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Iran Is Exploiting Divisions and U.S. Inaction in Iraqi Kurdistan

2023-09-30 07:36:38

Foreign Policy

In a private letter delivered to the White House earlier this month, the prime minister of the Kurdistan Region of Iraq warned that Kurdistan—and Iraq’s post-2003 federal system—faces imminent collapse unless the United States intervenes. Masrour Barzani sent his extraordinary warning amid mounting political and economic challenges for the autonomous region and an increasingly belligerent government in Baghdad.

The Kurdistan Regional Government (KRG) is important to U.S. interests in several ways. Its Peshmerga forces are key partners in the fight against the Islamic State and other extremist groups and crucial to the West’s counterterrorism efforts in both Iraq and Syria. The region has historically constituted a buffer against tumult and turmoil in the rest of Iraq, providing a safe haven for nearly 1 million internally displaced people and refugees, while also containing the ascension of militant Iran-backed militia groups responsible for conducting numerous attacks on Western forces.

However, with Washington now preoccupied by its intensifying rivalry with China and the war in Ukraine, little attention is being paid to Kurdistan. Sensing America’s focus is elsewhere, the KRG’s rivals, including militia groups designated as terrorists by the United States, have started circling. Kurdistan’s collapse would spell upheaval and chaos with implications stretching well beyond Iraq.

The KRG has endured a string of troubles in recent years. Soon after Barzani took office in 2019, his cabinet was confronted with a pandemic, a military escalation between the United States and Iran and its affiliated militias, and an economic crisis after oil revenues took a huge hit when crude prices plummeted in 2020.

Kurdistan has also been undermined by the rivalry between the two largest political parties, Barzani’s Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK). Their division weakened the Kurds’ bargaining power in Baghdad during negotiations over forming an Iraqi government after the 2021 parliamentary elections. Iran and its allies, including the Popular Mobilization Force (PMF)—the 200,000-strong  umbrella militia organization—exploited Kurdish discord by allying with the PUK to expand their influence over the Iraqi state.

Iran-backed groups have also consolidated their control over the Iraqi judiciary, paving the way for a February 2022 ruling that Kurdish oil exports through Turkey were illegal. This influenced an international arbitration decision a year later that came to the same conclusion. Since then, Kurdish oil exports have stopped, crippling the region’s economy and impacting global energy markets—a win for the PMF and its hopes of neutering Kurdistan’s economic independence.

Earlier this month, Iran-aligned groups massacred Kurdish protesters in the disputed oil-rich city of Kirkuk, which Kurdish forces had withdrawn from in 2017 after the PMF mobilized its militias with federal government backing. As part of an agreement between Iraqi Prime Minister Mohammed Shia al-Sudani and Barzani, the KDP was to return to a base in the city, but the PMF moved to torpedo this by blocking a highway connecting Kirkuk to Erbil and other Kurdish provinces in August. The disruption to the lives of people who rely on the highway daily prompted the protests. Following the massacre, the Federal Supreme Court in Baghdad, which is aligned with the PMF, suspended the order for the KDP’s return.

The divisions between the KDP and PUK have deeply undermined the KRG. Indeed, fraternal rivalry has been the Kurds’ Achilles’ heel for decades. Between 1994 and 1998, the two parties fought a civil war for control of the region, which was finally resolved through U.S. mediation. Their 1998 peace settlement paved the way for a strategic agreement that became the basis for Kurdistan’s golden era after the U.S.-led invasion of Iraq in 2003, which gifted the Kurds outsized influence over the Iraqi state, expanded their autonomy, and precipitated an unprecedented economic boom.

While today’s rivalry represents a clash of personalities within a new generation of Kurdish leaders, it also reflects the two parties’ respective trajectories since 2003. The KDP owes much of its power to its long-standing organizational discipline, which has delivered it electoral success and allowed it to control the prime minister’s office since 2012. The PUK, on the other hand, has been factionalized almost since its inception in the 1970s. In 2021, Bafel Talabani launched a coup to oust his cousin Lahur as co-chair of the party and head of its counterterrorism and intelligence forces.

These violent dynamics have degraded the PUK’s ability to present a serious alternative to the KDP. Instead, it has opted for spoiler tactics, working with Iran-aligned groups in Baghdad to undermine its rival politically and economically. The PUK leadership regularly courts Iran-aligned individuals and factions sanctioned by the U.S. Treasury Department, sometimes against the backdrop of missile and drone attacks on Kurdistan by these groups.

This raises serious questions for Washington and its relationship with the party, but also for the PUK itself. Looking to Iran and Baghdad may help the PUK reassert itself locally, but undermining Kurdistan as a whole to weaken the KDP is dangerously myopic since it relies on the good faith of the PMF, and it is potentially existential as it risks gambling the autonomy of Kurdistan in the long term.

Kurdish woes and Iranian encroachment into Kurdistan have far-reaching implications for U.S. interests. The KRG is a vital ally in the campaign to secure the enduring defeat of the Islamic State. Intra-Kurdish divisions, Iran’s attempts to subjugate the Iraqi state, and Kurdistan’s economic turmoil all undermine the U.S. campaign against the Islamic State and empower Iranian-backed militant groups designated by Washington as terrorists. The U.S. base in Erbil province is one of Washington’s most important military bases and listening posts in the Middle East, serving as a special operations hub and a staging site for operations in both Iraq and Syria.

