Resolving the Kurdish Question in Iraq

Under the newly appointed Prime Minister Hayder al-Abadi, Iraq now has a chance of cobbling together some form of government that includes the Kurds and Sunnis.  The challenge for Abadi will be to provide the leadership, vision and narrative that can start changing the increasingly worrying dynamics that are fraying the Iraqi state.  Let’s hope he can make a start.  It would be unwise though not to have a Plan B.

One thing is clear, it is not a question of re-creating Iraq as it was before ISIS murdered its way into Mosul.  That has gone.  As President Barzani of the Kurdistan Region noted, ‘post-Mosul’ Iraq is a very different beast indeed and the way it works, if it is to work, will mean Iraq itself will have the change.  How the Iraqi state is structured and how the future government of Iraq manages its relations with the Kurds is among the more profound challenges that Al-Abadi will face not just in the coming weeks of government formation but in the months and years ahead. 

The decision by Baghdad to cut off funds to the Kurdistan Regional Government (KRG) at the beginning of the year fundamentally changed the Kurds’ calculations.   The Kurds saw it as confirmation that their future would be more secure if they could rely on their own resources and not depend on the whims of Baghdad.  That is good, practical economics and common sense, particularly when recent Kurdish experience with Baghdad has included genocide, discrimination and conflict.  And the Kurds have the means to self-finance.  The Kurdish hydrocarbons sector is a model for not only the Middle East but for many other markets.  The upstream oil and gas resources are potentially very significant and the KRG has managed the sector in a way that keeps oil companies happy and incentivised while delivering more than a fair deal for government coffers and ultimately the people.  The KRG will not back down from its belief that it has the right to export oil and gas – it would be crazy not to – and the industry expects that Kurdish exports will eventually continue to find markets.  In short, there is every chance that Kurdistan will reach its goal of self-sufficiency in the near future, whether Baghdad or anyone else tries to impede that or not.

Even if the Kurds do join the next government under Abadi, trust has been depleted; the gap between Erbil and Baghdad in political culture and orientation has deepened and now looks virtually unbridgeable.  It is hard to think of any successful or lasting joint agreements between the two sides in the decades before 2003 or the decade after the removal of Saddam, an event still seen in Erbil as liberation.  To put it bluntly, Iraq has not been able to make the post-Saddam symmetrical federal system and ethno-sectarian balance work.  There is little to no prospect of that changing and so Abadi needs to consider other options.

Options for Abadi

What are they? Post-Mosul, there are a number of different political solutions for Kurdistan’s future:  increased autonomy within current Constitutional confines, asymmetrical federalism within Iraq; bi-national federation with Arab Iraq (either as a resting place or a stepping stone towards independence); confederation or eventual independence. 

There will be better or worse outcomes but however this plays out and in each of these scenarios, the West and US, in particular, will have a strategic interest in a strong, long-term relationship with Kurds in Iraq – whatever form that entity takes. The KRG has been a US ally through good times and bad, and will be pro-market, pro-western and broadly secular for at least another generation and probably beyond.

In virtually every conceivable scenario the Kurdistan Region of Iraq will remain a cohesive and durable entity and the Kurds a resilient society.  Stability is based on a unified national narrative, a commitment to dialogue and democratic values, tolerance of minorities, including Christians, Yezidis, Shabaks, Kakais, Jews, resident Arabs and foreigners all too rare in the Middle East, a pro-market economy and business-friendly investment enlivened by a strong and western diaspora and extremely low domestic support for terrorism/extremism. 

A ‘Twin-Speed’ Iraq

The Kurdistan Region and Baghdad are two different and steadily diverging spaces in many key aspects including language, history, political culture and, now economic planning around hydrocarbons.  Rather than seeking to bridge the gap, it may now make sense to develop a ‘twin-speed Iraq’ policy with a separate ‘Erbil policy’ and a ‘Baghdad policy’ within the framework of a unified Iraq.

This process can be done in a traditional Iraqi way of brinkmanship, sabre-rattling, posturing, and even conflict, or as part of a managed process that would, almost certainly, require some international community midwifery to see this particularly problematic baby delivered; even so, the latter is clearly preferable.

So, what might be a new deal between Erbil and Baghdad look like?

• Baghdad should remove objections and any legal impediment to the sale of Kurdish crude, recognising that the revenues from Kurdish crude will be managed via the already agreed revenue sharing formula, until such a time that Kurdish oil revenues equal or are higher than the constitutionally-agreed 17%.
• Erbil and Baghdad should agree that Kirkuk oil be sold by the State Organization for Marketing Oil (SOMO), or maybe by a new, joint owned, organization (hypotethically, the Kirkuk Organization for Marketing Oil (KOMO)), with revenues split 50%-50% and with a percentage set aside and managed separately for infrastructure construction, development of Kirkuk and security.
• In recognition that the KRG is on a path towards economic viability the ‘17%’ of the national budget that Baghdad sends to Erbil should be scaled out progressively, in keeping with the size of Kurdish exports, and end within the timeframe of the current Iraqi parliament. 
• Erbil to abandon previous compensation claims and to make no future claims on Iraqi government revenues beyond securing the backlog from the beginning of 2014.
• Erbil and Baghdad negotiate a military pact, brokered by Western powers, to coordinate military moves against ISIS, with assistance from Western powers being conditional on the coordination being positive.
• Baghdad to contribute to financing the Kurdish Peshmerga until any decision on the future structure of the KRG, as part of the Iraqi security forces and a key element in the containing of ISIS.
• Recognition of the unique status of KRG within Iraq through an asymmetrical federal model that includes the right to secede from Iraq during the lifetime of the next Iraqi parliament (four to eight years away). This would require a sovereign commitment by Iraq passed and ratified by both parliaments (Iraqi and Kurdish) and the Supreme Court.  Ideally, such a commitment would be witnessed or endorsed by US, UK, Turkey, Iran and Arab League with the UN convening. 
• The border between the Kurdistan Region and the rest of Iraq to be delineated by a UN Commission.

This would be a complex, difficult and in many ways a unique process.  It is also one that many in Baghdad may baulk at, and even some in Erbil due to the short-term commitment to working together it would entail. But such a process would have many benefits: it would remove from the political games of Iraq the destabilising Kurdish Question that has haunted virtually every Iraqi government since the 1940s; it will serve as an example of how to decentralise power in Iraq, to the benefit of other regions of Iraq, not just Kurdistan; it moves the question of maintaining the integrity of the ‘current’ Iraq away from being something that is enforced upon Iraqis by the international system, or by the most powerful Iraqis of the day, and makes Iraq’s future integrity dependent upon goodwill and recognised interests; equally, it provides a process by which Iraq’s Kurdistan Region could peacefully leave Iraq, if the Kurds so desired.

In short, keeping Iraq together in a centralised state is a proven recipe for instability and catastrophic crisis; allowing Iraqis the choice through a decentralised state not only may deliver some sort of stability, but it may also make Iraqis, including Kurds, think that maintaining a ‘new Iraq’ is not a bad way forward. It is also hard to think of any better alternatives.