The dust from election day is beginning to settle down and now we can identify the main possible trajectories in which government-formation is going.
First of all, it is becoming clear that there are two very powerful regional influences that are pulling in different, but not exactly opposite, directions. On the one hand there’s Iran and on the other there’s Saudi Arabia, and I may say Turkey with it.Second, the US is not a direct player on the stage but is believed to be represented by the Saudis and Turks.
Iran is pushing for a government that resembles the one formed after the December 2005 election. That would be a government including Maliki's bloc, along with ISCI, the Sadrists, the Kurds and maybe the Sunni Accord. Iran however, does not want Maliki to be the next PM, and this is the reason why a deal between him, ISCI and the Sadrists isn’t in place yet.
Iran by the way wants neither Allawi nor Maliki to be the next PM. Iran essentially would like to see a weak central government in Baghdad. To achieve this end, Iran is pushing Shiite parties to pick a “compromise” PM figure and a strike deal that allows smaller (and more sectarian) parties to have a lot of influence at the expense of the larger bloc (Maliki's or Allawi's).
Iran's efforts in this direction and Maliki's refusal to negotiate with Allawi is making Allawi pursue a direction that is similar—in concept—to what Iran wants; a ruling coalition comprising his bloc, the Kurds, Sadrists and/or ISCI, and maybe the Sunni Accord.
Saudi Arabia is seen as Allawi’s main source of regional support. The kingdom is making a spectacular debut in Iraqi politics and is working energetically to counter Iran's role.
In just a few days Riyadh has received most Iraqi leaders; Hashimi, Hakim, Talabani and Barzani, all had meetings with King Abdullah himself. Maliki and the Sadrists, however, were shunned by the Saudis.
The Saudi king also made some interesting gestures such as awarding prestigious medallions to Iraqi Kurdish leaders Talabani and Barzani. This is a declaration of approval of the new order in Iraq. Approval of course requires cooperation in the form of leaving the Iranian bandwagon and taking the Saudi proposal instead.
The Saudi effort, from the way politicians are talking about it, is seen in Iraq to be coordinated with Turkey and the US. Perhaps this perception will serve to persuade the Kurds to listen to the Saudi proposal for two reasons. First, they care a lot about maintaining good relations with, and not upsetting, their northern neighbor. Second, a deal under the auspices of the US is likely to involve checks against extremist Arab nationalist agendas within Allawi's camp. Moreover, the Kurdish region looks forward to GCC investments, which the Saudis can help with. Overall, a deal with the Sunnis/Allawi is looking more lucrative, and not as dangerous as before.
It would be a bad idea for Allawi or Maliki to go in either direction preferred by Iran and Saudi Arabia. The key risk here is that a government formed with the exclusion of Allawi (and with him the vast majority of Sunnis) or with the exclusion of Maliki and the Sadrists (the vast majority of Shiites) will be very unlikely to enjoy stability. There will be millions of frustrated voters on either side—among whom there must be some former insurgents and militiamen—who will see the exclusion of their representatives as great injustice.
Additionally, there are great differences between the programs of Maliki and Allawi on the one hand and the programs of ISCI, Sadrists and Accord on the other hand. Joining these sectarian parties in a coalition would only lead to a highly unstable and inefficient government that will not be able to make critical decisions effectively. By contrast, a government that includes both Allawi’s and Maliki’s blocs would be more likely to rule effectively and avoid disintegration, again due to the similarities in their programs.
This idea of a nationalist Allaw-Maliki coalition is unfortunately not gaining enough momentum to compete with the Saudi and Iranian proposals.
The two leaders—pressed by political realities—are being diverted from the nationalist vision they both sought to represent and instead heeding what X or Y in the region thinks is acceptable. Iran and Saudi Arabia are both keen not to let Iraq become a satellite of the other but at the same time neither wants Iraq’s democracy to succeed because that is a threat to both of them.
Remember the Lebanese election? Despite Iran’s “loss” and Saudi Arabia’s “win”, Lebanon is still far from safe. The risk here is that Tehran and Riyadh may have decided to have a rematch in Iraq. With the accelerating US disengagement from Iraq, the shape of the next government may very well be shaped by the winner of this rematch.