Date first published: 07/05/2026
Key sectors: political
Key risks: political stability; governance; political polarisation; economic risks; business risks; tribal violence; sanctions
Risk development
On 27 April Iraq’s President Nizar Amedi, who was elected on 11 April, nominated businessman Ali al-Zaidi as prime minister-designate following months of political deadlock within the Shi’ah Coordination Framework (CF). The 41-year-old, who lacks prior government experience, emerged as a compromise candidate after a prolonged power struggle between former prime minister Nouri al-Maliki and caretaker premier Mohammed Shia al-Sudani.
Al-Zaidi’s nomination appears to have proceeded without objection from the United States (US) despite previous sanctions imposed on his bank over alleged money laundering linked to Iran. His selection reflects both internal elite bargaining and external pressure, particularly from Washington, to expedite government formation amid escalating regional tensions.
Why it matters
Al-Zaid’s appointment signals continuity rather than change in Iraq’s political system. His lack of an independent political base makes him reliant on the CF, positioning him as a managerial figure rather than a reformist leader capable of challenging entrenched interests. This came at a critical moment, as the Middle East war grinds on and amid increasing US pressure on Baghdad to curb Iranian-backed militia influence. Simultaneously, Tehran is relying on these same groups to resist disarmament efforts, further complicating Iraq’s position.
Al-Zaid is therefore entering office with minimal political capital under maximum external pressure. This misalignment significantly constrains his ability to pursue meaningful reform, particularly in the security sector, where Iranian-backed groups remain deeply embedded in state institutions, the economy and parliamentary politics. While Washington appears willing to work with him, this reflects pragmatism rather than endorsement. US support will likely remain conditional on tangible progress in limiting militia activity, an objective that previous governments have failed to achieve.
Background
The country’s post-2003 political order has consistently produced compromise leaders shaped by both domestic factionalism and foreign influence. From Nouri al-Maliki’s US-backed rise in 2006 to subsequent Iran-US negotiated outcomes, prime ministerial appointments have reflected external balancing as much as internal politics.
Al-Zaid’s emergence followed this pattern. Backed by influential figures, including Supreme Judicial Council Head Faeq Zaydan, he gained acceptance due to his political neutrality and cross-sectarian business ties. His financial network, spanning banking, media, and state contracts, has enabled him to build relationships with key Shi’ah, Sunni and Kurdish actors. However, allegations linked to his business activities, including US sanctions on his bank, risk undermining his credibility.
Risk outlook
The new prime minister faces an immediate test in forming a cabinet within the 30-day constitutional deadline. Failure would prolong political paralysis and potentially trigger renewed elite bargaining. Even if successful, his government is likely to remain constrained by competing factional interests.
In the medium-term, Iraq’s ability to balance US and Iranian pressure will remain limited. Continued militia activity risks further US economic and military actions, while efforts to disarm these groups could provoke internal instability given their deep tribal and political integration. Economic pressure, particularly disruptions to oil exports and state revenues, will compound these risks.
Al-Zaidi’s premiership is unlikely to mark a turning point; instead, it reflects Baghdad’s continued reliance on weak consensus leadership to manage, rather than resolve, structural political and security challenges.