The very presence of this base requires a political order that is conducive to maintaining the U.S.-KRG partnership, something Iran is hoping to weaken and, eventually, demolish by instrumentalizing the PUK. Iran has proved willing to play the long game to supplant the United States in Kurdistan, as it has done in Baghdad over the past two decades.

Washington must, therefore, step in to pressure the PUK into ending its collusion with Tehran. The PUK and its leadership risk breaching U.S. sanctions that are designed to inhibit the capabilities of the designated Iran-aligned groups and officials the PUK partners with.

These sanctions could underscore an effort by Washington to establish red lines for the PUK, both to contain Iran’s encroachment and to protect the credibility of its sanctions infrastructure. Washington must also discourage the PUK from threatening to return Kurdistan to the dual administrative structure of the 1990s, which would effectively dissolve the autonomy of Kurdistan and its hard-won rights under the 2005 Iraqi constitution. This system saw the two ruling parties govern their stronghold provinces as two separate administrations and empowered Iraq’s neighbors, while undermining U.S. strategic interests in Iraq and the region.

Regional actors such as Turkey can also be brought into play. Ankara has escalated its drone attacks on the fighters and affiliates of the Turkish-Kurdish rebel group, the Kurdistan Workers’ Party (PKK), who have found refuge in Sulaymaniyah, the PUK’s stronghold province. That has destabilized the province and added to the party’s woes, despite the PUK’s efforts to discourage further strikes.

The PUK cannot force the PKK to withdraw, since this would trigger a violent conflict, but it can ill afford further Turkish attacks. However, it could strike a bargain with Ankara premised on a commitment to end its collusion with the PMF, which has PKK affiliates within its ranks. This would ensure that the PUK no longer directly or indirectly enables the PKK. It diminishes Iran’s influence, alleviates Turkish apprehensions, and reduces the geopolitical tensions that result from Turkish incursions.

Moreover, Washington has failed to resist or condemn Baghdad’s punitive measures against the KRG’s economy, which have been engineered by Iran-aligned groups through the subjugation of the judiciary in Baghdad. The suspension of Kurdistan’s oil exports has also stopped 500,000 barrels per day of Kurdish oil from reaching global markets: some 10 percent of Iraq’s total exports, or 0.5 percent of global production. This has reverberations well beyond the region; Europe has relied increasingly on Kurdish oil since Russia’s invasion of Ukraine.

The U.S. has so far been a bystander to both the intra-Kurdish escalation and Iran’s encroachment. Washington may believe that these problems are internal Kurdish matters, but this is a mistake. The ascension of the PMF and, therefore, its ability to exploit Kurdish discord can be directly tied to the legacy of U.S. engagement in Iraq over the past two decades, including Washington’s acquiescence to the group’s takeover of Kirkuk in 2017.

The KRG has proved resilient, but this has its limits. A full collapse of the region’s economy would ultimately force it to capitulate to Iran. In practice, this means giving Iran a greater say over the contours of the KRG’s institutions, its armed forces, borders, and, most importantly, the future of the U.S. base in Erbil.

Preventing this would require the United States to mediate intra-Kurdish tensions to unify Kurdish ranks in Baghdad to protect the KRG’s autonomy and restore its budgetary entitlements and its right to electorally contest disputed territories such as Kirkuk without being subjected to the coercive tactics of the PMF—while maintaining a healthy democratic rivalry at home.

If Washington is serious about safeguarding its interests, it could start by convincing the PUK that its best hope of reversing its decline is by addressing its internal crisis, and not by turning to Iran—a self-defeating exercise. The PUK will struggle to match the KDP’s political supremacy: At best, it can hope to slow its rival’s ascension. At worst, its collusion with Iran gambles the fates of both the party and Sulaymaniyah.

Secondly, the U.S. could focus its mediation on Kurdistan’s gas reserves, potentially addressing global shortages in the long term while propping up the KRG’s economy. The KDP has the political and constitutional legitimacy to move the sector forward and attract investors—but gas reserves are located primarily in PUK-controlled areas.

The U.S. could encourage dialogue over developing these gas fields and securing Kurdistan’s position in what the International Energy Agency has described as a “golden age” of natural gas. It is precisely here—at home, and not in Baghdad or Tehran—where the PUK, with U.S. support, can push for its economic stake through a comprehensive arrangement with the KDP that includes a revenue-sharing agreement.

Such a transactional engagement could be a stepping stone toward a wider settlement. The PUK blames the KDP for hoarding revenues and the fact that Sulaymaniyah has lagged behind other provinces, but that argument is weakened when Sulaymaniyah’s degradation is a reflection of the degradation of the PUK.

The correlation is not coincidental. By continuing with its current path, the PUK risks detaching Sulaymaniyah’s 700,000 inhabitants from the economic transformation being led by Barzani, which will only add to the frustration of its supporters. That reform agenda could rescue Kurdistan from dependence on oil by diversifying the economy, improving efficiency, and promoting good governance.

The alternative for the United States—standing by and watching the collapse of the KRG—would be a disaster for Iraq’s Kurds and for U.S. interests in the region. The KRG’s fate will play an important role in determining the contours of the wider Middle East.


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