Michael Eisenstadt
       Political  change sweeping the Middle East has heightened concerns about a  shifting balance of power in Iran’s favor. But Tehran’s experience  in Iraq provides critical insights into the limits of the Islamic  Republic’s regional influence, and its propensity to be its own worst  enemy in dealing with its Arab neighbors.
          Iran  enjoys many natural advantages in Iraq. It has a long  porous border. It has longstanding ties with key Shiite and Kurdish  politicians, parties, and paramilitary groups. It has religious and  cultural affinities. And it maintains extensive trade and economic  relations. But its efforts over the past eight years  to influence developments have yielded mixed results.
         Tehran  has developed a sophisticated approach to project influence in Iraq  that employs traditional instruments of national power—diplomacy,  information, military links, and economic ties—as well as elements  unique to Iran, such as connections to transnational Shiite clerical  networks.  
          Iran  has provided advice, mediation, and financial support  to its political allies. It has offered arms, financing, and training  to militias and insurgent groups. And it has used its “soft power” in  the economic, religious, and informational domains to expand its  influence and become the key external power broker  in Iraq. 
          But Tehran’s implementation has often been disjointed and clumsy:
   - While seeking to unite Iraq’s Shiite parties to maximize their electoral heft, Iran has repeatedly split off radical elements to create “special groups” to serve as armed surrogates. Groups such as Asaib Ahl al-Haqq have contributed to the political fragmentation of Iraqi Shiite politics and to intra-Shiite tensions, thereby undermining Shiite unity.
 
- While ostensibly supportive of the Iraqi government, Iran has also supported militias that undermined the authority of the government and that have used Iranian-supplied arms to pursue vendettas and settle scores with other Shiite groups.
 
- While striving to win Iraqi hearts and minds through Arabic radio and TV broadcasts, Iran has undermined these efforts by its own actions, such as the seizure of the Fakka oil well in December 2009, the dumping of subsidized produce and manufactured goods on the Iraqi market, and the shelling of villages in northern Iraq where Iranian Kurdish groups are based.
 
         Iran  may hope to fragment the Shiite community to keep it weak  and dependent on Tehran, ensuring Tehran will be needed to mediate. But  these actions have also made close ties to Tehran a political liability  for some of its allies. They have also generated a healthy suspicion of  Iran’s goals and methods.
          Iran  will continue to influence Iraq through political allies  and soft power. But it is likely to reduce its reliance on militias and  insurgent groups, which can no longer operate openly and which will  have difficulty justifying their actions once U.S. forces leave. 
          Politically,  the unstable and fractious nature of the new Iraqi government ensures  Iran a role as mediator in the future. Muqtada Sadr has already  threatened nonviolent resistance if services do not improve within six  months.   
           For  Iran, soft power encompasses the various non-kinetic elements of  national power, though there is nothing soft about the way in which it  wields this influence:
   - Reputation and image management: Tehran presents itself as a reliable partner and ally and pushes a triumphalist narrative that claims God and history are on its side. These messages have been undercut by a tendency to over-promise and under-deliver assistance to its friends, its own domestic political problems, and a tendency to lecture and condescend toward Arabs.
 
- Economic leverage: Tehran has strengthened trade and investment in Iraq for profit and for leverage. It has, however, often used business deals to bolster local allies, and dumped cheap, subsidized produce and consumer goods in Iraq, undercutting the latter’s agricultural and manufacturing sectors. Iran supplies about 10 percent of Iraq’s overall electricity needs, but many Iraqis believe Tehran manipulates its delivery for political ends. All these actions have engendered resentment in Iraq.
 
- Export of revolutionary Islam: Tehran seeks the primacy of its brand of Islam in Shiite communities around the world by funding the activities of clerics trained in Qom and steeped in the ideology of clerical rule. When the ailing Najaf-based Ayatollah Ali Sistani eventually dies, Iran may finally be poised to achieve this goal. Tehran also seeks to create bonds of solidarity with Shiite communities around the world that can serve as external bases of support for its policies and as allies should it be attacked. And Iran has created a virtual army of Hizballah clones in Iraq—including the Promised Day Brigades, Asaib Ahl al-Haqq, and Kataib Hizballah—to do its bidding.
 
- Propaganda and spin: Iran has been vying for Iraqi “hearts and minds” through Arabic-language news and entertainment broadcasts that reflect Tehran’s propaganda line. But Iranian actions have often undercut these efforts. Polling data since 2003 has consistently shown that Iraqis of all stripes (including Shiites) distrust Iran and do not consider its form of governance a viable model for Iraq. These popular attitudes explain why Tehran will continue to lean heavily on soft power, its security services, and covert action to project influence in Iraq.
 
          U.S.  officials tend to be wedded to a hard power approach to  strategy and statecraft that underestimates the importance of Iranian  soft power.  Washington has fretted that the Iraqi military will be  unprepared to secure the country’s airspace and waters after U.S. forces  leave.  But Iranian soft power actually poses  the greater long-term threat to Iraqi sovereignty and independence.  
           Tehran’s  soft power in Iraq has often underperformed, mainly  due to maladroit implementation.  Baghdad's ability to counter Iran's  soft power will depend on its success in rectifying lopsided trade  imbalances and dependencies in the electricity sector, and developing  its oil and gas sector.  And Washington's most potent  means of countering Iranian influence in Iraq (and beyond) is  the publication of detailed, credible information about how Iran  operates--which is likely to find a receptive audience in the region.
           So  assessments of Iran as the big winner in Iraq and the main beneficiary  of the Arab Spring are premature. The formation in December 2010 of  a new Iraqi government, which includes many of Tehran’s closest allies,  and the impending U.S. military withdrawal certainly present new  opportunities for Iran to extend its reach in Iraq.  But it is still  unclear whether Iranian influence will continue to  be self-limiting after the U.S. withdrawal, or whether Tehran will  succeed in transforming Iraq into a client state via a gradual process  of Lebanon-ization. 
           Over  the long run, the reach of Iran’s influence in Iraq will depend on the  security situation, the political complexion of the Iraqi government,  the type of long-term relationship the United States builds with Iraq,  and the overall tenor of Iran-Arab and Sunni-Shiite relations in the  Gulf following Saudi and UAE intervention in Bahrain.  But it is Iraq’s  reemergence as a major oil exporter, which will  almost certainly heighten tensions between the two oil-exporting  neighbors, which may be the most important factor influencing the future  of Iran-Iraq relations.  
 Michael Eisenstadt is senior fellow and director of  the Military and Security Studies Program at The Washington Institute  for Near East Policy.