Tag Archives: Kurdistan Economy

Rise in oil prices should not mask economic cracks and need for reform in Kurdistan

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Oil is the paradoxical treasure and curse. For oil producing countries, exporting oil at a high price normally results in revenue windfalls with enough to assemble large cash reserves.

But this is where the oil curse strikes. It becomes too easy to rely on your immense oil reserves as a simple and effective source of income. But when prices plummet as they have done in recent months, hardship strikes, economic woes kick-in, budget deficits are rife and social upheaval inevitably settles in as the economy goes in decline.

All oil producing countries have felt the bite in falling oil prices, even Saudi Arabia with its huge cash reserves is suddenly feeling the pinch. But for Kurdistan, the economic bite from falling oil prices was much sterner for a number of reasons.

The region was already struggling to pay salaries, even before the decline in oil prices, as Baghdad froze budget payments. Add a fierce war with the Islamic State (IS) that has dragged on for almost 2 years and 1.8 million refugees into the mix and the situation becomes even more fraught.

To compound matters, any attack on its oil pipeline through Turkey quickly leads to an even bigger crisis.

Oil exposes cracks in economies and Kurdistan is no different. Heavily reliance on oil revenues has crippled the region and any country whose fortunes are merely dependent on the spot price of oil is bound to be gripped by turbulence, instability and lose control of its destiny.

So what happens when oil prices begin climb as they inevitably do when they have bottomed out? Oil prices have climbed from 12 year lows to just over $40 a barrel in recent weeks. As welcome as the rise may seem, does Kurdistan breath a huge sigh of relief and look forward to brighter times again or does it truly address the numerous economic cracks that the decline in oil prices have exposed?

Simply put, an ambitious Kurdistan with eyes on independence needs wide economic reforms. Any rise in oil prices should not transform the horizon as the stability and welfare of any country, particularly one surrounded by so much regional fire and volatility, should never be tied to a daily commodity chart that can radically swing.

Kurdistan needs to divest its economy and source of revenues. The overwhelmingly reliance on the population for government salaries is untenable even if the oil prices reach new heights and there needs to be a sustained drive towards self-sufficiency.

When oil prices were high and economy activity was in full swing, the countryside slowly emptied and the cities became more crowded. Kurdistan has a strong reliance on imports for basic goods and its agriculture sector, the bread basket of any economy, needs to be urgently bolstered.

Oil will no doubt remain a key source of revenues for Kurdistan and further declines in economy based on any future drop in oil price is inevitable but by taking new economic reforms, the region will have a much better cushion to ride out the storms.

First Published: Kurdish Globe

Other Publication Sources: Various Misc

New Turkish oil venture signals growing clout of Kurdistan

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As the Middle Eastern socio-political landscape has unraveled in recent years, it has transformed the one-time frosty relations between the Iraqi Kurds and Turkey into one of the most important alliances in the region.

The Arab Spring and the rapidly changing power makeup of the Middle East may have played a key part, but money and the power of economy have echoed louder. Trade between the Kurdistan Region and Turkey is reaching unprecedented heights, none more so than in the field of energy.

The booming economy of Kurdistan is underpinned by its status as the last great oil frontier.  Kurdistan has billion of barrels of oil reserves and remarkably with the majority of the oil not even discovered.

With the oil rush in Kurdistan, Turkey, with an ever-growing thirst for oil to fuel its heated economy, does not want to remain idle while global players capitalise on immense opportunities on its door step.

The growing energy ties between Ankara and Erbil, has not only resulted in strategic and historic contracts between the two governments setting the stage for a rapid rise in trade, but it has slowly led to intertwined destinies of the Turks and Kurds. This drive has led to great unease in Washington, who ironically, only few years ago were frantically trying to reconcile both parties.

The win-win partnership on an economic scale is in tune with the need to redraw strategic alliances and political balance of power in the Middle East. Turkey needs the stable, secular and Western-leaning Kurdistan, in the midst of a Syrian civil war that threatens Turkey at every turn, Shiite domination in Baghdad rekindling animosity and insurgency amongst Sunnis and not forgetting Iran with its nuclear ambitions and its hands deep in regional struggles.

