Lukman Faily
Permanent Representative of the Republic of Iraq to the United Nations in New York
It is hard to make sense of what is happening in the world today if we treat it as a string of unconnected wars and crises: a war here, an economic rivalry there, a struggle over technology and energy somewhere else. What we are witnessing runs far deeper. We are living through a transition in the very structure of the international system, one in which the balance of power, the nature of alliances, the sources of influence and even the way states understand their own national security are all changing. At the same time, the regional order in the Middle East is being reshaped, with direct consequences for the countries of the region, Iraq among them.
The trouble with periods of transition is that they do not produce a new order quickly. The old order usually weakens well before the outlines of its replacement become clear, and history teaches us that shifts of this kind can take decades to play out. In the meantime, competition sharpens, interests become more tangled, and the levels of risk and uncertainty rise. For Iraq, then, the question should not stop at “What is happening around us?” It has to be: “Do we have the capacity to understand these changes, to protect Iraq from their dangers and to seize the opportunities they create?”
A World Where the Sources of Power Are Shifting
The first defining feature of this transformation is the gradual move away from the unipolar moment that followed the end of the Cold War, towards a system with more centres of power. That does not necessarily mean the end of American power, or that dominance is simply passing to another state such as China. The United States still possesses exceptional military, economic, financial and technological strength. China, meanwhile, has become a major economic, industrial and technological power, Russia retains an influential geopolitical and military presence, and middle powers such as India, Turkey, Saudi Arabia and Brazil, among others, are playing an ever larger role.
It would be more accurate, then, to say that the world is moving from a system with one largely dominant centre towards a more plural and more complex one, in which the elements of power are spread across a range of actors. This drift towards a more fragmented and multipolar world has become a prominent part of the debate within international political and economic bodies, including the United Nations and the international financial institutions. Plurality here does not necessarily mean that the centres of power are equal. What it does mean is that any single power is less and less able to set the rules of the system on its own, across every issue.
The second shift concerns the nature of alliances. In earlier periods, the central question in international relations was: “Whose side are you on?” Today, in many cases, the question has become: “On which issues are you with me, and on which are you working with others?”
Take India. It has a deepening strategic relationship with the United States and works with Washington, Japan and Australia through the Quadrilateral Security Dialogue, known as the Quad. At the same time, it maintains its relations with Russia, is a member of BRICS and holds firmly to what it calls “strategic autonomy”. This is not necessarily duplicity. It reflects a world in which states are increasingly inclined to build their relationships issue by issue and interest by interest, rather than falling completely into line behind a single bloc.
This shift matters for Iraq because it opens up more room to build a broad and balanced set of relationships. But it also makes foreign policy more complicated. Successful balancing does not mean standing at the same distance from everyone. It means being able to define the national interest on each issue, and knowing how far to move towards, or away from, each party.
The third shift is the entanglement of economics and technology with national security. Trade, investment and technology are no longer purely economic domains. Semiconductors, artificial intelligence, supply chains, critical minerals, energy, payment systems, ports and trade corridors have all become instruments of power and influence. Sanctions, tariffs and restrictions on technology exports have likewise become political and security tools. Hence the growing talk of “geoeconomics”: the use of trade, investment, finance and technology to achieve strategic and political ends.
This means that the very concept of power has changed. The shift is not limited to a redistribution of power among states; the nature and sources of power are changing too. A strong state is no longer simply one with a large army. It is also one that has knowledge, technology, human capital, energy, productive capacity and trade networks, along with the ability to protect its supply chains.
The fourth shift concerns international institutions. The United Nations, the Security Council and the other institutions established in the aftermath of the Second World War are under mounting pressure as the gap widens between the way power was distributed when the international order was founded and the way it is actually distributed today. The world has changed faster than its institutions. Meanwhile, the issues that demand international cooperation, from climate change and artificial intelligence to pandemics, trade and war, have grown more complex and more interconnected. The paradox is that the need for multilateral action is growing at the very moment when international institutions are finding it harder to produce agreement among the states that matter. Nor is the crisis only about how these institutions are composed. It also reflects the declining ability of the major powers to reach the understandings that would allow these institutions to function. The crisis of multilateralism, in other words, is not only one of representation; it is also one of capacity and effectiveness.
The fifth shift relates to uneven demographic change. Some societies are ageing and shrinking, while others are still seeing rapid population growth, with large numbers of young people. This will have an increasing impact on labour markets, migration, production and the balance of power.
