• Iraq-Iran Economic Relations Just Fine, Thanks

    June 28, 2011

    Tags: , , , , , ,
    Posted in: Embassy/State, Iran, Iraq, Military

    So who was the real winner of the US-Iraq War of 2003? Hmmm… US loses 4466 soldiers, drops a couple of trillion dollars for little-to-no return, so maybe not us. Iraq gets its civil society shredded and undergoes eight years of sectarian civil war, sees over 100,000 killed and is home now to a bustling al Qaeda franchise… nope. Iran sits on its hands while the US hacks away at its two major enemies, Saddam and the Taliban, while burning itself out economically? Yep, gotta go with Iran as the winner.

    Now, in addition to winning our war strategically, it is looking good for Iran economically as well, at least vis-a-vis Iraq.

    While Iraq flounders trying to gin up its oil industry, and Reuters headlines a story Iraq’s Moribund Manufacturing Sector Appeals for Help, it is good to know that economic relations between Iraq and former enemy Iran are, well, peachy.

    The Tehran Times lets us know that Iranian First Vice President Mohammad-Reza Rahimi will visit Iraq on July 6 in order to take part in the Iran-Iraq Joint Supreme Economic Committee. The newspaper estimated the two countries’ current annual trade value at $4-5 billion.

    Better yet, Iran just agreed to supply 9400 barrels of gasoil a day to Iraq for power generation. Ironic as Iraq sits atop one of the largest reserves of petroleum in the world, just out of reach apparently.

    Politically, things are also smooth as butta. Iraq’s Foreign Minister, Hoshiar Zibary said on Wednesday that Iran and Iraq would sign an agreement to overcome “all the suspended problems between both countries.” “Iran is playing a positive role in Iraq and there is no objection for the strengthening of relations between the two countries,” Zibary said, highly assessing the “assistance, granted by Iran to the Iraqi people.”

    But while trade is good, and oil is necessary, the real money is in tourism. More specifically, religious tourism, Iranian Shia pilgrims traveling to previously off-limits shrines in Iraq, is a huge source of economic exchange, albeit mostly one-way.

    Iranian travel agencies control religious tourism to the Shia holy cities of Najaf and Karbala, preventing Iraqi travel agencies from rendering a similar service. The Iranian companies are associated with hotels, also owned by Iranians. The control by Iranian companies extends to tourists from Lebanon who combine a visit to Iraq with one to a religious site Mashhad, Iran. The Iranian domination also extends to security arrangement for protecting the tourists. That role is filled by one company owned by one of the religious parties in Karbala.

    Business is booming. Najaf is in the midst of a hotel building frenzy in a bid to dramatically ramp up the number of visiting pilgrims. While thousands of mostly Iranian religious tourists already pass through Najaf every day on what are marketed as nine-day tours of Iraq’s holy Shiite sites, hoteliers and business groups in the city expect hotel capacity, currently at breaking point, to double in the next three years.

    Elsewhere, markets in rural Iraq are filled with Iranian goods, especially fresh fruits and vegetables. While the knitwear market is dominated by cheap Chinese stuff, other household goods are conspicuously marked “Made in Iran” and are snapped up by consumers.

    We saw a little slice of this during our own time in Iraq. Peter’s PRT covered an area that included the city and mosque of Salman Pak. Once a center for chemical weapons production and secret police training under Saddam, Salman Pak is better known to most Iraqis and Iranians as a historical and recreational area, approximately 15 miles south of Baghdad near a peninsula formed by a broad eastward bend of the Tigris River. It is named after Salman the Persian, a companion of Mohammad, who is buried there.

    Salman Pak is also site of the Arch of Ctesiphon, the remains of the once majestic Persian Sassanid capital (pictured above). Ctesiphon is one of the largest and oldest freestanding arches in the world. Before the US invasion of 2003, the area was a popular day trip out of Baghdad, and even sported a floating casino and villas for select Saddam friends.

    The attraction now for Iranian pilgrims is the mosque, once a well-known Shia shrine, converted to a well-known Sunni shrine by Saddam and now once again a well-known Shia shrine after sectarian violence post-2003 blew away most of the Sunnis in the area.

    On routine patrols through the area, Peter’s PRT would frequently see giant tour buses, with Iranian license plates and markings, hauling tourists around the city.

    The Iranian tourists would take pictures of our military vehicles and gesture at us as we drove past, even as our soldiers scowled at them and pantomimed “no photos.”

    Nothing weirder than to be spending one’s days freeing Iraq only to run into Iranian tour agencies being the most obvious beneficiaries of that freedom.


    Read more about the US-Iran proxy war now underway in Iraq…




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