While Syria took center stage in the diplomatic flurries of recent days, leading to the visit of Turkish Prime Minister Recep Tayyip Erdogan to Washington, the announcement by Erdogan as he left on the plane for Washington of a partnership between the state run Turkish Petroleum (TPAO) and US giants Exxon-Mobil to jointly explore for oil in Kurdistan, has significant long-term ramifications.

Not only does Kurdistan and Turkey have the basis for direct exports with the implementation of new oil pipelines, but this places Turkey directly at the grass-roots of the Kurdish oil drive.

According to Erdogan “there’s nothing more normal, more natural than Turkey… to take a step that is based on mutual benefit.” In recent months Ankara has strongly defended their agreements with the Kurdistan Regional Government (KRG) and has also in turn backed the Kurdish rights under the current Iraqi constitution.

The Kurdish oil boom is long the source of Baghdad ire, which views control of oil exports and unresolved nature disputed of territories, as the last placenta by which they can reign in and influence Kurdistan. With contracts with some of the biggest oil companies in the world and strategic agreements with Turkey, Baghdad’s unease has gone into overdrive.

In reality, the oil majors and Turkey know fully well the risks. The ire of Baghdad is considered secondary to their lucrative opportunities and the strategic and political benefits that such moves harness.

These parties are essentially choosing Kurdistan over Baghdad and such measures only makes the KRG more confident in its economic growth, its regional standing and in its stand-off with Baghdad.

Baghdad may have been playing hardball over payments to foreign oil companies, constitutional interpretations and national budget as well as over disputed territories, but with its hands full in the fresh Sunni uprising, maintaining a shaky national coalition and national elections around the corner, it needs the Kurds and Nouri al-Maliki’s government may have to rethink its policies on Kurdistan.

Kurdistan’s message is simple, it will drive on with its national programme and lofty goals, with or without Baghdad.

First Published On: Kurdish Globe

Other Publication Sources: Various Misc.

The missing ingredients in Kurdistan’s economy

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From decades of repression and barbaric rule, the rise to prominence and political prosperity for the Kurdistan Region has been nothing short of remarkable.

As the Region has undergone significant transformation, the expectations of the population have exponentially grown.

Nowadays new airports, luxury malls, classy restaurants, highways and skyscrapers have become an accustomed part of the Kurdish horizon. Long perceived as an existential threat, the only invasion by neighboring countries was from Iranian and Turkish companies flocking to the region to strengthen their hand economically, culturally and politically.

However, whilst the Kurdistan Region has literally become “the other Iraq”, new lofty buildings and brand new cars do not always paint the most accurate picture of economic progression, social equilibrium and the path of development that needs to ensue.

Such rapid progress is unmistakable and has attracted the plaudits of many but in truth the establishment of the foundations of a healthy and vibrant economy goes much further than infrastructure that takes the eye.

Without the establishment and promotion of a number of key ingredients that underpin economic affluence, long-term growth and sustainability cannot be achieved.

There is great risk that the economic growth is faster than the current infrastructure or social apparatus is able to support. At the current time, the price of land and real estate has sky rocketed, with the price of rent been driven to new levels by those relocating across the more volatile south.

Generally, whist the cost of living has rapidly increased, the standard of living has not necessarily kept the same pace.

There are certain dangers that if the imbalances are not adequately addressed, it may not only derail economic progression but also the strategic goals of the Region.

The factors that underline a healthy economy is maintaining and protecting growth whilst controlling inflation. At the same time, ensuring that the economy is sustainable and safeguarded against a number of outside risks that come as a result of globalization.

As such self-preservation is crucial for Kurds to safeguard their current prosperity. After all, the Kurds need no reminders about their not so distant past. Only a few years ago, the Kurds enjoyed frosty relationships with its neighbors who frequently threatened to invade, while less than two decades ago, Kurdistan was subject to genocide and destruction.

