Iraq is like a miniature of the Middle East with its population structure and social characteristics. Each domestic actor in Iraq has relations with ethnic and religious groups in the neighboring countries.

The new era ushered in by the invasion of Iraq on March 20, 2003 continues to have a ripple effect on Iraq and the Middle East. The short-lived war brought the Baath regime to an end and a new post-Saddam period begun. For the United States, the invasion of Iraq was a matter of regime change. The events that unfolded after the end of the major combat turned it into a costly invasion and a difficult process of state building. While overthrowing Saddam Hussein was the easy part, building stability and starting a new political process in Iraq proved to be extremely complicated and difficult. In the aftermath of the war, the state mechanism in Iraq collapsed and a huge vacuum of power emerged. The developments since May 1st, 2003 when the US President George W. Bush declared the end of ‘major combat’ indicate that people of Iraq, countries in the region and Turkey are entering a difficult period in the post-invasion era. Due to a number of unforeseen factors, developments in Iraq will have far reaching consequences for the region’s future. This report will discuss these developments and their consequences for Iraq, its neighbors and Turkey.

Iraq is like a miniature of the Middle East with its population structure and social characteristics. Each domestic actor in Iraq has relations with ethnic and religious groups in the neighboring countries. The Kurds in northern Iraq have links with the Kurds in Syria, Turkey and Iran; the Shia Arabs have relations with Arab and non-Arab Shias in Iran, Kuwait, Bahrain and Saudi Arabia; the Sunni Arabs have relations with the Sunni Arabs in Syria and Jordan and Islamic movements in the Arab world; and the Turcomans have relations with Turkey. All of the neighboring and regional countries have also interest in and relations with these groups and actors in Iraq. Therefore the future developments in Iraq will affect neighboring countries while policies pursued by its neighbors will inevitably have an impact on Iraq. This report will first analyze the current situation and then examine the various factors that shape Iraq’s today. The factors that are also expected to shape its future will be examined after discussing the mistakes of the occupying administration and role of the unforeseen elements in Iraq’s domestic structure. These factors will be discussed under four main categories i.e., security, politics, law and economy. The consequences of positive and negative developments stemming from these interrelated factors will be evaluated. Their impact on the region and Turkey will also be analyzed. Before the beginning of war, it was assumed that the Shia Arabs who make up about 60-65 percent of the population would have a decisive influence on the future of Iraq. The Shia Arabs, who were deprived of state power and pushed to the margins until the war, were expected to seize the most effective position when a democratic regime was established in Iraq. Moreover, the Kurds were also expected to achieve important political gains after the war as the closest ally of the US. It was also argued that the Kurds would be in a position to opt for a federation or an independent state depending on the outcome of the war and its aftermath. It is obvious that all of these factors would have an impact on the regional and international balance of power in Iraq and the broader Middle East. They can be summarized as follows:  • In case the Kurds establish an independent state, the Shia percentage would rise to 80-85 percent and Iraq would become a Shia-majority state. The US is opposed to the establishment of an independent Kurdish state to preempt this possibility, and tries to bring the Kurds to a moderate position in the framework of a formula for a federation.  • Establishment of an independent Kurdish state would lead to insta