Mahmoud Ahmadinejad was right to look smug at the end of his two-day state visit to Iraq. Not only did he become the first Iranian president to visit Baghdad, but he also took a big step towards achieving the victory that had eluded Ayatollah Khomeini, the father of the Iranian revolution.

Twenty years ago the Ayatollah conceded defeat after his country was fought to a standstill in the bloody trenches of the Iran-Iraq battlefield. After the deaths of one million people over eight years of combat, he compared giving up the struggle to drinking “poison”, and died the following year.

As Mr Ahmadinejad discovered when he was greeted by “Uncle Jalal” (President Jalal Talabani of Iraq) in Baghdad, Iraq today is now ripe for Iranian domination.

While the US-led invasion of Iraq has been criticised widely across the Middle East and around the world, Iran has emerged as the main beneficiary from the conflict.

Saddam Hussein, Iran’s most implacable enemy, was removed along with his Baathist regime. In their place are Shia Muslim leaders, most of whom spent years in exile in Tehran being indoctrinated by their Iranian brethren. The Iranians hope to translate this political allegiance into a new relationship on the ground, particularly in southern Iraq, the oil-rich region dominated by Shia Muslims.

Apart from yesterday’s familiar anti-American rhetoric, Mr Ahmadinejad also announced several new initiatives aimed at binding Iraq ever closer to Iran.

These include loans, Customs agreements, joint oil ventures, and a free-trade zone, in addition to the construction of an airport for pilgrims near the holy city of Najaf and the possible supply of electricity to the southern city of Basra.

The aim is clear. Without the need to fire a shot, Iran is becoming Iraq’s indispensable political ally and trading partner. In contrast to the failed British efforts at reconstruction in southern Iraq, the Iranians are promising to deliver everything from commercial goods to electricity. Behind the scenes they are also suspected of arming, funding and directing the Shia militias, the only real force on the ground.

While Iran has taken advantage of the power vacuum in Iraq, Baghdad’s Arab allies have been slower to move. The Iranian Embassy in Baghdad has remained open and active from the first day of the US-led invasion five years ago. In contrast, many Arab states have still not opened diplomatic missions in the Iraqi capital.

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