this article is published in collaboration with Le Monde Diplomatique Kurdi
In the past months, Iraqi Kurdistan has been embroiled in interminable negotiations with the Iraqi federal government on the one hand, and beset by its own political discord on the other. This combination of challenges have put the autonomous government (KRG) into a serious institutional crisis. The federal government’s decision to allocate 12.6% of its budget to the KRG in exchange for the annual delivery of 400,000 barrels of oil to Baghdad was not well received in Erbil. Meanwhile, tensions are mounting between the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK), the two parties dominating the Kurdish political scene. These internal tensions are further weakening the KRG’s negotiation capacity vis a vis the federal government who remains determined to reassert its authority over trade and exports in Iraq.
The Oil Imbroglio
Bad news has been piling up for Kurdistan since March 23 2023, when an international trade court ruled in favour of Baghdad, which had accused Erbil of illegally exporting oil from its region without the approval of the Iraqi Oil Marketing Organization (SOMO) since 2013. Following this decision, oil companies kept withdrawing from the Kurdish region in the face of Baghdad’s warnings that they would be sanctioned if they remained in business in the KRG without their approval. Iraq has also lowered the transit fees for its oil via the Turkish Ceyhan pipeline, further sidelining the KRG’s economic independence. By doing business with Erbil, Ankara received a decent rent for transiting Kurdish oil to the Ceyhan sea terminal, but Baghdad now has international law on its side to regain control over exports and tariffs.
Instead of complying with Baghdad’s demands, the Turkish government decided to close its pipeline until a new agreement is reached. “Turkey has a whole range of pressure tactics at its disposal. It also limits the flow of water on the Tigris river with all the dams it controls upstream of Iraq. This has a catastrophic impact on the environment in the Mesopotamian basin, but it’s a formidable weapon for advancing in negotiations,” explains Harry Istepanian, an independent water and energy expert and consultant. The commercial court also ordered the Turkish government to pay a fine of two billion dollars to Baghdad (far less than the thirty billion claimed by Iraq to compensate for its loss of earnings when the KRG unilaterally exported its oil). However, Mr Istepanian explains, the Turkish authorities are determined to impose their timetable in order to pay their debt in instalments.
In this context, the KRG finds itself vulnerable and dependent on the outcome of negotiations between Baghdad and Ankara. But Turkey also understands that it needs Erbil to remain a key player in Iraq. “Ankara knows that the more the KRG succeeds in imposing itself, the more it limits Baghdad’s influence, which increases Turkey’s room for manoeuvre,” explains Sardar Aziz, former advisor to the Iraqi Kurdistan parliament, researcher and analyst. “The KRG and Turkey have developed close economic, security and energy ties. By allowing Erbil to export its oil, Turkey has established a balance of power between Erbil and Baghdad. The decision of the International Court of Arbitration [in Baghdad’s favor] reduced Erbil’s power, but by no means put an end to it”, the expert added. This is why a KRG delegation was present at a meeting between the Turkish and Iraqi delegations.
Although the international arbitration intends to reaffirm key points of the Iraqi constitution, which stipulates that the KRG must make the revenues from its oil exports available to Baghdad and that Baghdad must finance the Kurdistan budget in return, there are still many legal uncertainties as to the amount that should go to Baghdad. “The constitution refers to oil fields already in existence when it was drafted (in 2005), not to future fields. In fact, the KRG would theoretically have the right to exploit and export its production without referring to Baghdad”, says Mr. Istepanian. But unresolved details of this sort are plenty when it comes to the dispute between Iraq and its autonomous Kurdish region. Unable to set the terms of their “oil for wages” pact in stone once and for all, the two authorities are forced to renegotiate the terms of their agreement almost every year.
Institutional blockade
In a bid to regain momentum, the KRG recently filed a complaint with the Iraqi Federal Supreme Court, stating that several articles of the budget agreement presented by Baghdad did not respect the spirit of the Iraqi constitution. Pending a decision by the Supreme Court, the stalemate persists between Erbil, Baghdad… and Ankara.
