Iraqi prime minister Nouri al-Maliki’s scheduled visit to the White House tomorrow has brought Iraq and its relations with the United States into the limelight. Much of the attention has focused on mounting Sunni resentment towards Iraq’s Shiite-led government, the spillover from the Syrian civil war across the border and the surge of attacks perpetrated by the al-Qaeda-affiliated Islamic State of Iraq and Syria (ISIS). Analysts have rightly pointed out the need for reinvigorated US efforts to persuade Maliki to reverse his long-standing exclusion of the country’s Sunni minority and concentration of power in his own hands. However, the ongoing policy debate overlooks the opportunities associated with recent developments in Iraq’s Kurdistan region. These opportunities are real and the Obama administration should capitalize on them.
Revenues from all of Iraq’s oil exports accrue to the federal budget and are then distributed to governorates in proportion to their population, with the exception of the Kurdistan Regional Government’s (KRG) flat 17 percent share. Since 2007, negotiations between the KRG and Baghdad on a package of laws governing the country’s hydrocarbon sector have stalled, reflecting fundamental disagreements over the appropriate level of decentralization and historical mistrust between the two. Rather than waiting indefinitely for the gulf between their positions to be bridged, the KRG passed its own hydrocarbon framework law and proceeded to sign contracts with international oil companies for the development of the region’s energy sector. Due to both logistical factors and the central government’s staunch opposition to its initiatives, Erbil could not rely on Baghdad-controlled infrastructure to bring oil from landlocked Kurdistan to international markets. It is in this context that Turkey comes into the picture. Turkey-KRG relations have undergone a dramatic improvement over the past few years, from the low point of a major Turkish ground offensive in KRG territory against the PKK in 2008 to the height of a strategic energy deal this year. As part of this agreement, a Turkish parastatal company would acquire stakes in several exploration blocks in Iraqi Kurdistan and gas and oil pipelines would be built to bring hydrocarbons under KRG’s control to Turkey and international markets. (The oil pipeline is expected to become operational by the end of the year, while it will likely take a few years for the KRG to start gas exports.)
Baghdad has vehemently opposed the Turkey-KRG rapprochement, fearing that it would increase the Kurds’ leverage in Iraq’s domestic politics and could represent a springboard for Kurdish independence down the road. While the United States initially encouraged warmer relations between Ankara and Erbil, it has campaigned against their new energy partnership lest it intensify ethnic tensions and further destabilize Iraq . As the joke in Turkish diplomatic circles goes, “the United States wanted Turkey and Iraq’s Kurds to become friends, not to get married.”
There are two important reasons why the US opposition to the KRG-Turkey deal is misguided. First, the energy partnership promises to unlock Kurdistan’s hydrocarbon wealth, with significant economic benefits extending to Turkey and the rest of Iraq. The new pipelines would guarantee an outlet to international markets for KRG-controlled oil and gas. This development would assuage energy companies’ fears of being unable to monetize their past investments, thus prompting new investments and further growth of the KRG’s energy sector.
Second, the deal would soothe Iraqi Kurds’ deep-seated fears of victimization and exploitation and thus increase their willingness to remain part of Iraq, as the pipelines would operate as an insurance policy by providing a lifeline for the KRG beyond Baghdad’s reach. One could object that the existence of new pipelines could enhance the risk of Kurdish secession by increasing its feasibility. However, this is unconvincing, as Iraqi Kurdish politicians have clearly stated that all hydrocarbon revenues would continue accruing to the federal budget and independence is not their goal as long as credible guarantees for revenue sharing are in place. Moreover, regardless of Kurdish preferences, it is extremely likely that Turkey would adamantly oppose the creation of a Kurdish state. In fact, Ankara’s policy towards Erbil is driven by a mix of economic and energy-security considerations and is tightly constrained by Turkish nationalists’ fears of “Greater Kurdistan.”
Finally, the objection that Baghdad may decide to resort to force in response to the Ankara-Erbil energy partnership is also unconvincing. Its forces are stretched thin fighting a reinvigorated Sunni insurgency and thus Baghdad would be particularly reluctant to open a second front. The United States could further reduce the short-run risk of violence by clearly communicating to Baghdad that an attack on the country’s Kurds would not be tolerated and by withholding the transfer of military equipment that could be used in a conventional offensive against Kurdistan while propping up Iraqi forces’ counterinsurgency capabilities to deal with ISIS. In the long run, the benefit of larger revenues for Iraq’s federal government deriving from the Turkey-KRG deal should operate as a deterrent for the use of force. The Turkey-KRG “marriage” was not part of the plan but, as often is the case with marriages of convenience, it is certainly worth saving.