U.S. President Donald Trump has revelled in America’s victorious war against ISIS in Iraq, but his allergy to nation-building risks sparking new instability in the country that gave rise to the terrorist group in the first place.

With much of Iraq in ruins after the prolonged war with ISIS, Baghdad issued a desperate plea to the U.S. and neighboring allies to donate $88 billion to help rebuild the fragile nation. Yet a high-profile donor conference in Kuwait broke up up Wednesday with only a fraction of the target pledged — roughly $30 billion in credits and investments, and zero new direct government assistance from the U.S.

Iraqi Foreign Minister Ibrahim al-Jaafari expressed an air of disappointed resignation in a press conference at the close of the conference.

“If we compare what we got today to what we need, it is no secret, it is of course much lower than what Iraq needs,” Jaafari said, according to Reuters. “But we know that we will not get everything we want.”

A good portion of the failure resides with U.S., which true to Trump’s “America first” philosophy, dispelled any notion of taking a proactive role in nation-building and signaled to other donors that their money may be better spent elsewhere, close observers told VICE News.

Now, the U.S. is in danger of “winning the war, but losing the peace,” said Jeremy Konyndyk, who served under former President Barack Obama as head of the U.S. Agency for International Development’s (USAID) Office of U.S. Foreign Disaster Assistance.

The disappointing haul deals a blow to an Iraqi government still reeling from the three-year war against the ISIS caliphate, with limited means to fund its own reconstruction.

The country’s devastated north, where discontent among the Sunni minority fueled the rise of ISIS, is now in dire need of assistance to recover from the fighting. Some $17 billion is needed just for housing the country’s internally displaced population, Iraqi officials have said. In the northern city of Mosul, the UN estimates 40,000 homes are needed. In Iraq’s worst-hit provinces, the poverty rate now exceeds 40 percent and unemployment is rampant.

Failure to rebuild the region risks creating new grounds for unrest and extremism, analysts said.

A fragile peace

“A large chunk of the Sunni community is still living in refugee camps,” said Bilal Wahab, an analyst at the Washington Institute for Near East Policy. “You’d expect there might be an incentive to be more generous…. to stave off the remnants of ISIS by creating jobs for Iraqi youth.”

Beyond the lack of funding, the sign of lukewarm support from the international community puts new pressure on Washington’s preferred leader in Baghdad, Prime Minister Haider al-Abadi, ahead of uncertain elections in May, analysts said.

The underwhelming effort in Kuwait may be perceived by Iraqis as a vote of no-confidence from the international community in Abadi’s government, said Nathaniel Rabkin, managing editor of the newsletter Inside Iraqi Politics.

“The Iraqi government will be embarrassed in front of the Iraqi voters if it’s seen as coming back empty-handed,” Rabkin told VICE News. “Voters are going to blame the government, not the donors.”

Abadi’s defeat could destabilize Iraqi politics and imperil Washington’s priorities, analysts said, setting off a new power struggle among the country’s many fractured groups, and potentially creating an opening for Iran to extend its influence. Even among the Sunni minority alone, some 40 different factions are registered in the elections, Wahab said.

The U.S. is hoping the elections will give Abadi a new mandate that empowers to him to launch an anti-corruption crusade and implement much-needed economic reforms, Wahab said — as well as claw back power that’s been ceded to both Iran and to independent militias, which are largely backed by Iran.

“Iran is now the dominant foreign actor in Iraq,” said Renad Mansour, an analyst with the UK’s Chatham House, by phone from Sulaymaniyah, Iraq. “Iran has deeply penetrated several Iraqi state institutions.”

Considering Abadi’s delicate position, the U.S. decision not to support his call for reconstruction funding appears all the more baffling, observers said.

“The U.S. not pledging is a missed opportunity,” said Wahab. “It’s an American decision that’s going to have very serious consequences on Iraqi politics.”

Mixed messages

U.S. Secretary of State Rex Tillerson prepares for a meeting of a U.S.-led coalition fighting against the Islamic State group in Kuwait City, Kuwait, Tuesday, Feb. 13, 2018. (AP Photo/Jon Gambrell)

Even as U.S. Secretary of State Rex Tillerson himself was flying to the conference in Kuwait City to personally encourage attendees to loosen their purse strings, back in D.C., Trump tweeted that the U.S. was done “stupidly” pumping money into the Middle East.

Despite Tillerson’s best efforts, Trump’s tweet ultimately set the tone for the conference.

Arriving at the donor conference without new funds for reconstruction sent a clear message that wouldn’t be missed by other donors, Konyndyk said.

“I can’t remember a time when we would have sent the Secretary, empty-handed, to a major donor conference,” Konyndyk told VICE News, recalling the Obama administration’s approach. “If you’re going empty-handed, you don’t send the Secretary.”

Despite showing up to Kuwait empty handed, the U.S. hasn’t cut off Iraq entirely. Tillerson announced $3 billion in financing on behalf of the Exim bank, the U.S. official export credit agency, for Iraqi state companies buying American exports.

Yet the details of the plan read like another sign of Trump’s plans to put America first, analysts said. In a statement, Exim Vice Chairman Scott Schloegel said the agreement “will support scores of jobs across the United States over the coming years.”

Konyndyk said the Exim loan facility, coupled with Trump’s tweet, sent a clear signal: The U.S. wasn’t putting skin in the game.

“The bottom line is that the nature of the U.S. announcement, combined with the timing of the president’s tweet, creates uncertainty about the depth of the US commitment to rebuilding Iraq after ISIS,” Konyndik told VICE News.

“If you show up and offer nothing, the message being sent is that the US doesn’t really care about this,” said Rabkin. “It’s hard to get Gulf countries and European countries to donate if the U.S. washes its hands of it.”

Cover image: The 9-month fight to defeat the Islamic State group in Mosul ended in a crescendo of devastation: bombardment that damaged or destroyed a third of its historic Old City in just three weeks. The cost of uprooting the militants was the destruction of large swaths of Iraq’s second largest city, leaving a population that is displaced, exhausted and potentially embittered if there is no reconstruction. (AP Photo/Felipe Dana)