But other obstacles have been placed in the way of Kurdish institutions in recent months. The mandate of Kurdish MPs expired on November 22. The parliamentarians therefore took the liberty of extending their mandate until the end of 2023. The KRG also voted to postpone the regional legislative elections for a year following serious political disagreements over electoral constituencies that favour the KDP over other parties in the region. In response, the federal government stipulated that this postponement was illegal. “We are in a legal vacuum: the Kurdish parliament is no longer recognized by Baghdad as a legal entity that can legislate or supervise elections, because it has exceeded its mandate,” sums up Winthrop Rodgers, a journalist based in Iraq and covering news for several outlets.
To resolve the crisis, the president of the Kurdish region, Mr. Nechirvan Barzani, has officially appealed to the Independent High Commission for Elections in Iraq (IHEC) to supervise the ballot itself. While awaiting a formal response from the IHEC, many experts remain doubtful it will provide the KRG with a solution: “The IHEC will probably not be able to supervise the Kurdish regional elections before the end of its mandate on January 7, 2024. It is already busy preparing for the regional elections in Iraq next December. This means that the KRG’s administrative crisis is likely to last much longer than we think – potentially several years,” analyses a jurist and adviser to the Kurdish parliament who did not wish to disclose his identity.
Fears of infighting
According to Mr. Sardar Aziz, the crisis is political before being institutional. In the KRG, the dominant parties (PUK and KDP) are afraid of losing the upper hand over their rivals. By supporting an electoral reform in the KRG that would divide it into several electoral districts, the PUK and numerous opposition parties are hoping to limit the KDP’s hold on Iraq’s Kurdish institutions. The rise of the impetuous Pavel Talabani within the PUK has considerably strained relations with the KDP. The high level of tension between the two movements raises the spectre of a fratricidal war like the one that bloodied the Kurdish region in the 1990s.
Historically closer to Turkey, the PDK is at odds in every respect with its PUK rival. Following the Kurdish civil war, the former gained military control of the regions of Dohuk and Erbil through American mediation, while the latter now dominates the province of Sulaymaniyah. The PUK is also close to Iran, for whom it is an important partner at economic (oil and dollar trafficking) and security level. For this reason, Teheran will not let down its ally in Kurdistan.
The perpetuation of the politico-military domination by the two parties dividing the Kurdish region is also a source of much debate. For thirty years, the KRG’s Western allies have been pushing for the unification of the peshmerga forces into a single, apolitical entity, but both parties have proved reluctant to reform their military over the years. “The idea of unifying their forces makes them fear they will lose power and that their parties will collapse. Both PUK and PDK need their privatized privileges in order to ensure their survival,” noted Jabar Yawar, former secretary of the Peshmerga Ministry. “The process of reunifying the peshmerga forces is very slow; there are many problems in the peshmerga ministry and international advisors often come to draw the KRG’s attention to this issue. They explain that if the [unification] process doesn’t move forward, foreign assistance will dry up,” he adds.
Despite the presence of a small, unified peshmerga force, the loyalty of fighters and their commanders can always swing to one side or another. In addition, many military and security forces operate semi-autonomously and with partisan logics, such as the Defense Forces, the Emergency Forces, the Zerevan Forces and the Security Forces, stresses the former secretary. “Seventy percent of KRG spending goes on security, just like Iraq. It’s probably the most expensive security in the world”, also notes Mr. Sardar Aziz, who adds that of the 400,000 salaries paid by the ministry, many are actually “ghost” salaries paid to corrupt officials. To top it all off, tensions have recently flared within the Peshmerga Ministry itself, where the balance of power between the PUK and the KDP is being called into question by the latter.
The PDK has effectively pushed out a number of PUK cadres from the Ministry, tilting the balance of power in its favour (gaining 53% of the positions in the Ministry), which the PUK has fiercely denounced. According to analyst Mr. Sardar Aziz, it is Prime Minister Masrour Barzani who is pushing for this cabinet reshuffle.
Iraqi Kurdistan therefore faces a number of challenges: reaching an agreement with Baghdad on oil transfers and salary payments, overcoming the legal vacuum created by the Kurdish parliament extending its mandate and thus losing its institutional prerogatives. Other challenges include freeing its military forces from partisan logics and above all, increasing transparency at all levels in order to provide guarantees for KRG citizens that their rulers abide by the rule of law as all governments are supposed to.
Sylvain Mercadier (journalist, founder and managing editor of the French-Iraqi media outlet The Red Line) and Araz Muhamad (journalist)