ERBIL, Kurdistan Region - Before it can mend its relationship with Baghdad, the Kurdistan Region must get its domestic troubles under control, a former United States official advised on Thursday. Functioning of the cash-strapped regional government has been impeded by a feud between its two ruling parties.
Denise Natali, former assistant secretary of state for conflict and stabilization operations under the Donald Trump administration, told Rudaw’s Alla Shally that it is important for the Kurdistan Region to acknowledge the differences along party lines within the Region, and to manage them effectively, “potentially by decentralizing further and dealing with the Iraqi government on an issue by issue basis.”
The Kurdistan Democratic Party (KDP) and Patriotic Union of Kurdistan (PUK) are long-time rivals. They are the dominant parties in the Kurdistan Region and their relationship is regulated by a tenuous power-sharing agreement. Tensions between them have been high for more than a year over a variety of issues, including distribution of funds to provinces and the transparency of revenue in their areas of control.
This week, they held a high-level meeting in Erbil’s Pirmam during which they discussed the need for cooperation to resolve pressing issues, such as that of financing civil servants’ salaries, which went unpaid for around 90 days before a deal was struck between Baghdad and Erbil in mid-September.
Through that deal, the federal government agreed to lend the Kurdistan Regional Government (KRG) 2.1 trillion Iraqi dinars to pay civil servants’ salaries for three months, however those for September and October have yet to be paid.
Other pressing issues between Erbil and Baghdad are the fate of the Kurdistan Region’s share in the federal budget, and the resumption of Kurdish oil exports. The Region has relied on irregular payments from the Iraqi government to pay its civil servants since an arbitration case between Baghdad and Ankara in March halted the flow of the Kurdish oil to international markets.
Natali, who is also Director of the US National Institute for Strategic Studies, stressed that the most important issues for the Region to prioritize include paying back loans, and coming to an agreement about its oil sales in order to ensure that salaries are paid consistently and a way forward is identified.
“Before you can devise a correct solution between the Kurdistan Region and Baghdad, it would also be helpful and I would advise if the Kurdistan Region could get its house in order,” said Natali.
Erbil and Baghdad signed an agreement to resume the Region’s oil exports in April, but there is still no oil flowing through the pipeline to Turkey.
Kurdistan Region President Nechirvan Barzani said last week that the federal government is responsible for the delayed export resumption. “Now Baghdad is really the issue because Turkey has announced that it is ready and willing to accept,” he told reporters in Paris.
Natali noted that while for a long time the US government got directly involved on the issue of the Region’s oil exports by speaking with the prime ministers of both the KRG and Iraq, which would result in short-term agreements, these types of interventions “are unlikely to occur right now for different reasons, different global priorities,” adding that this, however, does not preclude ongoing diplomatic efforts to encourage discussion between Erbil and Baghdad.
“It's time for the Kurdistan Region and Baghdad to work out these differences,” said Natali, voicing hope that all outstanding issues be promptly sorted out, in order to ensure the stability and prosperity of the country.
Natali highlighted that while Iraq has made important progress under Prime Minister Mohammed Shia’ al-Sudani, “there are very important structural issues in Iraq not only after 2003 but before 2003 that continue to challenge the very working foundations of the country,” namely its federalist structure and its dysfunctional nature, which she identified as the basis for many of the country’s problems.
The expert emphasized that Iraq “never really was a proper federalist structure in the first place,” adding that the consequences of this are evident in the relationship between the Kurdistan Regional Government and the federal government, in the weakness of the country’s institutions, and in the “decisions that still can’t be made: oil, disputed territories, the budget,” underlining that these issues the country has been grappling with for decades are all institutionally-driven.
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