. Finally, the US has long worked behind the scenes to find a replacement for Maliki, whom Washington accuses of fomenting divisions between Iraq's Shi'a, Sunni, and Kurdish blocs. US President Barack Obama congratulated Abadi following his nomination, and urged him to form an inclusive government that will represent all Iraq's major sects as quickly as possible.

Abadi's Potential Tenure To Lessen Risks
MENA - Political Risk Rating

...But Not Going Without A Fight

Maliki will use all the resources at his disposal to maintain political influence, and the next few months will be crucial to Iraq's long-term survival as a unified state. We expect skirmishes among militias and elements of the army loyal to Maliki and forces loyal to other Shi'a political blocs to take place over the coming weeks. We also cannot preclude Maliki seeking to organise a coup d'état to preserve his position. However, his ability to mobilise military forces will be limited by Sistani's opposition to its rule, which will have a strong influence on Shi'a militias. In addition, Maliki is likely to continue governing through the 30 days that Abadi has to select a new cabinet and put it to parliamentary approval. During this time, he will seek to spoil efforts to build the coalition needed to form Abadi's government, which will result in delays in the swearing in of a new government.  

Political Crisis Continuing Regardless Of Abadi's Election

Abadi is widely seen as a relatively moderate candidate, and we believe he will be able to form a coalition government that brings together Shi'a, Sunni and Kurdish political blocs. The realisation among the majority of Iraq's political groups that forming an inclusive government is crucial for the fight against jihadist group Islamic State (IS) will provide a strong incentive for the formation of the cabinet. Should this occur, it would reinforce our core view that Iraq will maintain formal unity over the coming decade.

That said, the political crisis in Iraq will continue over the coming years even if Abadi succeeds in forming a government coalition. IS fighters recently made gains against Iraqi forces in the Diyala province north east of Baghdad, and seized the town of Jalawla from Kurdish military forces on August 10. Even with the formation of a new government, we do not expect Baghdad to be able to retake northern and western Iraq any time soon.

Risks To Outlook

We cannot preclude Maliki garnering enough support among the army and militias to stage a coup d'état, which would unleash a military confrontation among Shi'a political groups. This would dramatically weaken Baghdad's ability to stop IS's advance, and the risk of the conflict extending into the south of the country would be high. Should Maliki succeed in reasserting his influence, we also believe that the risks of Iraqi Kurdistan seeking to declare formal independence would rise significantly, increasing potential for the Iraqi state to fragment along sectarian lines.

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Sector: Country Risk
Geography: Iraq
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