Self-sufficiency is pinnacle to the survival and economic independence of a nation. In this regard, agriculture is the cornerstone of an effective and healthy economy and the bread-basket of its people.

Ironically, for a land and a people who established their existence over thousands of years on utilizing highly arable lands and agriculture, Kurdistan has a strong dependency on neighboring countries to feed it.

The government needs to introduce firm incentives for ordinary Kurds to return to agriculture and farming that most abandoned for the dependability of city life. Such people need access to modern tools, subsidies from the government but also the same level of education and public services as they would enjoy in the cities.

One of the reasons people flocked to the cities was partially due to scorched earth policies of Saddam but also due to the contrasting conditions across Kurdistan. While the main cities have witnessed marked progress, this is not necessarily reflected across the entire Region.

The Kurdish market is very much import driven with little exportation aside from oil. As a result, Kurdistan relies heavily on outside parties for everything from building materials to consumer items.

The Region may have an abundance of oil, meaning that it has tremendous purchasing potential but without economic diversity this leaves a fragile economy that is susceptible to outside market conditions. The Region has the potential to export many other items. With adequate infrastructure and production capabilities in the future, the Region can support its own growth and also ensure that money stays internally.

There are simply not enough Kurdish made items, factories or production lines to underpin the economy, and a private sector that is far too embryonic for people to stop relying on the government.

While there is a very weak banking system, no affective system of taxation, an infant IT infrastructure at best and a lack of self-sufficiency, the economy cannot be deemed strong.

There needs to be an economic cycle, whereby as the economy prospers, there is more money to spend and a higher budget for the government who in turn plough more money back into public infrastructure and society.

With the majority of people working directly for the government and essentially reliant upon the state, over 60% of the regional budget is consumed solely by salaries. Whereas in the majority of the Western world, not only is this typically less than 20% but the government has even more revenue through both ordinary and corporate taxation.

The rapid growth in Kurdistan needs new ways of thinking and close monitoring. Quality assurance and compliance to international building and management standards is imperative. Ever increasing construction is fine but can we be sure that they are of the highest standards?

This makes economic regulation of paramount importance. Investment and business must comply with law and be transparent in nature.

With a growing social infrastructure and roads packed with cars, there now needs to be environmental regulations to protect Kurdistan’s future. The environment and the future of the children simply cannot be traded off for more money and infrastructure projects on the ground.

One of the greatest dangers in today’s Kurdistan is the evident divide between the rich and the poor. New luxury foreign style villages may be iconic in our social heritage but ultimately this is confided to those able to purchase such expensive homes. New parts of Erbil aside, old parts still suffer from a lack of basic services.

The Region still has a shortage of electricity, an inadequate sewage system and medical care that is not all encompassing. As the economy advances, there needs to be a social welfare balance to narrow the rich-poor divide and ensure taxes are paid based on one’s capability.

While, the Kurdistan government has an investment law that rivals any of that in the Region, this should not be at the expense of encouraging a skilled local workforce which is currently lacking.

In this light, education and training should be the building blocks of the economy. The Region is overly reliant on foreign skills, which more training, qualifications and education can address.

Above any of the factors mentioned above, the mentalities of the people need to change for real progress to ensue. There is a lack of professionalism amongst the workforce and a lack of accountability in employment.

People often want to do the minimum to become as rich as quick as possible. Once the private sector really takes hold, this is when there can be more professionalism, competitiveness and a desire to improve skills sets.

In Western countries, economic conditions and business dealings are bound by tight regulations and a systemized way of working. Workers have clear contracts with employers that drive their terms and conditions, salary and working hours, with both sides afforded rights under legislation. In Kurdistan, such systemized working conditions are lacking and employers do not always drive the highest of returns.

This is because too many jobs in Kurdistan are provided by the government which become a safety net and are often around providing services such as security. In the West, which is based primarily on skilled professions and working for corporations, the fundamental aim is profitability. Every individual directly or indirectly works towards growing the company portfolio and its bottom line. As such, the employers are often under fierce pressure to deliver under a cut-throat environment.

In Kurdistan, there is not the same pressure on employees to deliver or meet certain obligations.

