The Middle East as a whole without a radical Iran. As for Iraq, they would be in a much stronger position. Because of there being no war, Saddam won't look to invade Kuwait, thus butterflying the Gulf War. Therefore, American opinion of Iraq is more calm, though the government may still see Saddam as a ruthless leader, but not on the levels of Gaddafi. It's likely that Saddam will continue reign over Iraq successfully, for the time being. With a Shah-led Iran, Arabic dictators, like Saddam, would likely be more inclined to help the Soviets destroy the Taliban insurgents. What happens in Iraq is speculative, since there will be no Gulf War or invasion in 2003. So whatever Iraq does afterward is up for imagination...., until the Arab Spring. No matter what specific decision is changed, there will be uprisings in Arabic countries and opposition will rise in demand for change. Saddam will not avoid this. Rebel groups, especially the Kurds, would likely rise to overthrow Saddam and take over Iraq. However, there is one significant change from OTL: ISIS. ISIS gained much support Iraq thanks to the fall of Saddam after the American invasion. Saddam would not have allowed ISIS to prosper in his country and would seek brutal ways to suppress, not even using chemical weapons. This doesn't mean that ISIS won't exist, but it'll likely be on a far smaller scale and less significant in the Middle Eastern chaos. Iraq will likely receive the backing of Russia, much like Putin supported Syria. America would fund the rebels, as the Western world looked at the Arab dictators with a general distain. What happens afterwards is uncertain.