Since the American occupation of Iraq began, the Kurdistan Regional Government has enjoyed an unprecedented degree of autonomy. Kurdistan’s economy has benefited from improvements in Iraq’s domestic security situation, and international observers have suggested that this “quasi-state” is more prosperous and independent than ever before. 

But despite the appearance of increasing autonomy, Kurdistan continues to rely heavily on the central Iraqi government and international support. This dependency has curtailed Kurdistan’s separatist aspirations that have historically driven its negotiations with Baghdad.  Denise Natali, the Research Centers Director at the American University of Iraq-Sulaimaniya and author of The Kurdish Quasi-State and Carnegie’s Henri J. Barkey discussed the current challenges facing Kurdistan as it struggles to maintain political leverage in the context of a fragmented Iraqi government. Carnegie’s Marina Ottaway moderated the discussion.

Challenging the Myth of a “Booming” Kurdistan

In 2007, Kurdistan’s two major parties, the Patriotic Union of Kurdistan (PUK) and the Kurdistan Democratic Party (KDP), decided to form a unified Kurdistan Regional Government (KRG). This union simplified the regional decision-making process and paved the way for rapid economic development.

Despite visible indicators of growth—such as the flurry of recent construction and infrastructure projects—Kurdistan is not as self-sufficient as some observers claim. Natali explained how Kurdistan’s political and economic autonomy is fundamentally constrained by its dependence on Baghdad.

  • A historical pattern of dependency: Kurdistan’s dependence on external actors is not a new phenomenon; Barkey noted that Kurds in the past and the Kurdish the quasi-state have repeatedly made deals with international players to advance their own security interests. Following the first Gulf war and the creation of a safe haven in northern Iraq, Kurdistan became an object of external patronage as foreign donors funneled aid into the war-torn region. Still, the same international sanctions imposed on Iraq were imposed on Kurdistan in order to downplay regional divisions. During this period, foreign aid was deliberately limited to food and fuel handouts, in the hopes of dampening Kurdish separatist aspirations.

  • Increasing autonomy: Kurdish autonomy was considerably enhanced by the ratification of a new Iraqi constitution in 2005, explained Natali. The document provided a legal basis for Kurdish claims to political rights, national revenues, and recognition as a semi-autonomous region. At this time, Kurdistan enjoyed unprecedented legitimacy in the international community. Whereas foreign donors had previously limited their contributions to NGOs, they began funneling direct aid to the Kurdish government itself.

  • Shifting dependency: Despite gains in autonomy, Kurdistan continues to depend on external patronage—although the source of that patronage has shifted over time. Kurdistan today relies on Baghdad for as much as 95 percent of its budget. Natali argued that the apparent increase in Kurdish autonomy is largely illusory; the quasi-state’s recent economic windfalls would evaporate without Baghdad’s heavy patronage.

  • Economic activity: Nevertheless, the Kurdistan Regional Government (KRG) has sought to diversify its economic base by engaging foreign energy companies to prospect in its territory. Disputes with Baghdad over the hydrocarbon law have hampered the activities of these companies.

Maintaining Kurdistan’s Foothold in a Fragmented National Government

The Kurds were once considered “kingmakers” in Iraq, and following the elections of December 2005 they played a key role in consolidating Iraq’s diverse national factions into a unified government. However, Natali explained that the results of the March 2010 parliamentary elections—in which Kurds lost one of their 58 seats while the total number of seats increased from 275 to 325—reveal a clear decline in Kurdish influence.

  • The challenge of a fragmented government: The Iraqi parliament’s failure to form a coalition government since the 2010 election has hindered the Kurdish coalition’s ability to promote its interests in Baghdad. Natali argued that the fragmented state of Iraq’s national government has increased the political vulnerability of the Kurdish coalition, which will be unable to leverage its bargaining power until a new parliament is seated.

  • Seeking to preserve influence: In an effort to maintain a political foothold, the Kurdish coalition presented a list of nineteen conditions as prerequisites for its participation in a future governing coalition. Natali interpreted these conditions—including the preservation of a federal system and a constitutional provision aimed at resolving territorial disputes—as an expression of the Kurdish coalition’s own insecurities and its desire to reverse the erosion of its political influence in Baghdad.

  • Beyond parliament: Although the Kurds have suffered a setback in their numerical representation in parliament, they continue to derive some political power from Iraq’s institutional and legal framework. Under Iraq’s power-sharing arrangement, the Kurdish leader Jalal Talabani serves as president of the country. Barkey contended that Talabani enjoys greater legitimacy in the international community than either former Prime Minister Ayyad Allawi or current Prime Minister Nouri al-Maliki. Through their command of key, symbolic posts, “the Kurds punch above their weight,” Barkey said.

Uncertain Future

Because of its continuing dependence on external recognition and aid, Kurdistan’s future trajectory is pegged to the fates of its various benefactors. Kurdistan’s survival as a semi-autonomous entity will hinge on its ability to gain acceptance from the rest of Iraq’s population and sustain a stable political relationship with Baghdad while maximizing its concessions from the central government. “The Kurdistan Regional Government is a process,” Barkey said. “We do not know how it will turn out.”