Once ordinary Kurds start to develop their own businesses and hire their workforce, competition will naturally increase which will put an undoubted onus on qualifications and the professionalism of candidates.

In addition, much of the basis of Western society is about forward planning, investment and notion of ensuring a better tomorrow. Too often in Kurdish society, it’s a case of live for today and worry about the future later. Kurds can start thinking about investing for the future and protecting what they have today.

This mentality of lack of forward thinking is not exclusive to finance, the same rule applies to the environment and attitude to healthy eating and fitness. Littering and the abuse of our landscape can be ignored today but will certainly bite even harder in the future.

Ultimately, it far easier to erect blocks and cement for plush buildings, than create an affective skilled and professional workforce that can underpin an efficient economy.

First Published On: Kurdish Globe

Other Publication Sources: eKurd, Various Misc.

Kurdistan manoeuvres to become a major feeder to Europe

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Commencement of oil exports and discussion on revising Nabucco gas pipeline using Kurdistan supplies marks a new milestone in the Kurdish experience. Kurdish joy at such developments is easy to see, as they strive to become a strategic “bread-basket” of Europe, Turkey and also Iraq. However, the “battle” is not quite won.  Key decision remain to be made by regional and European powers that will redefine the shape and existence of the Kurdistan Region

If the “new” Iraq is to be taking seriously, then the first fundamental step is to abide by the core principles that underline the new Iraq. Iraq is a democratic country, with an elected constitution, is based on the equal status and rights of all its ethnicities, enforced by the principles of federalism they have chosen to adopt.

However, in Iraq progress has been painfully slow and negotiations have been ubiquitously tainted and protracted. Amongst the fundamental disagreements in the new Iraq, is how to share and develop its immense oil wealth.

In the absence of a national hydro-carbon law, the Kurdistan Regional Government (KRG), has drafted its own regional oil legislation and signed a number of contracts with foreign oil companies.

Constant bickering between Baghdad, who has deemed all such contracts as “illegal” and Erbil, has served the benefit of no side. Oil has been misused for decades in Iraq, particularly by Saddam Hussein, to declare war on neighbouring countries and oppress the Kurdish population.

One can only imagine what kind of Iraq we would have today, all of Iraq for that matter, had the oil been managed affectively and used with regards to the rights and benefits of all the population.

The Kurdistan Region is awashed with invaluable oil and gas reserves, and the Kurds, particularly in light of their plight under the “old” Iraq, are owed by the new face of Baghdad, to enjoy the privileges of the divine gift of nature and utilise oil for productive benefit – to see their region prosper, expand and modernise, rather than ironically use oil from their historical lands, to bomb those very lands.

The real sticking-point is the new prominence of the Kurds, after years of serving in the back pages of the history books. The worry of Baghdad is the strengthening of the Kurdish experience and their potential new role as the “bread-basket” of Europe. With Oil exports finally approved and talk of reviving the Nabucco gas pipeline, a project backed by the European Union to counter the over dependence on Russian supplies, Kurdistan could well enter a new chapter in its history.

How will their long-time adversaries, such as Turkey and Arab nationalists, feel about a new strategic Kurdistan that can support the world rather than merely rely on world support, is open to debate. Clearly, the problem in both respects is seeing a Kurdistan that escapes under their direct sphere of influence and into the hands of other grateful recipients.

Approval of oil exports

Oil exports were finally approved from the Kurdistan Region in early May. This is a symbolic milestone in Kurdish history, but one that will ultimately benefit the whole of Iraq. Revenues from oil sales will be deposited directly into the federal government account, thus the Kurds get only a 17% benefit from this, while the rest of Iraq, who has ironically been at such loggerheads with the idea, will a receive the other much needed 83% of these revenues.

The region is onset to commence oil exports on the 1st of June with Norwegian oil company DNO, completing preparation to export an average 60,000 barrels a day from the Tawke oil field to the Turkish port of Ceyhan via a new 45km pipeline.

Oil exports in the Taq Taq field, roughly constituting 40,000 barrels per day would also begin via tankers and existing pipelines in the near future.

