By: JANE ARRAF
Iraqi officials flew to Tehran this week to try to cut a deal with Iran for electricity, attempting to defuse potentially destabilizing anti-government demonstrations spreading through the country’s southern provinces.
The protests started a week ago amid anger over unemployment, corruption and lack of access to basic services such as power. Iraq’s health ministry announced Monday that eight demonstrators had been killed in the unrest. Iraqi police say dozens of security forces have been wounded.
Some analysts said the crisis, which could threaten Iraq’s caretaker government, illustrates the unintended consequences that U.S. sanctions against Iran are having on an American ally. The trade sanctions were reimposed after President Trump withdrew in May from a 2015 nuclear deal between Iran and six major powers.
Iraq — where temperatures in the south soar up to 120 degrees in the summer — has been importing electricity for several years from neighboring Iran, one of its biggest trading partners. But after re-imposition of sanctions, Iraqi officials say, Iran can no longer access Iraq’s payments, and it recently stopped the electricity supply.
“Iran can’t receive the payments because of the sanctions, so they stopped providing power to Iraq for that reason,” Mohammed Fathi, the spokesman for electricity minister Qassem Mohammad al-Fahdawi, tells NPR. He says the $250 million transfer to pay for electricity was initiated through the government-owned Trade Bank of Iraq.
Exporting electricity has been a major hard currency earner for Iran.
Fathi says Iraq has needed the electricity imports partly because three years of fighting ISIS destroyed electrical power plants and reduced Iraq’s ability to generate its own electricity.
Although the sanctions — including sanctions that punish countries and companies trading with Iran — are meant to take effect in August, some transactions, including international bank transfers to Iran, have already been effectively barred in line with U.S. Treasury Department directives that they be implemented as soon as possible. U.S. officials referred NPR to these directives, when asked whether the sanctions could be the reason for the payments being blocked.
Over the weekend, Fahdawi led a delegation to Iran to discuss restoring electricity that had been stopped for the past month due to what the electricity ministry, in a statement, called payment transfer problems and technical reasons.