Apr 5, 2019 | 18:41 GMT

7 mins read

What Iraq Has to Gain, and Lose, by Resurrecting a Border Deal With Iran

Iraqi President Barham Salih, right, holds a joint press conference with his Iranian counterpart Hassan Rouhani at the presidential palace in Baghdad on March 11, 2019.
(SABAH ARAR/AFP/Getty Images)
  • Iraq's recent agreement to share the Shatt al-Arab waterway with Iran stands as a testament to the new level of political closeness between the historically hostile neighbors. 
  • But in addition to the diplomatic symbolism, Iraq knows it needs Iran's help to develop and clean the river and, in turn, help mitigate the blowback from its water crisis and ongoing unrest in Basra.
  • However, by deepening ties with its controversial neighbor, Baghdad risks further complicating its delicate relations with Iran's regional and Western enemies.

In early March, Iranian President Hassan Rouhani visited Iraq for his first-ever official state visit. The trip seemed to underline a newfangled closeness between the two countries, with Iraqi Prime Minister Adel Abdul-Mahdi's announcement that he and Rouhani had signed several agreements to cooperate on issues such as border security and economic development. But the two sides' decision to return to a 44-year-old border demarcation deal garnered the most attention in Iraq because of its immense historical and cultural significance.

The Big Picture

After a century punctuated by periods of hostility and bloody conflict, relations between Iran and Iraq seem to be on the mend — with Tehran seeking to deepen its political and economic ties amid increasing sanctions pressure from the West, while Baghdad looks to Iran to help quell its continued agricultural woes and security threats. The countries' recent decision to revive a 1975 border agreement has symbolically cemented this new chapter of increased cooperation and friendliness between the two neighbors.

Iran and Iraq have decided to change their maritime and land borders based on the original terms laid out in their Algiers accord signed in 1975. For Iraq, this means giving up land and maritime waters that it has controlled for decades — the most important of which being the Shatt al-Arab waterway, which has long served as the dividing line between the Persian and Arab worlds.

Understandably, the signing has rubbed some Iraqis the wrong way — fearing that they got the "short end of the stick" compared with their Iranian neighbors. But despite its citizens' concerns, Iraq actually stands to benefit more from returning to the agreement than it stands to lose, at least in the short term — though not without the risk of ruffling the feathers of Iran's enemies.

A Symbol of a Bloody History

The revival of the 1975 Algiers Agreement acknowledges that Iraq and Iran are on the same page regarding one of the most historically contentious issues between them: the delimitations of the Shatt al-Arab waterway. Arguing over access to the waterway, which is where the Tigris and Euphrates rivers meet, predates the formation of modern-day Iraq and Iran — with the Ottoman Empire exporting dates from palm farms that stretched for miles along the river in the 19th century.

But disputes over Shatt al-Arab became particularly contentious after oil was discovered in Iraq in the 1920s, with Baghdad wanting to preserve its freedom of navigation on the river in order to build up its oil sector. In 1975, the countries signed the Algiers accord to demarcate their various maritime and land border disagreements. Iran offered to withdraw military assistance to the Iraqi Kurds, who had been engaged in a violent dispute with the federal government in Baghdad. And in exchange, Iran would get half of the Shatt al-Arab waterway — granting it access to key ports as Tehran developed its own oil export industry.

A map of Iraq and Iran around the Shatt al-Arab River.

For several years, the agreement alleviated hostilities between Iraq and Iran, until Iran's 1979 revolution ushered in a new government and shifted power dynamics again. This led to the suspension of the Algiers accord shortly thereafter (where it had remained until this year's revival). As a result, the Shatt al-Arab waterway became the site of a violent war between Baghdad and Tehran throughout the 1980s, with Iran seeking to gain full control of the waterway. Today, the river is now a graveyard of sunken Iraqi and Iranian ships and vessels and serves as a painful reminder of the bloody history the two countries share.