Oil or “black gold” as it is referred, is a bonus or gift to any country. The long-standing disputed over control of Kirkuk spanning several decades, is ultimately heated by the very simple fact that it is one of the richest parts of the world.

Baghdad’s evident reluctance in seeing Kurds control oil or Kirkuk for that matter, hinges on the fact this will facilitate a Kurdistan that is much stronger, more stable but ultimately one that has little reliance on Baghdad.

Kurdish self-sufficiency could be completed once it gains significant oil revenues that it is entailed too. Hence, this is the source of anxiety emanating from Turkey. Seeing a Kurdistan Region that is growing in stature and confidence, with European and world powers increasingly keen to benefit from its vast resource, places Turkey in a different corner.

Of course, we must not forget that the control of oil reserves has long been linked by analysis and experts as the final piece of the Kurdish jigsaw in obtaining independence if it chose that path. In simple terms, as a largely autonomous federal region or fully independent state, oil makes these dreams economically viable.

Furthermore, the Iraqi constitution has defined a new Iraq that may be against the wishes of neighbouring countries. However, such neighbours have to realign their policies and relationships in line with this reality.

The increasing warming of the Turkish government in recent times to the KRG is testimony to the realisation of this new reality, however, hard it may be to swallow.

Now European talk of using the Kurdistan Region to revive the Nabucco pipeline that flows through Erzurum in Turkey, places the Turkish government in yet another conundrum.

Reviving the Nabucco gas pipeline

Austria’s OMV and Hungary’s MOL have teamed up with Crescent Petroleum and Dana Gas companies from the United Arab Emirates to extract the gas from Khor Mor and Chamchamal fields in the Kurdistan Region.

The consortium have expressed their belief that supplies will be sufficient to initiate the long- planned Nabucco pipeline, designed to extract gas from central Asia, after meeting local needs and Turkish demand.

The key problem however, is Baghdad’s reluctance that any agreements can be signed without its approval. Kurds, in the same manner as the oil stand-offs have insisted that such agreements over gas exportation is backed by the terms in the Iraqi constitution.

Whether European countries and particularly Turkey, for which Nabucco remains an important project, presses ahead with the Kurdish project without tacit approval from Baghdad, will have great significance for the KRG and the region.

This wills legitimise the Kurdistan experience in another way – a way that is not connected to Baghdad, forming a new strategic position for the Kurdistan Region.

While Turkey remains highly-reluctant to effectively rubber stamp Kurdish “independence”, clearly the Kurdistan Region is on the road to realising its potential as a key entity and a strategic partner of the West.

This journey may have a long way to go, but in the not so distant future, the Kurds will no longer survive based on hand-outs from states, but will be making their own crucial “handouts”.

After all a pro Western, non-Arab secular democratic state that is close proximity to Europe and with immense natural resource doesn’t come along too often.

What now for Baghdad?

In spite of the agreement to authorise oil exports from the Kurdistan Region, Baghdad is mindful that this does not serve as a carte-blanche for the region. Baghdad is still very much against the principle of Kurdish “unilateralism” and is still keen on forging a stronger centre at the expense of federalism.

However, a number of factors may sway opinion in Baghdad. Firstly, the drastic hit that the national budget has taken with the fall in oil revenues has greatly impacted the Iraqi economy and reconstruction projects that have been ear-marked. Allowing the Kurds to bridge that gap, has become more important than nationalistic quarrels.

Secondly, if neighbouring, European countries or the European Union for that matter, sides with the Kurds and accepts they are not breaking the “law” and only following a constitution which gives them their democratic rights, then to save embarrassment, Baghdad may be better to accept the new Kurdish position and affectively be seen to have made the decision to “endorse” it.

With talk that Kurdish export capacity could reach 1 million barrels of oil in just several years, this may be time for celebration for Kurds, Iraq, the region and Europe. Perhaps, all sides can win after all by working with each other than against each other.

First Published On: Kurdish Globe

Other Publication Sources: Peyamner, Various Misc.

