USIP’s Sarhang Hamasaeed explains how al-Sudani has fared in Iraq’s fractured political environment, examines the status of the government’s ambitious economic and developmental agenda, and looks at how Iraq is currently navigating the developments in Gaza.

How has al-Sudani managed the tense and fractured political environment he inherited?

On balance, with a glass-half-full view, al-Sudani’s first year as prime minister can be viewed favorably. But one has to look beyond his performance to get a fuller view of the dynamics surrounding him and what they may mean for future stability in the country.

Even though he was relatively unknown to many both inside and outside Iraq before becoming prime minister, he’s gradually built an image for himself as a leader who is serious, pragmatic and willing to work with all sides — in short, someone you could do business with. In this, he is being met halfway by key interlocutors’ actions (or inaction).

After withdrawing from the political process, al-Sadr has not challenged the al-Sudani government as he had al-Sudani’s predecessors, although the situation in Gaza may change that.

And even though al-Sudani’s government could not meet their commitments on timelines for deliverables — such as passing a national oil and gas law and amending amnesty law — the interested political actors, the Kurds and Sunni Arabs, mostly held the lack of progress against the political coalition that brought al-Sudani to office rather than against the prime minister himself.

The Sunni Arabs, the Kurds and Iraq’s ethnic and religious minorities hope to address their issues through al-Sudani, rather than challenge him, as they fear the failure of his government could bring greater adverse consequences at the hand of actors that would push a more extreme political, security and economic agenda against them.

Iraqi youth — who have been at the forefront of several major protest movements in recent years — are more skeptical and cynical about al-Sudani, both in terms of meeting their aspirations and his ability to operate beyond the restrictions that his political coalition puts on him.

Iraq passed a three-year budget in June, which could give al-Sudani, his backing coalition and the country some budgetary continuity, predictability and stability going forward. However, it could also embolden certain political factions to feel they no longer need the Sunni Arabs and the Kurds since they already formed the government, passed the budget and ensured a degree of acceptability for the government domestically and externally.

This is where Iraq would risk going back to instability, especially if you overlay some other developments — such as the Federal Supreme Court invalidating a Kurdistan regional oil and gas law, and later the parliament of the Kurdistan Region itself. Additionally, pressure tactics on the speaker of the Council of Representatives have suggested he could lose his office. There lies a chronic Iraqi challenge — a positive agenda being undermined by narrow pursuits of power in different political circles.

Iraq has begun playing a larger role in the Middle East both diplomatically and economically. How has al-Sudani navigated regional tensions between Iran and Arab states?

Indeed, Iraq has played an important role in Iran-Saudi and other rapprochement efforts in the Middle East for a few years now. As prime minister, al-Sudani has continued on the path toward regional integration and collaborative engagement.

He has promoted what he calls “productive diplomacy,” meaning that he seeks economic and other interests beyond simply good relations. Even more, the al-Sudani government’s economic agenda connects domestic and foreign policy ambitions. They have leveraged the relative political stability and security of the current moment to pursue the “Development Road,” a project that promotes Iraq as a dry canal of ports, highways and railways that connect Asia to Europe — as ambitious and big a vision as other countries in the region.

Iraq has also signed contracts with General Electric, Total Energies, Siemens and others to improve energy production domestically while sharing a piece of the economic pie. The al-Sudani government’s support for financing the al-Muhandis company and connecting Iraq and Iran by rail might be seen as entrenching Iran’s interests and agenda — which are often viewed as malign by many of Iraq’s citizens, neighbors and western supporters. But another view might see the move as part of a pragmatic approach to portray Iraq as a web of mutually beneficial economic interests in the region.

In his first year, al-Sudani also had to work with Iran and the Kurdistan Region leadership to prevent further Iranian missile and drone attacks on Iranian opposition based in Iraq. Khor Mor gas field was attacked multiple times, with fingers pointing to Iran and its proxies attempting to hamper Kurdish and Iraqi aspirations to become a player in the global gas market.