Understanding Iraq's Rationale

When the Algiers Agreement was signed in 1975 to equally share the waterway, it provided mutual benefits to both countries. But today, the Shatt al-Arab seemingly holds more strategic importance for Iraq than it does for Iran. While there are a couple of oil ports along the waterway, Iran's most important terminals are further out along the Persian Gulf. But for Iraq, the Shatt al-Arab remains one of its only waterways to the Persian Gulf, and provides fresh water to farms and factories up and down the river — begging the question as to why Baghdad would willingly give up any access to such a vital river by reaffirming the Algiers Agreement.

But upon a closer look, officially ceding some right of passage to the waterway doesn't actually endanger any of Iraq’s baseline economic interests. For one, sharing more of the river with Iran won't limit any of Iraq's activity in its most important sector, oil production, considering the vast majority of Iraqi oil is shipped via pipelines to terminals just off Faw in the Persian Gulf. It also won't harm Iraq’s ability to import other shipments, since most food and other goods are shipped to the Iraqi port city of Umm Qasr, located on its border with Kuwait. In fact, sharing more of the Shatt al-Arab could ultimately yield more advantageous trade deals for Iraq by helping generate goodwill with Iran.

But perhaps more importantly, Iraq also knows it needs to pursue development projects along the Shatt al-Arab to help contain the separatist-fueled unrest in Basra, which is threatening Baghdad's grip on the oil wealth it so heavily depends on. And for that to happen, Iraq knows it needs to be on good terms with Iran — and specifically, Iranian businesses.

A chart showing Iraq's trade with Iran.

Iraq's salinated water is also threatening the region’s rich vegetable and fruit farms. And the country's continued drought has made water management even tougher for local and federal Iraqi authorities. To help make up for its developing agricultural sector, Iraq has thus become even more been dependent on crucial food imports from Iran — especially in areas near Iraq's southern border, such as Basra. And although Iraq has taken steps to become more food-independent, Baghdad still has a long way to go before it could even begin to think about decreasing its dependence on Iranian agricultural imports.

Creating a clean slate for cooperation in the Shatt al-Arab region also makes it easier for Iranian companies to help with cleaning out the heavily silted and polluted waterway, which could improve the salty water currently harming Iraq's agricultural production. And indeed, the first concrete step Iran and Iraq have taken since recommitting themselves to the Algiers Agreement has been setting up a committee to clean some of the waterway by dredging portions of the canal and eventually developing some of it.

New Friends, New Problems 

Regardless of the shorter-term economic potential of the waterway, however, reaffirming the 1975 Algiers Agreement in 2019, in and of itself, stands as a testament to the current level of closeness between Iran and Iraq — which could pose long-term geopolitical implications for Baghdad.

Reaffirming the Algiers Agreement highlights Iraq’s willingness to concede to Iran for its own economic benefit — and likewise, the leverage Iran still holds over Iraq.

The United States, for one, will likely not take kindly to Iraq cozying up with its chief rival in the region. This could place Baghdad in an even stickier situation, as it attempts to balance increasing U.S. sanctions pressure against Iran while maintaining access to one of its major providers of food and manufactured goods.

In the long run, the renewal of the 1975 agreement could also create problems for Iraq’s relationship with its other Persian Gulf neighbor, Kuwait. Kuwait and Iraq have long argued over the joint development of port facilities in Faw, as well as the undetermined maritime border between the two fairweather friends. And Iraq's willingness to agree with Iran over its maritime border could stir anxiety in Kuwait and other Iran-opposed states in the Arab Gulf fueled by Baghdad's apparent new level of comfort with Iran.

On the grander scale, the signing of the agreement thus highlights Iraq’s willingness to concede politically to Iran on a contentious issue for its own economic benefit — and likewise, Iran’s ability to pressure Iraq because of Baghdad's dependency on Tehran for economic and security support. As a result, Iraq will find that its budding relationship with its controversial neighbor may come at the cost of complicating Baghdad's already tricky political position with its regional neighbors and Western allies.

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