But the most dangerous feature of the present period, in my view, is the rising level of uncertainty. By uncertainty I do not simply mean a lack of information. I mean how difficult it is to predict the direction, pace and outcomes of these changes, and the sheer number of paths open to states at any one time. We may know which powers and forces are at work, but we do not necessarily know how they will interact, what they will lead to, or when.
Strategic planning in an age of uncertainty, therefore, is not about claiming to predict the future with precision. It is about building the capacity to deal with more than one possible future.
The problem is not that we know China will displace the United States, or that the United States will remain dominant forever, or that a major war will break out, or that globalisation will come to an end. The problem is that we do not know for certain which of these paths, or any other, will actually materialise. Even the international economic institutions now treat uncertainty, and the need to adapt to it, as defining features of the current period.
That is why flexibility, together with the ability to learn, adapt and manage risk, is becoming one of the most important sources of a state’s power. In a more stable world, a state can plan on more predictable assumptions. In a world that is changing fast, it has to build the capacity to cope with multiple scenarios.
A Region in Search of a New Balance
If the international system is going through a transition, the Middle East is going through a sharper one. Many of the assumptions that governed the region over recent decades are now being revisited: the nature of the American role and how it is changing, Iran’s place in the region, the relationship between Israel and its regional neighbours, the future of the Palestinian question, the roles of large and influential states such as Turkey and the Gulf states, the security of energy supplies and sea lanes, and the nature of regional alliances.
This is a region where, for decades, security arrangements rested in large part on the American presence, alongside deterrence and the management of some rivalries through proxies. It is now seeing more direct, and more dangerous, uses of force. Another feature of this period is the blurring of the traditional line between internal and external security. War, energy, trade, water, technology and sanctions have all become issues whose effects are felt inside and outside the state at the same time.
One of the most dangerous developments has been the move of the conflict between Iran and Israel from a shadow war of indirect operations to direct military confrontation. The conflict then widened to draw in the United States, with direct consequences for the security of the Gulf and of Iraq, for the Strait of Hormuz, and for energy markets and international trade. This has shown that it is becoming ever harder to separate regional security from global economic security, and that a conflict in the region can quickly turn into a shock for energy markets, transport and global supply chains.
Meanwhile, the Gulf itself is changing. The Gulf states are no longer simply oil producers that depend, for their security and their economies, on the patterns of relationships that held in the past. They are pursuing huge economic diversification projects and investing in technology, artificial intelligence, digital infrastructure, ports, logistics and energy, while also expanding their investments around the world and working to secure more room for independent action in foreign policy. The World Bank has recorded a clear acceleration in digital transformation and in investment in artificial intelligence across the Gulf Cooperation Council states, even though oil and gas remain central to their economies.
The Gulf states now carry growing economic, investment, technological and political weight within the Arab world, and regional competition is no longer only about military power and security. It has also become a contest over investment, technology, trade corridors, cities, ports and human capital.
This raises a more fundamental question: where is Iraq’s own project amid all these projects? By “project” I do not mean an ideological or expansionist agenda, but a clear national vision of Iraq’s interests, its sources of strength, its regional role and its network of economic and political relationships.
If a state does not define its interests, its priorities and its sources of strength, it does not stay neutral; it gradually turns into an arena in which the strategies of others play out. Geography alone does not produce a strategic role. Location becomes a source of power only when there is a state capable of turning it into policy, interests, economic networks and diplomatic influence.
As for the Palestinian question, the context around it has changed, but the issue itself has not gone away. Developments in recent years have put it back at the heart of the debate about the future of the regional order, and have shown the limits of building stable regional arrangements without addressing one of the region’s most entrenched conflicts. The biggest question, therefore, has yet to be settled: is the region heading towards a new balance, with clearer rules for managing competition, or towards a long cycle of intermittent wars and crisis management? Both possibilities are still in play, and that is precisely one of the sources of uncertainty that Iraq must factor into its calculations.
Iraq Faces a Test of Capacity and Adaptability
In the face of all these changes, it is easy for Iraq to become preoccupied with what the United States, Iran, Turkey, Israel and the Gulf states are doing. But Iraq’s ability to deal with the outside world will remain, to a large extent, a reflection of the quality of its own internal foundations.
The first challenge here is sovereignty. Sovereignty is not a slogan, nor is it merely the protection of borders. It means that the state holds the final say, and the capacity to enforce it, within its own territory. The more centres of decision-making and power there are outside the state’s institutional framework, the less able the state becomes to shape a coherent national policy, even if the outward trappings of legal sovereignty remain in place.