Opening Portals – the Kurdish Drive to Foster Cultural, Economic and Political Ties with the Rest of the World

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As the Kurds strive to continue their development and advancement apace, ironically it is neighbours within Iraq that are proving the obstacle

After years of neglect and isolation in the aftermath of the setup of the Kurdish safe haven in 1991, and decades of literal repression and destruction before that, the Iraqi Kurds have been as keen as ever to open political portals and cultural and economic channels to the outside world with view to building vital bonds and strategic relationships with the international community that is so crucial for long-term survival. 

De-facto relationships and diplomatic understandings were common between 1991 and 2003, but with hostile neighbours on every side, not forgetting in Iraq itself, it is only since 2003 that the Kurdish region has been truly able to break from its enclosure.

The Kurdistan Regional Government (KRG) is now enshrined in the Iraqi constitution and the region has experienced an economic boom and in a short period of time implemented a number of infrastructure projects and established notable social and educational institutions. The region has been the focus of much attention, particularly as the rest of Iraq has been devastated by bloodshed, insurgency and a rather rocky transitional road to democracy.

With the new-found prominence and stability in Northern Iraq, the Kurds have steadily opened up to the world. Mentioning ‘Kurdistan’ in the same breath as Iraq is common with the region no longer perceived as a de facto and isolated piece of Iraqi land.

Opening Portals to the Outside World

The Kurds have worked tirelessly to entice much-needed foreign investment and to win international recognition. After all, the Kurdish infrastructure was all but bare after decades of complete neglect by successive Iraqi governments. Everything from schools, power plants, hospitals, roads and shopping centres was needed to bring the region inline with the fast growing requirements of the population and its emerging economy.

While progress from a virtual standing start has been notable, much more progress remains and the building of core infrastructure is a long-term project. Key assistance of global powers is needed for Kurdish prosperity to assume the next gear.

The Kurdish leadership have done well to build bonds with key countries. The recent international outcry against a possible Turkish incursion into Northern Iraq was as much do with the easing of the PKK-standoff as any real US or Iraqi action.

For the Kurdish region to solidify as a credible entity, formal recognition is of paramount importance. This week Russia opened a consulate in Arbil, serving as a great political symbol and a proud token for the region.

The opening of the Russian consulate is the second accredited consulate, following the inauguration of the Iranian consulate.

Once a few other European and regional powers follow suit, the number of consulates springing up in the region will only increase at a more rapid rate. Similarly, the hardest task is winning support of the first few key airliners and reputable international companies, when the initial symbolic contracts are signed, this sets a positive precedence for others to follow suit.

News of the opening of a Russian consulate was followed by the opening of a regional UN office in Arbil. Earlier this year, Greece had announced a decision to open a consulate in Kurdistan. Currently, a number of countries including the UK, France, US and the Republic of Korea, maintain diplomatic representation in the region.

Meanwhile, with the aim of boosting ties and economical relations, the Kurdish government announced intentions to open 15 regional offices abroad, in mainly key European countries. 

The KRG has worked particularly hard to foster trust and mutual ties with neighbouring countries. Iran and particularly Turkey, perhaps still a long way from official and all-important acknowledgment of the KRG, has played a major role in the economic advancement of the region.

A Land Far from Baghdad

They key problem for Baghdad in the last four years, is that while they have been battling to get grips with security and formation of an elusive national unity government, development and reconstruction has been largely sidelined.

Whilst the KRG is not dogged by the same disasters further south, they have managed to take the lead in development and reconstruction, while aggravating Baghdad in the process. Arguably, the mess in the rest of Iraq has worked in the Kurds favour, facilitating their drive and determination to go alone. After all, why should all portions of Iraq suffer and linger indefinitely, whilst the majority of violence is in mainly Arabic neighbourhoods.

Furthermore, their strategic standing as key allies to the US has allowed them to leverage US support at key times and work on developing their region at a more productive rate.

Officially Kurdistan rejoined the Iraqi framework in 2003, but in all but name, the Kurds have continued as a de-facto independent entity.

