Lack of rapprochement between Gulf states and Iraq will only push the country further into Iran's orbit.
Gulf has a role in how much influence Iran has on Iraq
In a recent talk in Bahrain about national security in the GCC, Dubai's police chief, Lt Gen Dhahi Khalfan, listed Iraq's subordination to Iran as one of the top five potential security threats to the Gulf.
It is not news that Iran's influence in Iraq is growing. But there is a misplaced assumption in the Gulf that because of sectarian tendencies and proximity, Iraq's political tilt towards Iran is inevitable and natural. In light of such assessments, the Gulf has been reluctant to expand diplomatic relations with Baghdad.
Hoshyar Zebari, the Iraqi foreign minister, told me in a recent interview that a "breakthrough" is being reached in relations with the Gulf. During meetings last Monday in Baghdad, he said, progress was made towards resolving outstanding disputes. Qatar, he said, pledged to consider resumption of diplomatic relations within the year. Saudi Arabia is likely to open its Arar border crossing to boost trade with Iraq. The remaining states already have diplomatic representation in Iraq.
But even if diplomatic breakthroughs are reached, the Gulf's outlook towards Iraq is still marred by distrust and suspicion (which has only deepened during the premiership of Nouri al Maliki, who lived in Iran for a decade). Saudi Arabia appointed a non-resident ambassador to Baghdad in February but refused (along with other Gulf states) to send top-level delegations to the Arab League summit there in March.
Yet there are considerable reasons for the GCC to move closer to Iraq than to push it away.
First is the potential downfall of the Syrian regime; when this happens, Iraq will need to reengage with the Gulf - not only because of the $2 billion (Dh 7.34 billion) in annual trade between Iraq and Syria, but because the post-Assad regime will likely be friendlier to the Gulf.
Then there is economics. Iraq is projected to become the second largest oil exporter after Saudi Arabia, surpassing Iran, by the end of this decade. If that happens, power dynamics will change and it will be difficult for Iran to exert influence in Iraq. Until that happens, Iraq needs its Gulf neighbours, who are well-positioned to invest in the country.
Trade between Iran and Iraq is higher than Iraq's trade with any Gulf state ($10 billion a year) but Iranian investment is much lower (just over half a billion dollars in 2009, and $200 million in 2010). The UAE, the only Gulf country that invests heavily in Iraq, topped the list of foreign investors there in 2009, at over $37 billion. That went up to $66 billion last year. It is past time for other GCC states to follow suit.
Iraqis complain that cheap and low-quality products from Iran flood their markets, making it difficult for Iraqi-made goods to compete. Iranian investment focuses on the construction and retail sectors in the Shia holy cities as part of Tehran's strategy of influence within Iraq.
"The Islamic Republic of Iran never misses an opportunity to miss an opportunity," says Afshin Molavi, a senior research fellow at the New America Foundation and a columnist for The National. "Their handling of their 'soft power' in Iraq is a case in point. Their poll numbers are dwindling, and not only among Sunnis, but also among Shia. They are increasingly seen as heavy-handed and interfering."
Finally, there's clerical rivalry. Iraqi Shia clergy are already resisting Iranian influence as the Najaf Hawza (the world's oldest learning centre for Shia) tries to reclaim its prominence, overshadowed by Qom's Hawza in Iran since 1979. Najaf and Qom deeply differ on the concept of clerical leadership. It is safe to say that the differences between Shia and Sunni Muslims over caliphate (on who should have succeeded the Prophet) are as deep as the differences among Shiites on imamate (who can lead Muslims).
Najaf is traditionally characterised as "hawza samitah", a quietist seminary - which restricts the role of clergy to catering to followers rather than politically leading them. By contrast, Qom believes a cleric can guide and lead followers until the coming of the hidden imam (the saviour of Muslims).
Because of this rivalry, Iran is reportedly preparing Qom-based Ayatollah Mahmoud Hashemi Shahroudi, an Iraqi cleric who subscribes to the Khomeinist school, to lead Iraq's Shia after the death of Ayatollah Ali Sistani, the current supreme leader of Najaf's hawza. In his official visit to Iran last month, Mr Al Maliki met with Mr Shahroudi.
To be sure, sectarian affinities play a significant role in shaping Iraqi politics. The reasons, however, must be understood in context. For Iraqi Shiites, the wounds of fighting a devastating war against Iran are still fresh; the physical and psychological pain still haunts thousands of men and women. The eruption of civil strife after the 2003 US invasion helped link the Sunnis to the Baathist regime and the Shiites to the "Safawi", sympathisers with the Iranians (from the Iranian "Safavid dynasty" that prosecuted Sunnis). Add to that the rising sectarian sentiments in the region after the Arab Spring, in the form of provocations by extremists on both sides.
But these sentiments can be rendered temporary if sectarianism is addressed and relations deepened. "No one can ignore the sectarian factor but Iraq is not, and will not be, subordinate to Iran," Mr Zebari said.
Iraq is not an Iranian "cat's paw", as some have suggested. The Gulf must not view Iraq only through its ties to Iran. The Gulf has a choice: continue to alienate Iraq and push it into the Iranian orbit, or begin a process of engagement. That choice will determine whether Iraq becomes the security threat many are fearing.
On Twitter: @hhassan140