Bloomberg News

Iraq’s Kurds Weigh Dealing With Baghdad or Going It Alone

June 24, 2014

Peshmerga forces in Kirkuk

Kurdish Iraqi Peshmerga forces deploy their troops and armored vehicles on the outskirts of Kirkuk, Iraq. Photographer: Marwan Ibrahim/AFP/Getty Images

U.S. Secretary of State John Kerry met with leaders in Erbil, the Iraqi Kurdish capital, today to make his case for national unity to the ethnic minority that may hold the only winning hand in the country’s sectarian turmoil.

Kerry held talks with Massoud Barzani, president of the Kurdistan Regional Government, and other Kurdish leaders, bringing the same plea for cooperation he delivered yesterday to Shiite and Sunni politicians in Baghdad.

In advance of Kerry’s arrival from Amman, Jordan, Barzani signaled yesterday that the “time is here” for the Kurds, a minority of 6.5 million, to decide on independence instead of what’s now a semi-autonomous state within Iraq. As fighting rages between extremists and Iraqi forces, the Kurds are in a position to be deal makers in political talks for a new government.

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“During the last 10 years, we did everything in our ability, we made every effort and show all flexibility in order to build a new democratic Iraq,” Barzani, president of the Kurdistan region in northern Iraq, said in a CNN interview. “But unfortunately, the experience has not been successful.”

Speaking through a translator, Barzani told Kerry today that the Sunni insurgency created a “new reality and a new Iraq.”

Tectonic Shift

Kerry told CNN in an interview after a 50-minute meeting that Barzani “made it clear that he wants to participate in the process, that he wants to help choose the next government” of Iraq. Kerry didn’t say Barzani disavowed Kurdish aspirations for independence.

Should Iraq Split In Three?

A decision to go forward with independence would affect not only the future of about 17 percent of Iraq’s population of 33 million, but also whether the nation of Iraq dissolves into a loose federation or disappears. Either outcome would be a tectonic shift in regional politics with implications for neighbors Turkey, Iran and Syria, which also have Kurdish minorities.

The U.S. has said it wants Iraq to maintain its territorial integrity and seek a peaceful outcome through a new government that respects the interests of Sunnis, Shiites and Kurds. The Obama administration would strongly oppose Kurdish independence now as “another nail in the coffin of the Baghdad government,” said Morton Abramowitz, a senior fellow in Washington at the Century Foundation and a former U.S. diplomat.

Kirkuk’s Oil

Kurdish Peshmerga forces this month moved into the long-disputed Kirkuk oil fields as the Iraqi military fled militant Sunni fighters from the Islamic State in Iraq and the Levant, or ISIL. Should the Kurdistan Regional Government take charge of the oil facilities in Kirkuk, they would add almost 9 billion barrels in proven crude reserves to the 45 billion barrels it already controls.

Iraq, excluding such an enlarged Kurdish region, would be left holding 141 billion barrels, still the world’s fifth-largest deposits.

Kurdistan also has attracted international oil companies, including Irving, Texas-based Exxon Mobil Corp. (XOM:US) and Paris-based Total SA. (FP)

As U.S. officials press for a compromise in Baghdad that would thwart the Sunni rebellion, the Kurds may seek to extract a price.

Kurdish Demands

The Kurdish regional government is funded largely by an allocated 17 percent share of Iraq’s federal budget, and Kurdish leaders may seek to increase that. Complicating matters, Baghdad has cut payments to the Kurds over the past six months because of a dispute over Kurdish oil contracts and exports. That’s caused a financial crisis for the regional government, which must pay civil servants and Peshmerga fighters.

Now the Kurds, who are predominately Sunnis but not Arabs, may make their continued control of Kirkuk part of the terms for accepting a political deal, according to Judith Yaphe, a former senior analyst on Middle Eastern and Persian Gulf issues at the U.S. Central Intelligence Agency.

“They’ve got demands, at this point, not requests,” Yaphe said.

That may have unintended future consequences because “no Arab wants to see the Kurds walk away with or keep what they see as Arab territory,” she said in an interview. “It will be a long-festering sore, which is only going to lead to problems later.”