The second challenge is economic. The Iraqi economy is still heavily dependent on oil. World Bank data for 2025 show that oil accounted for around 88 per cent of government revenue and 91 per cent of goods exports. This means that price swings, changes in production and disruption to shipping routes are not external events for Iraq. They can turn directly into a crisis for the budget, for public spending and for jobs. It leaves a large part of Iraq’s financial stability hostage to developments it does not fully control, from energy prices to production decisions and the security of sea lanes.
A rentier economy creates more than a fiscal problem; it also shapes the relationship between the state and society. When a state relies mainly on revenue from a natural resource, rather than on a productive economy and a broad tax base, the incentives around work, production and accountability change, and so does the relationship between citizen and state.
The third challenge is the quality of institutions. Iraq does not necessarily suffer from a shortage of laws, institutions or resources. The more important questions are these: how good are those institutions? Who controls them? Do they work according to the logic of the state and the public interest, or are they beholden to other interests?
This is where the problems of corruption, the ethno-sectarian quota system (muhasasa), and weak administration, planning and implementation become bound up with one another. Institutions are not measured by how many buildings, employees or laws they have, but by their ability to turn resources and decisions into results.
The fourth challenge concerns people. We talk a great deal about oil, the budget, roads and projects, but Iraq’s greatest wealth is its people. Education, knowledge, work, discipline, competence, values and citizenship are not secondary social matters. They are the infrastructure on which a modern state is built.
In the long run, a state can rarely rise far above the quality of the people, society and institutions it rests on. If we do not create the educational and institutional environment that develops people’s abilities and equips them to manage technology, the economy and modern institutions, natural wealth will not be able to make up for that in any lasting way.
Closely linked to this is the challenge of society and trust. There is a crisis that runs deeper than the troubles of any particular government: a crisis of trust between citizens and the state, between citizens and institutions, and at times between the different communities that make up society itself. Trust is not just an abstract moral idea. It is social, economic and political capital. The lower trust falls, the higher the cost of every transaction, the weaker the legitimacy of institutions, and the harder it becomes to carry through policies and reforms.
Then there are the challenges of water, climate and population growth. Population growth can be a source of strength if it goes hand in hand with education, production and jobs, but it turns into a mounting strain when it outstrips the development of the economy, institutions and services. These are not peripheral environmental concerns but matters of national security, because they are tied to food, agriculture, cities, internal migration, employment and social stability. The World Bank classifies Iraq among the countries highly exposed to the risks of rising temperatures, water scarcity and climate shocks.
These challenges are not separate issues but parts of an interconnected whole. Weak institutions undermine sovereignty; a rentier economy affects the citizen’s relationship with the state; poor education shows up in the quality of administration; and low trust raises the cost of reform. The challenge lies not only in diagnosing these problems or drafting strategies to tackle them, but in building the state’s capacity to turn vision, decisions and resources into implementation and results.
Perhaps the most serious challenge of all, though, is the absence of a long-term vision. We may be able to manage today’s crisis, secure this year’s budget and deal with a passing political problem. The harder question is this: what kind of Iraq do we want in 2040 or 2050? How large will the population be? What kind of economy will it have? Where will its income and its power come from? Where will Iraq fit into the networks of trade, energy and technology? What shape will its education system take? What kind of cities will it have? And how will citizens and the state relate to one another?
A state that does not know where it wants to go will spend most of its energy just getting through the day. The decisive factor in the decades ahead will be the kind of state, society and people we build within Iraq.
So the question we ask should not only be: where do we stand on this country or that? It should also be: what kind of person do we want to shape? What kind of society do we want? What kind of economy do we need? What understanding of the state, citizenship, the law and the public interest do we want to entrench? And what sources of strength do we want Iraq to have twenty or thirty years from now?
After all, the real battle Iraq faces in the coming decades is not only over power, oil or geography. It is also a battle of intellect, knowledge and values, of competence and trust, of institutions, and of the ability to build a state that can understand a changing world, engage with it and protect its interests within it.
In a world of rising uncertainty, the ability to adapt becomes a form of power. In a region that is being reshaped, clarity about the national interest becomes a necessity. And in Iraq’s case, the equation remains clear: the strength of our position abroad begins with the quality of what we build at home. States do not choose the changes taking place around them, but they can influence how exposed they are to the risks, and how far they can turn some of those changes into opportunities. What separates one outcome from the other is the quality of the state and its capacity to learn, adapt and deliver.