Relations with Turkey is also a mix of working through difficult portfolios, including the expansion of Turkish military attacks inside Iraq against the Kurdistan Workers' Party, water issues, oil export via Ceyhan, trade and construction.

Furthermore, Iraq’s Federal Supreme Court ruling that a 2012 Iraq-Kuwait maritime agreement was unconstitutional raised alarms among gulf neighbors regarding Iraq’s commitment to its obligations.

How has the Israel-Hamas war played out in Iraq?

Historically, Iraq has been an active supporter of the Palestinians and has not recognized Israel. When al-Sadr originally pursued a majoritarian government after the 2021 elections, his political opponents — many of whom are now in the government coalition — suggested that al-Sadr was implementing a scheme backed by Israel and the United States. Al-Sadr responded by sponsoring and ensuring the passage of legislation that would criminalize normalization with Israel, which carried a penalty of capital punishment or life in prison. Given the past, it’s not surprising that Iraq has taken a strong and vocal stance in support of the Palestinians now, and the developments in Gaza have unleashed reactions on multiple fronts.

Al-Sudani participated in the Cairo Summit for Peace, expressed unwavering support for the Palestinians, denounced Israel’s actions in strong terms, called for a cease-fire and sent humanitarian assistance. He also spoke with President Joe Biden, Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin about the developments.

Meanwhile, armed groups attacked Iraqi military bases hosting U.S. military personnel in Anbar, Baghdad and Erbil provinces, causing injuries to U.S. service members and one fatality due to cardiac arrest. Similar attacks occurred on U.S. military targets in Syria. The United States believes Iran supported those attacks and conducted strikes in Syria in response. Members of the Popular Mobilization Forces blocked the transfer of Iraqi oil to Jordan as a form of economic pressure, given that Jordan has normalized relations with Israel.

Besides al-Sudani, a number of other prominent Iraqi figures have publicly weighed in on the situation. In a statement, Supreme Shia Cleric Grand Ayatollah Ali al-Sistani stressed the need to end the suffering of the Palestinians and support their rights, otherwise violence would not end.

Al-Sadr’s public posture has unfolded incrementally, starting with calls for prayers and solidarity with the Palestinians. This was followed up by calls for organized public protests in Iraq, which occurred, and for peaceful protest on the Lebanese side of the Israel-Lebanon border. Most recently, al-Sadr called on the al-Sudani government and the Council of Representatives to close the U.S. embassy — albeit without attacking diplomats. While al-Sadr’s position might be seen as a way to get payback on his political opponents and the United States for the pressure he faced in 2021, some Iraqi elected officials have taken up this call, and a letter calling for a special session to vote on the closure of the U.S. embassy has already gained signatures in the Council of Representatives.

These developments further complicate an already fraught situation for al-Sudani. Iraq and the United States have been trying to pursue a common agenda under al-Sudani’s government, and al-Sudani had been given a standing invitation to the White House — a visit that was generally expected to come before the end of the year, but whose timing now seems uncertain given unfolding events.

What’s the outlook for al-Sudani’s second year in office?

Looking ahead to the second year of al-Sudani’s term, he possesses the important ingredients to proceed with key economic, development and diplomatic agendas that would solidify his position, stabilize the government and bolster Iraq’s progress.

However, key tests are also on the way. The political impact of the Israel-Hamas war is still unfolding, and the attacks on U.S. military personnel have added another wrinkle to the situation, but al-Sudani publicly defended U.S. troops by stating they were in Iraq at the invitation of the Iraqi government.

The fight against corruption and illicit drugs, concerns about shrinking civic space and human rights, the return and reintegration of displaced Iraqis from places such as the al-Hol camp in Syria, and the impact of climate change will remain on the radar of Iraq’s various stakeholders. The outcome of provincial elections this December will be a major insight into the mood of the Iraqi people and will undoubtedly factor into al-Sadr’s next political move. Meanwhile, the stability of the economy and the value of the Iraqi dinar, political partners’ continued patience with the slow implementation of commitments, the actions of regional countries (primarily Iran), and the international community’s level of engagement will all help determine the course of the al-Sudani government’s second year in office and the trajectory of Iraq overall.