Last week, the Saudi monarch King Abdullah extended a public invitation to Iraq’s president and all its parliamentary coalitions to come to Saudi Arabia in order to hold talks and reach an agreement over the formation of Iraq’s government. The timing of this surprising move suggests that Riyadh may have finally realized—perhaps with U.S. prodding—that its disastrous Iraq policy has hit a dead end.

The king’s offer comes as a response to perceived Iranian primacy in Baghdad, especially after Prime Minister Nouri al-Maliki’s recent visit there. The Saudis’ assessment of Iranian power in Baghdad is somewhat crude and simplistic. However, they are correct that the Obama administration has projected an unmistakable sense of indifference to Iraq that has allowed others to fill the vacuum. Worse yet, it is not just American adversaries, like Iran, who have taken steps detrimental to U.S. interests in Iraq, but clients like Saudi Arabia have done so as well. Blame this ugly state of affairs on the Iraq Study Group.

Long before the surge turned U.S. fortunes around in Iraq, Washington’s foreign policy establishment counseled retreat. The members of the bipartisan committee chaired by Lee Hamilton and James Baker known as the Iraq Study Group distilled their collective wisdom into a 2006 report with several key recommendations. Among others, the ISG report advised the Bush White House to renew the Arab-Israeli peace process, engage Syria and Iran and, in order to prepare the way for an American withdrawal, reach out to regional states, and offer them a stake in Iraq’s future.

What we are now seeing in Iraq is how this disastrous recommendation is playing out. With the current White House unable to chart any coherent strategy in Iraq other than to make good on a campaign promise to withdraw, the Obama administration is running on ISG autopilot.

Under this new American dispensation, where Iraq’s neighbors are invited to have a say in Baghdad’s political wrangling, some regional states are doing well while others are flailing. Iran has plotted a realistic Iraq strategy that has taken full advantage of Washington’s flagging attention, while Saudi Arabia has failed to come to terms with the new Iraqi order and its balance of power. The Saudis are consumed by fear of Iranian expansion, and view the Iraqi Shiite political class as nothing but Iranian assets and facilitators of Iran’s influence over post-American Iraq. In particular, they have been unwilling to work with Prime Minister Nouri al-Maliki.

Prior to the March elections, Maliki had tried to reach out to Riyadh but was constantly rebuffed. The Saudis made it clear that they would not normalize relations with Iraq under Maliki. Instead, they sought to undermine him while backing former interim prime minister Ayad Allawi. Here the Saudis made common cause with the Syrians, whose ostensible support of Allawi gave Riyadh the belief that Damascus could be enlisted to help counterbalance Iranian influence in Iraq. This hope was misguided. Syria had no political leverage in Iraq aside from the terrorism it sponsored there, and which it used to try to extract concessions from both Washington and the Iraqi government. With the Obama administration focused on withdrawal, rather than protecting the American investment in Iraq, Syria embarked on a campaign of terror in late August 2009 that was aimed explicitly at destroying Maliki’s political fortunes.

Riyadh’s decisions showed how badly they misread the political situation. Maliki, as the incumbent, was always the favorite to return to office, having had years to build up his power base through patronage and administrative appointments. Allawi’s chances, on the other hand, were always poor. While his list barely edged ahead of Maliki’s, he personally received fewer votes than Maliki, which, coupled with the fact that his list was predominantly Sunni, meant that he was a long shot. The Syrians understood as much, which is why Damascus shifted its position in September and pulled the rug out from under Riyadh. Allawi, the Syrians concluded, could not be Iraq’s next premier, and the only real option was Maliki.

The Saudis had always believed that Maliki was Iran’s primary choice for prime minister, but this was yet another inaccurate Saudi assessment. In fact, Maliki had irked the Iranians by refusing to join the broad Shiite umbrella coalition that included Iran’s closest allies. He had sought, moreover, to marginalize his opponents—and Iran’s friends—and had even moved militarily against Moktada al-Sadr, Iran’s most formidable asset in Iraq. By trying to undermine Maliki, the Saudis were doing Iran a favor. A weakened Maliki, the Iranians calculated, could not risk it on his own and would be forced to come back under their tent.

In stark contrast to the Saudis, the Iranians have played their hand in Iraq pragmatically. They knew that none of their Shiite friends had a serious shot at challenging Maliki, so they figured that it was better to stick with him and find a way to plant Sadr in his cabinet. Iran sees Sadr as its long-term investment—head of a political and military movement similar to its Lebanese asset, Hezbollah—and with him in Maliki’s coalition, Tehran would have a seat in the cabinet. From that perch, the Iranians believe that they would be able to pressure the government on their key issues of concern, like security appointments and U.S. basing rights in Iraq.

Either the Obama administration did not appreciate the damage the Saudis were doing, or, even worse, were not able to lean on Riyadh to fall in line. In either case, it is the end result of the magical thinking behind the ISG report. Washington’s authority regarding Iraq is now diminished because ISG strategy is premised on a fundamental misconception—if all of Washington’s efforts were directed toward the goal of withdrawing, none of Iraq’s neighbors would take the American bargaining position seriously. If we wanted to give everyone else in the region a stake in Iraq, the region saw it otherwise—that we were abandoning our own stake and getting nothing in return.

Tony Badran is a research fellow at the Foundation for the Defense of Democracies.

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