Erbil in search of a balance

A guest post by Kevin Matthees 1

According to UN figures the unfolding sectarian conflict in Iraq has reached a new low with over 1,000 casualties in May 2013.  The sharp increase of violence fuels anxieties that the country could be pushed back into widespread sectarian conflict; a conflict which between 2006 and 2008 resulted in the deaths of 10,000 Iraqis and over 4 million displaced. Within all this turmoil, however, the autonomous Kurdistan region in northern Iraq is blossoming.

The Arab Council on Tourisms’ decision to appoint Erbil as the tourism capital demonstrates that all the construction and investing in the Kurdish region could pay off. While the Kurdish region is experiencing political stability and economic growth the Kurdish Regional Government (KRG) finds itself in a constant struggle with the federal government in Baghdad over policy making capacities. The most prominent example being whether or not the KRG has the authority to seal deals with foreign energy companies.

Political gridlock between Erbil and Baghdad, and the fact that Iraq stands on the threshold to sectarian mayhem once again, leads to speculation whether northern Iraq would be better off by itself. With its own military forces (peshmerga), diplomatic representations abroad, a stable political government, and an increasing economy, northern Iraq seems to be ready to depart from Baghdad and establish an independent Kurdish state.

Turkey is interested in cooperating with the KRG

The voting on Iraq’s 2013 budget demonstrates how Maliki’s policies could further alienate Iraq’s Kurds. With Kurdish party members of parliament sidelined, the Iraqi government passed the most anti-Kurdish budget of post-Saddam Iraq in March 2013.  Putting economic pressure on Erbil however, could drive the KRG right into the hands of Turkey. In recent years Turkey has soared to become the KRG’s most important trade partner and foreign investor, and Turkish companies represent over 50 percent of the 2,250 foreign companies operating in northern Iraq.

Cooperation with the KRG is interesting to Turkey in many respects: on the one hand the Kurdish region presents an increasing market for Turkish goods and construction companies; on the other hand oil and gas resources in northern Iraq are important to fill Turkeys growing energy needs. Nevertheless, strengthening Turkish-Kurdish cooperation, particularly in the area of energy, increases friction between Erbil and Baghdad as well as Ankara and Baghdad.

A win-win-win-situation between Ankara, Erbil & Baghdad?

The close relationship between Ankara and Erbil is not only drawing criticism from Baghdad, but local Kurds also express reservations on the increasing “Turkification” of the Kurdistan region. Due to the KRG’s overreliance on oil as a revenue source (approximately 95% of its budget), it may find itself increasingly vulnerable to Ankara’s political will. In the absence of alternative energy transit routes, Turkey is the only option to transport Kurdish hydrocarbons to the European markets.

Denise Natali encapsulates the Kurdish dilemma, stating that “instead of increasing Kurdish autonomy by circumventing Baghdad with ‘independent oil exports,’ the Kurdistan region could effectively become less autonomous as an economic vassal state of Turkey”.  Therefore, Erbil needs to find the right balance between Baghdad and Ankara to sustain its limbo of autonomy.

Iraq’s integrity is also very much in the interest of Turkey as the vast majority of hydrocarbons are located in southern Iraq. An energy framework could lead to a win-win-win situation between Ankara, Erbil, and Baghdad – however, chances are slim that this can be achieved while Baghdad is facing increasing sectarian turmoil and Ankara and Baghdad are at odds regarding Syria.

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  1. Kevin Matthees has studied political science in Regensburg (Germany) and Washington, DC. He covers mainly Middle East politics, specifically Iran and Turkey. His undergraduate studies culminated in a bachelor thesis titled: “Turkey’s Foreign Policy Shift toward the Middle East in the Post-Cold War Era.” His most recent paper Erdoğan and Öcalan Begin Talks was published by the Berlin-based German Institute for International and Security Affairs (SWP).