The political theatre currently playing out in Baghdad suggests a historic breakthrough. In rapid succession, some of the most powerful armed actors in Iraq have declared their willingness to disarm. Powerful Shiite cleric Muqtada al-Sadr announced he would place his armed faction, Saraya al-Salam, under formal state authority. Within days, Qais al-Khazali, the leader of the formidable Asaib Ahl al-Haq, echoed the sentiment, signaling a readiness to integrate his fighters into the national security apparatus. For the newly appointed government of Prime Minister-designate Ali al-Zaidi, these announcements look like an unprecedented victory for state sovereignty.
The reality on the ground is entirely different. What is being sold as a comprehensive disarmament campaign is instead a sophisticated rebranding exercise by domestic political survivalists. Moving fighters into state institutions does not transfer their underlying loyalty to the government. When a militia member enters a state ministry, the command structure remains unchanged. The central challenge facing the country is not a lack of legal frameworks or administrative decrees, but a deep systemic dependence on parallel power structures that the state itself funds to the tune of billions of dollars annually.
The State That Funds Its Own Insurgency
To understand why the current optimization efforts are failing, one must look at the national balance sheet. The Popular Mobilization Forces, known as the PMF, are not a rogue band of outsiders operating from the wilderness. They are a legally recognized branch of the Iraqi security forces, established by law during the existential fight against Islamic State forces. They receive approximately 3.5 billion dollars annually directly from the national budget.
This financial arrangement creates an extraordinary paradox. The Iraqi state pays the salaries, buys the ammunition, and funds the logistical operations of groups that routinely ignore the official chain of command. The prime minister is nominally the commander-in-chief of all armed forces, but he exercises virtually no operational control over the elite units within the PMF umbrella.
A standard integration plan typically involves moving fighters onto the payroll of the Ministry of Defense or the Ministry of Interior. In theory, this strips them of their factional identity. In practice, it simply institutionalizes factionalism within the ministries. One veteran Iraqi commander recently summarized the process as moving the gun from the right hand to the left hand. The weapon remains in the same hands, and the orders still come from the same factional headquarters, but the public treasury now bears the legal and financial responsibility for the fighter.
Survivalism and the Regional Collapse
The sudden enthusiasm for state integration among figures like Sadr and Khazali cannot be understood without analyzing the dramatic shifts across the regional borders over the last two years. The regional environment that once sustained these groups has fundamentally changed. The fall of Bashar al-Assad’s government in Syria severed a vital supply line. Concurrently, the heavy blows dealt to Lebanese Hezbollah, combined with direct military strikes by Israel and the United States on Iranian strategic infrastructure across 2025 and 2026, have forced a reassessment in Baghdad.
Local actors have realized that direct association with the regional axis of resistance carries an increasingly high domestic cost. For leaders focused on building long-term political influence within Iraq, wrapping themselves in the flag of the Iraqi state is an act of self-preservation. By officially integrating into the state security forces, they protect their assets, retain their government salaries, and shield themselves from international sanctions or targeted airstrikes.
This strategy creates a sharp division within the armed groups. The factions with deep domestic political investments, such as political parties and extensive business networks, are eager to accept the cover of state legitimacy. They recognize that true power in modern Baghdad is wielded through ministries, state contracts, and bureaucratic control, rather than through low-level insurgent activity.
Conversely, hardline ideological factions have rejected the disarmament initiative entirely. Groups like Kataib Hezbollah and Harakat Hezbollah al-Nujaba remain committed to their regional mandate. They have made it clear that they intend to continue their operations regardless of the directives coming from the prime minister's office. This ideological division means that the government's current strategy will, at best, absorb the groups that were already looking to transition into political actors, while leaving the most radical and violent elements entirely untouched.
The Economic Weapon in New York
The pressure on Prime Minister-designate Ali al-Zaidi to resolve this crisis is not merely internal. The administration in Washington has adopted an increasingly aggressive stance toward Baghdad's inability to control its sovereign territory. Special Presidential Envoy Tom Barrack has consistently tied American diplomatic and economic cooperation directly to the complete disarmament of non-state actors.
The United States possesses a uniquely powerful financial instrument to enforce its demands. Under a mechanism dating back to 2003, all revenues from Iraq’s international oil exports are routed through the Federal Reserve Bank of New York. The physical dollars are then shipped to the Central Bank of Iraq in Baghdad.
When Washington becomes dissatisfied with Baghdad's performance, it can slow or halt these dollar shipments. The impact of this financial leverage was made clear when the US suspended dollar transfers following a series of drone and missile attacks on regional installations. The resulting liquidity crisis threatened to collapse the Iraqi dinar and left the government struggling to pay public sector salaries. For the political elites in Baghdad, the message was unmistakable. Failure to address the militia issue threatens the financial survival of the state itself.
The Fragility of Consensus Politics
The structural design of the Iraqi political system makes a decisive confrontation with these armed groups nearly impossible. Since the transition of power, Iraqi governance has relied on a consensus model known as Muhasasa Ta'ifia, which divides state resources and ministries along sectarian and ethnic lines.
Prime Minister-designate Ali al-Zaidi was selected precisely because he is viewed as a compromise figure who does not pose an immediate threat to the established political blocs. He commands no private army and possesses no independent political machine. He relies entirely on the backing of the Shia Coordination Framework, a loose coalition of parties that includes the very political patrons who control the major militias.
An existential campaign against the militias would require the prime minister to attack the political foundations of his own government. A serious attempt to freeze PMF bank accounts or arrest non-compliant commanders would instantly trigger a political crisis, likely resulting in the collapse of the governing coalition. The system is designed to preserve stability through compromise, a feature that inherently protects the armed factions from genuine state overwatch.
The Tactical Danger of Defiance
The limits of state authority are regularly exposed through direct violence. The recent assassination of a senior government intelligence officer in a drone strike highlighted the extreme risk faced by state officials who attempt to investigate or curb illicit militia activities. The foreign ministry attributed the attack to domestic factions, sending a clear signal to the judicial and intelligence community.
The state security forces themselves are deeply infiltrated. Intelligence agencies, counter-terrorism units, and police commands are divided by competing loyalties. An order issued from the top must pass through multiple layers of bureaucratic filters, where sympathetic officials can delay execution, tip off targets, or actively sabotage operations.
This institutional weakness means that any attempt to enforce disarmament through coercion is likely to shatter the security forces from within. The rank-and-file soldiers often share regional, tribal, or religious ties with the militia members they are ordered to police. In many communities, the local PMF commander possesses greater social authority and commands more genuine respect than the provincial police chief appointed by Baghdad.
Beyond the Rhetoric of Disarmament
The current focus on the physical surrender of weapons misses the broader structural reality of the crisis. Iraq is awash with small arms, light weaponry, and advanced technical hardware. A superficial collection of assault rifles or the ceremonial handover of outdated artillery pieces does nothing to alter the balance of power.
True integration requires a complete dismantling of the parallel economic empires that these groups have established over the past two decades. The major factions control illegal customs checkpoints at international borders, run lucrative extortion rings at major commercial hubs, and operate front companies that capture major state infrastructure contracts. These economic networks generate hundreds of millions of dollars in unregulated revenue, allowing the groups to maintain their independence regardless of what occurs within the national budget allocations.
As long as the political leadership in Baghdad relies on the consensus of armed political parties to form a government, the state will remain a hostage to its own defenders. The declarations of integration observed in the capital are not the dawn of a new era of state supremacy. They represent the tactical adjustment of sophisticated political actors who have learned that the easiest way to defeat the state is to become it.