Clearly, many a nationalist voice in Iraq have expressed their discomfort and anger at literal Kurdish separation and even today the Kurds are still viewed by some with suspicion.

The current stand-off between the KRG and Baghdad over the authorisation of oil contracts is testimony to this. Much to the dismay of the oil ministry in Baghdad, the Kurds have signed 15 exploration and development contracts with international companies since passing their own law in August.

Meanwhile, the chance of passing a national hydro-carbon law is fast-evaporating after months of bickering and protracted negotiations.

Iraqi Oil Minister, Hussain Shahristani, has branded such agreements by the KRG ‘illegal’ and deemed all contracts as void. In his recent speeches, Shahristani even went as far as saying that they would blacklist all companies who negotiate with the Kurdish administration and warned the KRG leadership that they would be prevented from exporting oil.

Can the Iraqi Tiger Change its Spots?

In further heated exchanges this week, the KRG delivered a damning verdict on the statements aired from Baghdad. Clearly, talk of an understanding by Baghdad with all neighbouring countries preventing the exporting of oil by the Kurds, ruffled the politics feathers of the north and reeked of regional conspiracy.

A broad agreement with neighbours historically hostile to the Kurds speaks volumes about Kurdish perception in Baghdad. Such Arab chauvinism as witnessed so brutally under Saddam Hussein is still alive in Iraq and it is delusional to believe that just because one Baathist leader is eliminated and democracy is proclaimed, that the roots of Baathist chauvinism no longer remain.

The idea of a broader Baghdad cooperation with neighbouring countries reinforces the belief and paranoia in the north, that no one in the region really wants the Kurds to succeed. It only encourages the age old myth amongst Kurds that they have no friends but the mountains.

Key facts about the essential fabric of Iraq can be swept under the political rug by declarations of federalism, plurality and national unity but in truth the key problems presiding over Iraq are deep rooted. Iraq is an artificial framework of Kurds and Arabs and Sunnis and Shiites. No matter how much democracy and multi-ethnic harmony and co-existence is preached, Iraq will always remain fragmented with hostile factions holding deep suspicions and historical mistrust for each other.

The Kurdish Drive Towards Self-Sufficiency

In the case of development, while the Kurds are reaching out to the world for investment and recognition and undertaken oil deals in the unilateral progression of their economy, this has only threatened to cut the last remaining ties between the north and south.

Baghdad, anxious about national sovereignty and a deadly break-up of the country, is keen to maintain some jurisdiction and stranglehold on the north. If all economic dependencies were severed, then Baghdad will all but lose any influence and control over the Kurdish administration.

Ironically, as the alienation between the Arbil and Baghdad administration only increases, the gulf between the north and south, socially, economically and politically only widens.

A young generation of Kurds are now accustomed to a society of relative freedom, far away from the Arab dictatorships of the past. The Iraqi flag is seldom seen and Arabic is slowly diminishing as second language in the region. Over time, the social ties between both sides may evaporate further if the rest of Iraq continues to perceive the north as some kind of rogue break-away state, rather than promote a sense of common unity and brotherhood. With their own parliament, army, flag and customs, Kurdistan will over the years become even more distant from the rest of Iraq.

With a drive towards self-sufficiency, their will reach a time in the near future, where there will be any lack of reliance on the south. This is perhaps the real contributor to government feet-dragging over the issue of implementing article 140 of the Iraqi constitution.

Lack of Desire to Implement Article 140

Once a referendum has finally been conducted, with the likely annexing of Kirkuk to the KRG and its huge oil-wealth along with it, the government fears a more deepening break-away by the Kurds. The Kurds are likely to press-ahead solitary with their development and strategic standing, firstly for a period of time under the Iraqi umbrella but at some point in the future  as a fully independent state.

When you become self-sufficient, have huge economic under-pinning and all the institutions to become fully independent in all but name. The change of the ‘name’ itself, to mark official independence would be much easier and inevitable.

The Kurds feel that they have been patient for far-too long about the proposed referendum on Kirkuk. A referendum was due to be arranged by the end of 2007 to decide the final status of Kirkuk. However, when a census set for the end of July was missed, a delay became all but predictable.