Separate Pipeline

The Kurds for years have had disputes with the Iraq government over oil revenue and territory, especially around Kirkuk. Tensions increased last month when the Kurds started exporting crude to Turkey through a separate pipeline without approval from the central government.

The Kurds, who control about a fifth of the country’s territory, may now be in a stronger position to play a role in maintaining Iraq’s stability, said a U.S. official who wasn’t authorized to be identified discussing the issue.

Under governments since the U.S. invasion toppled leader Saddam Hussein in 2003, Iraq has split the most senior national government positions among its three main sects. The prime minister has been a Shiite Muslim, the speaker a Sunni Muslim and the president a Kurd, most recently Jalal Talabani, a past mediator between Sunni and Shiite politicians who’s been sidelined for months by health issues.

‘Greater Resources’

The U.S. continues to hear from all groups that the Kurds want to retain the presidency, the U.S. official said.

Jon Alterman, a Middle East analyst at the Center for Strategic and International Studies in Washington, doesn’t think the Kurds will break away now.

“If you’re looking for the decisive moment for Kurdish independence, I don’t think this is it,” he said in an interview.

By negotiating with Baghdad, the Kurds could gain greater autonomy, “greater resources and all the things they want” short of independence, said Alterman, who served as an adviser to the Iraq Study Group, also known as the Baker-Hamilton Commission, in 2006. “This is an opportunity for the Kurds to improve their position.”

Any political solution must be based on “the new reality on the ground,” Barzani said in a statement after a June 21 meeting with U.S. ambassador to Iraq Robert S. Beecroft.

‘Deserve’ a Nation

Kenneth Pollack, senior fellow at the Brookings Institution’s Saban Center for Middle East Policy, said it’s “very likely” that the Kurds will move toward independence over the next 12 months, and that the U.S. shouldn’t oppose it.

“The Kurds are a nation,” he said. “They deserve to have an independent country.”

The Kurds have built an autonomous region notable for its prosperity and stability in contrast to the rest of Iraq. They’ve talked about independence for many years, held back by opposition from neighboring Turkey, Syria and Iran, which have their own restive Kurdish populations, and by the challenges of making their state economically viable. The question of viability may be resolved if the Kurds keep control of the Kirkuk oilfields.

Regional politics also come into play because an independent Kurdistan would be a landlocked nation.

Barzani last week dispatched his nephew, KRG Prime Minister Nechirvan Barzani, to Iran to discuss the ISIL insurgency. It’s likely that Iranian officials discouraged any Kurdish moves that would weaken Iraq’s Shiite-led government, which they support, said Yaphe, an adjunct professor at George Washington University’s Elliott School of International Affairs in Washington.

Turkish Reaction

The Sunni Arabs of ISIL have largely avoided clashes with the Sunni Kurdish Peshmerga, which Yaphe said has led to suspicions that the Kurds have some sort of tacit deal with the Sunni Arab militants that wouldn’t please the Iranians.

A “key factor” in Kurdish calculations may be the Turkish reaction, Zalmay Khalilzad, a former U.S. ambassador to Iraq, said on a conference call last week arranged by the Atlantic Council, a Washington policy group.

Turkey, which has long opposed the idea of an independent Kurdistan, is the more important economic partner. It is the pipeline outlet in the Mediterranean for Kurdish oil and a major source of investment capital.

“The Turks now have a big economic interest there, a huge economic interest,” said Abramowitz, a former U.S. ambassador to Turkey. “And the Turks and Kurds are sort of buddies at this point.”

Still, “I don’t think Turkey wants to see Iraq disintegrate,” he said.

(An earlier version of this story corrected the name of the Islamic State in Iraq and the Levant and showed that Iraq’s payments to Kurds are from federal budget.)

To contact the reporters on this story: Terry Atlas in Washington at tatlas@bloomberg.net; Nicole Gaouette in Erbil, Iraq, at ngaouette@bloomberg.net

To contact the editors responsible for this story: John Walcott at jwalcott9@bloomberg.net Larry Liebert


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