In reality, the writing has been on the wall for many a year now. Firstly, under the Transitive Administrative Law (TAL), calling for the normalisation of Kirkuk, the committee setup under Paul Bremer’s supervision (former head of Coalition Provisional Authority) was laboured and unhurried to say the least.

Later Kirkuk’s normalisation was enshrined under article 140 of the Iraqi constitution, which was elected by over 80% of the Iraqi population in October 2005. However, two years later and progress has been painstakingly slow. Fair enough, technical obstacles have halted progress but most obstacles were anticipated long before the last few weeks remained to implement the article and could have been mitigated in 24 months.

The key issue was the idea of caving in to the Kurds. As neighbouring countries would notably observe, if Baghdad stalls and delays for the foreseeable future, once it has recovered sufficiently and has stabilised, it may then have the power to postpone such a debate indefinitely.

Perhaps the speed of development in the Kurdish north has taken Baghdad by surprise. If the Kirkuk referendum is completed and the Kurds are allowed to press on with oil contracts unilaterally, this will give the carte blanche for Kurds go their separate path as the Iraqi engines further south misfires and stutters for many more years to come.

Time for Practical Steps

This week KRG Prime Minister Nerchirvan Barzani stated his dismay at the frequent delays over the settling of the Kirkuk issue, “The Kurdish people and the KRG has been patient thus far, waiting for a peaceful and legal solution. The time for talks has passed, it is now time for practical steps.”

Barzani expressed his reservation at a lack of seriousness employed by the federal government in Baghdad. While they have worked hard to compromise, promote accord amongst warring factions and reach agreement as coalition partners in the Iraqi National Assembly, its demands have been continuously ignored.

As calls by Turkey, Iran and some elements in the US and Iraqi government have intensified to postpone the referendum on Kirkuk, fearing that as a microcosm of Iraq, it will act as powder-keg for civil strife and bloodshed, ironically for the Kurds, it is the delay of this issue that will ultimately spark civil war and mayhem.

Even the US has been hesitant to employ enough pressure on the government to fulfil their obligations on the normalisation of Kirkuk. Only in August, U.S. Ambassador to Iraq, Ryan Crocker expressed much scepticism that any referendum would take place by end of the year, citing the “lack of preparation, sectarian wrangling, and missed deadlines”.

Some Sunni groups had warned that the holding of the referendum would harm the integrity of Iraq and promote partition. However, Baghdad has come to take for granted the support of the Kurdistan Alliance and the KRG, and has frequently called their bluff.

The Kurds have long been accommodating about delays and have compromised over the new shape of Iraq, while been often by-passed in certain circles in Baghdad. It is time for the Iraqi government to deliver and for the Kurdish leadership to follow boldly on their threats if Baghdad continues implementing motions which directly favour progression of Kurds at a leisurely pace.

Echoes of Baath Nationalism

While Arab nationalists object to forcibly relocating Arab settlers, it is ironic that the forcible resettlement of Kurds in the first place is been forgotten. At least, the Arabs, many of whom were simply given houses and lands of ousted or killed Kurds, can receive $15,000 dollars and a plot of land in their lands of origin. The displaced Kurds had the choice of relocation or a bullet. 

The ultimate litmus test for the new democratic and federal Iraq is the appetite to adhere to democratically-elected articles. Key articles such oil exploration and sharing, federalism and article 140, were voted in favour by millions of Iraqis.

If wishes of a nation and result of the ballot box are ignored, then any glimmer of hope in Iraq, if there was any to start with, has all but vanished.

The recent by-passing of Kurds in Baghdad negotiations with Turkey over the PKK, further represented Baghdad claims of sovereignty over all of Iraq and was designed to undermine the Kurdistan leadership, in the face of regional pressure.

Somewhat ironically, as Baghdad tries to keep a noose and influence on the north and alienates the region, this in turn actually increases the divide between Arabs and Kurds even more

First Published On: Kurdish Globe

Other Publication Sources: Peyamner, Various Misc.